Insurers Taking Claims from the Los Angeles County Wildfire

Wildfires are burning in California and insurers are taking claims from the dozens of damaged homes and assisting thousands of evacuees from the unpredictable "Station Fire" in Los Angeles County.

"In my 15 years here this is the closest a fire has ever come to L.A.," said Jerry Davies, spokesman for Farmers Insurance. "It is really so widespread and truly wild and not really contained yet. A lot can happen."

Davies said Farmers had received more than 90 claims as of the afternoon on Sept. 2 from the Station, Auburn and Oak Glen fires. The Station Fire has generated 66 claims. He did not know how many of the claims were from homes deemed complete losses. The insurer deployed its mobile claims vehicles, including a mobile home-size vehicle, to the affected areas.

Bob Devereux, spokesman for State Farm, said there hasn't been much property loss to date but the fires still threaten a lot of homes. "Right now we are lucky the Santa Ana winds are not blowing."

The winds, usually present in the fall, typically fuel Southern California wildfires. Still, as of Sept. 2, the Station Fire, which began Aug. 26, had burned more than 127,500 acres and was only 22% contained. Risk modeler AIR Worldwide reported 70 structures destroyed while more than 12,000 homes remained threatened. The median home value in the area impacted by the Station Fire is about $500,000, AIR said.

Devereux said many residents cannot get back to their homes near the Station Fire. About 30 claims have been received. Out of those, two are from homes completely destroyed. Another blaze, the Auburn Fire northeast of Sacramento, struck a more concentrated area of homes starting Aug. 27, Devereux said. Here, State Farm has received 32 claims, of which 10 claims are "totals."

An A.M. Best Co. special report said that, although it was not as severe as the 2007 season, the 2008 wildfire season caused $640 million in direct property loss from three wildfires in the Los Angeles area last November. The report said insurance rates have gone up in California due to fires and more frequent activity could have more of an effect on businesses, who are faced with higher costs for liability coverage (BestWire, July 13, 2009).

The top five writers of homeowners multiperil in California in 2008, according to A.M. Best Co. state/line product information based on direct premiums written, were: State Farm Group, with a 20.3% market share; Farmers Insurance Group, with 17.3%; Allstate Insurance Group, with 11.4%; California State Auto Group, with 6.6%; and Liberty Mutual Insurance Cos., with 5%.