California Insurance Commissioner Ricardo Lara on Wednesday issued a formal notice to insurance companies reminding them of their legal duty to cover damage from any future mudslide or similar disaster that is caused by recent wildfires that weakened hillsides, as powerful winter storms continue to increase the threat of mudslides in wildfire burn areas.
Homeowners’ and commercial insurance policies typically exclude flood, mudslide, debris flow, and other similar disasters unless they are directly or indirectly caused by a recent wildfire or another peril covered by the applicable insurance policy.
“With continued winter storms threatening areas already damaged by wildfires, it’s critical to know how you are protected especially if you are living in a more vulnerable area,” Lara said in a statement. “I am alerting insurance companies to follow California law requiring they cover any mudslide, debris flow, or other damage that is caused by our recent wildfires so that people can recover quickly.”
The Montecito mudslide in Santa Barbara County in January 2018 that followed the destructive Thomas Fire claimed 23 lives and caused more than $421 million in damage, according to California Department of Insurance data. Following that disaster, then-Governor Edmund G. Brown Jr. enacted a new law to help prevent confusion about coverage following mudslides.
Due to the scale of previous wildfires across the state and the current and potential flooding, CDI preemptively issued Wednesday’s notice to all property/casualty insurance companies to ensure consumers are protected.
Commissioner Lara also urged consumers to take the following steps to prepare for the winter storm season:
- Use their smartphone to perform a home inventory and store scans of important documents.
- Locate insurance papers and put in a safe place or upload online.
- For renters, consider purchasing renters’ insurance to protect their personal belongings, which typically are not covered by their landlord’s homeowners’ policy.
- Consider comprehensive auto insurance, which would protect a vehicle in the event of flood damage.
- Consider flood insurance. The National Flood Insurance Program currently provides the majority of flood coverage written in the state, but private flood insurance is also available.
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