A bill sponsored by California Insurance Commissioner Ricardo Lara and state Senator Ben Allen is trying to force insurers in the state to pay homeowners 100 percent coverage for belongings inside destroyed homes without an itemized list.

The legislation, if passed, would apply only to those whose homes were destroyed in natural disasters like wildfires.

Newsweek contacted the California Department of Insurance (CDI) and Allen for comment by email on Tuesday morning.

Why It Matters

The wildfires that ravaged Los Angeles County last month are estimated to have destroyed as many as 12,000 homes as they turned entire neighborhoods into ashes.

The bill, dubbed the Eliminate “The List” Act, requires insurance companies to pay policyholders whose homes have been destroyed by wildfires 100 percent of their contents coverage without needing a detailed inventory list. At the moment, insurers operating in the state have to pay out 30 percent of a policy’s dwelling limit without needing to list every lost object when a policyholder faces a total loss in an area where an emergency declaration has been made.

It also gives wildfire survivors additional time—at least 180 days—to provide proof of loss to their insurer following a declared state of emergency, and aims to establish specific data collection authority to assist the CDI in understanding long-term trends in risk management tools and other factors affecting insurance availability.

What To Know

Allen’s proposed legislation is among 10 bills Lara is sponsoring in an effort to strengthen the California home insurance market, including a program for home hardening, protections for businesses and nonprofits against policy non-renewals, measures to maximize claim payouts by limiting fees that public adjusters can charge and combat deceptive disaster advertising.

“As we face increasingly catastrophic disasters, our responsibility is to assist people in their recovery while also ensuring we are better prepared for the next event,” Lara said in a statement shared by the CDI. “Now is the time for transformational action.”

Allen represents District 24, which includes Pacific Palisades. The area was particularly devastated by the Palisades fire, which erupted on January 7 and quickly spread through the area, fueled by strong winds. A majority of the buildings affected were residential properties.

Seattle-based consulting firm Milliman recently estimated the total insured losses from the two largest fires alone—Palisades and Eaton—to be between $25.2 billion and $39.4 billion. The average estimated cost to repair the damage or replace destroyed homes, the company said, is $758,000 for the Palisades fire and $468,000 for the Eaton fire. Reinsurance News previously reported that the average insured loss per structure could be even higher, at $1.9 million.

For survivors of the Los Angeles fires, insurers’ payouts can make the difference between being able to rebuild life as they used to know it or being forced to sell the land and move on. For insurers, however, such enormous claims mean billions in losses which they may not be able to recover unless they significantly increase premiums—something that California regulators would have to approve.

Newsweek contacted State Farm, the state’s largest property insurer, and the Insurance Information Institute (Triple-I) for comment by email on Tuesday morning.

What People Are Saying

State Senator Ben Allen, in a statement shared by the CDI: “Wildfire victims have been through so much, and deserve all the support we can offer. Guaranteeing coverage of their possessions offers an important step towards closure, and extending deadlines to provide proof of loss allows them ample time to sufficiently regroup and sort through the many logistics of recovery.

“Californians who have lost all that they call home should not be subject to the pain compounded by insufficient coverage or missed deadlines. Additionally, the Eliminate ‘The List’ Act modernizes our data collection protocols to provide us with better climate insight that will guide us to a more insurable future.”

California Insurance Commissioner Ricardo Lara told the New York Times that forcing homeowners who have lost everything to list the objects destroyed in fires is “inhumane.”

What Happens Next

If passed, Allen’s bill would make California the only state in the country requiring such payouts from insurers without itemization, the New York Times reported.