California Fire Victims Urge State to Hold Insurers Accountable

Branislav Kecman was one of roughly 50,000 Californians who lost their homeowners insurance coverage in the months before the fires that swept through the Los Angeles area in January, dropped by State Farm because his house was too high a risk. His home in the community of Altadena was destroyed in the blaze, and he was left facing a series of hard financial choices.

With only the coverage offered by the state’s last-resort insurance plan, Mr. Kecman estimates that he will receive about $1 million, only enough to build a house about a third smaller than the one he lost. The cost to insure the new structure is likely to be much higher, too, now that carriers are asking for rate increases to offset rising wildfire risks.

Mr. Kecman is among the thousands of Californians affected by the fires who say a broken insurance market is hampering their ability to rebuild their lives. On Thursday, many of them gathered in Altadena to urge Gov. Gavin Newsom to install a new insurance commissioner, require insurers to pay outstanding claims and ensure that consumers are protected as companies raise premiums.

“We thought we could trust the system,” Mr. Kecman, a 64-year-old electrical engineer, said at a news conference organized by the Eaton Fire Survivors Network.

Mr. Kecman said he had found it encouraging that Ricardo Lara, the state insurance commissioner, had drafted new regulations not long before the fires that would require carriers to write policies in risky parts of the state in exchange for higher rates. But he and others cited a New York Times story from last week that revealed how a series of loopholes could allow insurers to qualify to charge the higher rates merely by writing new policies in the areas where they had recently dumped customers like him.

The investigation found that there were no guarantees that a substantial number of new policies would be written in the state’s high-risk fire areas.

“I understand that agencies don’t always live up to the idea that they serve the best interests of the people,” Mr. Kecman said in an interview. “But I felt gut-punched when I found out.”

After the Times story was published, Mr. Lara said that his department knew that insurance companies and others would try to find and exploit loopholes. “This is not a surprise to anyone that has dealt with them,” Mr. Lara said in a statement. “If it is, welcome to Earth. All eyes are on insurance companies, including mine and The New York Times.”

“Commissioner Lara has moved quickly and decisively to respond to the fires, including using every tool available to ensure wildfire survivors receive all the benefits they are entitled to under current law,” Mr. Soller said.

He added that the department had told insurers to fully investigate and pay legitimate smoke damage claims and had recovered more than $135 million for wildfire survivors. He said that insurance companies had paid more than $20 billion on more than 41,800 claims, with 92 percent of claims fully paid or underway.

Mr. Newsom’s office did not respond to a request for comment.

Joy Chen, the head of the Eaton Fire Survivors Network, said on Thursday that homeowners wanted Mr. Newsom to enforce consumer protection laws and build a functioning insurance system.

More than eight out of 10 of those whose homes were destroyed by the fires in Altadena and the Pacific Palisades section of Los Angeles are still displaced, and 70 percent of insured Eaton and Palisades survivors have faced delays in receiving insurance payments or denials of coverage, according to data from the Department of Angels, a nonprofit created after the Los Angeles fires to help with the recovery effort.

“Our entire housing market will collapse if families can’t buy or renew insurance, and if those who have it can’t get the benefits they’ve paid for,” Ms. Chen said.

Carmel Kadrnka, a physician from Pacific Palisades who watched Thursday’s event online, said that State Farm had dropped her fire coverage in August 2024, five months before the fire destroyed her home. Like Mr. Kecman, she was put on the FAIR plan, the state’s fire insurer of last resort, and had to buy additional property insurance to cover other liabilities like water damage and vandalism.

Before Ms. Kadrnka was dumped by State Farm, she paid about $20,000 a year in premiums for about $7 million worth of coverage on her home and adjacent structures, personal property and living expenses if she could not live in her house.

After she lost that policy, she paid around $27,000 a year for her FAIR plan fire policy and additional State Farm property insurance, but her coverage was capped at $3 million. Now that she has lost her home, she does not have enough coverage to replace her house and her personal belongings, not to mention renting a temporary home in one of the nation’s most expensive markets.

“No one can tell us whether we’ll even be able to get coverage in the future,” she added. “There’s no information that says, Yes, if you build your home in a certain way, make it fire-hardened, invest in all the recommendations that the insurance companies are making, that they will actually agree to cover your property,” she said. “There are no guarantees. We don’t know how to move forward.”