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42% of Fire Survivors Denied ALE; Are You One of Them?

#ShameOnStateFarm  #ShameOnNationwide  #ShameOnAllstate  #ShameonGrangeInsurance  #StateFarm  #Nationwide  #Allstate  #GrangeInsurance

Shame on State Farm, Nationwide, Allstate, Grange, & 6 smaller carriers who cut off access to the ALE insurance coverage their customers paid for.

These 10 insurers together insure 42% (1000+) of policyholders whose homes were destroyed in the 2017 Northern California wildfires.*

2017 fire survivors paved the way for California to mandate that all total loss insureds get access to their ALE (defined below) for at least 36 months after a declared disaster.

But 2017 survivors do not receive that same benefit if they were insured by State Farm, Nationwide, Allstate, Grange, and six others.

We are grateful that our 10,000 + Camp insured fire neighbors will have at least 36 months  access to their ALE, but what about the 1,000+ families of the 2017  Northern California and 2018 Carr fires? (Carr Fire total loss insureds will face the same issue in summer 2020 if insured by State Farm, Nationwide, Allstate, Grange, and six others.)

Companies including Farmers, CSAA/AAA, Liberty Mutual/Safeco, Travelers, USAA and 24 other carriers are doing the right thing by allowing continued access to ALE.

See NBC’s coverage:

State Farm appears to respond to public pressure / press coverage of individual circumstances.  This 2017 fire survivor’s access to her ALE was extended to February 2020 after the Press Democrat contacted State Farm.  or see StateFarmInsuredALEextended 2019 10 25

Is your insurer doing the right thing?

Some insureds do not know that their insurance company has agreed to continue access to ALE.

See the full list from the California Department of Insurance:

See the California Department of Insurance’s press release here:

As of 10/18/19, the press release gives the impression, in my opinion, that all insurance companies agreed to or that a very large majority of the applicable insureds now receive continued access to ALE, but as described above, this is not true.  If the CDI releases an updated document, please let me know.

ALE is Additional Living Expense.  This is part of most homeowner’s insurance policies.  ALE pays for rent while fire survivors are rebuilding.

Burdens on rebuilding fire survivors:

  • All are still paying for insurance on their burned out or in-construction lots
  • Many (most) are also paying their pre-fire mortgages on their destroyed homes
  • Many (most) are also paying current construction loans to pay for rebuilding (most fire survivors in Sonoma County are underinsured).
  • Despite a record-breaking rebuild rate, less than 20% of the 5,000+ destroyed homes have been rebuilt in the 2 years since the October 2017 Sonoma Complex Fires.  The sheer volume slows down and restricts the building process.

(Thousands more homes were destroyed in the entirety of the 2017 Northern California Firestorms.)

The 1,000s of State Farm, Nationwide, Allstate, Grange (and 6 other insurance carriers’) fire survivor insureds are not asking for increased coverage.  They are simply asking to continue to access the ALE coverage they paid for, up to their policy limits.

This lack of customer service is just one more blow from many of these insurance companies.  Their onerous and capricious claims handling (forcing underinsureds to complete a detailed inventory of their TOTAL losses; repeated egregious lowballing of rebuild costs and contents valuation) is often the initial cause of the rebuilding delays which necessitate more than 24 months to rebuild.

Although this post discusses fire survivors who are rebuilding, the ALE issue applies to those who are in the process of buying or renovating a replacement home instead of rebuilding.

nr079ALEResponse10311_9UPDATED.jpgAccording the Press Democrat, the following are the 10 largest insurers in the North Bay, in alphabetical order:

  • Allstate
  • Chubb
  • Farmers
  • Liberty Mutual/Safeco
  • Nationwide
  • State Farm
  • The Hartford
  • Travelers
  • USAA

* The 42% statistic came from the Department of Insurance 10/18/19 when 13 insurance companies did not agree or did not respond.  Since then, 3 more insurers (American Modern, American National Financial Group, Universal North American) moved from the “did not respond” column to the “agreed” column.  Because these three insurers presumably did not have many claimants in these fires, I have not adjusted the approximate percentage of insured 2017 Northern California Fire survivors with total loss insurance claims.  See the 10/18/19 List:  ALEResponse101819

Neighbors Together ~ Strong & Resilient (NTSR) does not provide any advice or endorse any service provider or agency.  

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