California Wildfire Insurance Bad Faith Claims
[Post Updated September 2019] I spent a weekend in October 2017 in the Napa Valley. From Santa Rosa to Calistoga, the only talk was of the fires. Tourism will return, the wine still flows but for thousands of Californians, their lives were permanently altered by the fires.
What can we learn from these deadly fires? How do we prevent them from happening again? Can we hold someone accountable for the lives lost and dreams destroyed? What happens if my insurance company won’t pay my claim? Hopefully we can answer some of these questions in this post.
The Napa fires are primarily about PG&E but global warming, lax line maintenance and dry weather is a recipe for disaster anywhere. Add to it insurance companies reluctant to pay claims and and already horrible disaster becomes worse.
When I originally wrote this post, I wrote the words “How do we prevent these fires from happening again.” And just a year later I found myself adding new content after the 2018 fire season was even worse than the year prior. In 2018, the fires claimed at least 88 more lives and damaged or destroyed tens of thousands of homes and businesses.
The Tragedy Unfolds
During my October 2017 trip, I traveled up in the hills and watched as firefighters continued to knock down the last smoldering hotspots, talked to linemen and met with some folks directly affected by the tragedy.
On Saturday (October 21st) in the hills just outside Santa Rosa and Napa, the smoke was still visible and the smell everywhere. Dozens of firefighters from all over the country continued to knock down stubborn little fires that kept rekindling. First responders were still going door to door sifting through destroyed homes looking for the bodies of the missing.
The death count from that two week fire storm stood at forty two when I first wrote this post but several people hadn’t yet been heard from. Everyone hoped they simply weren’t answering their phones or maybe lost their phones to the flames.
But as the days dragged on, concerned family members and friends called rescuers who had the grim task of sifting through the ruble looking for charred remains. The fires were so hot that dental records are the only method of identifying those who are found.
I met Bob at the V. Sattui Winery in St. Helena. A seemingly happy guy, Bob is the manager of the winery’s wine tasting room. He laughs and jokes with customers but privately, he shared the terror of he and his wife fleeing their home as hurricane force winds pushed the fires rapidly to their home. Within minutes, his home was destroyed.
He, his wife and an elderly tenant that lived in a guest house made it out alive. Several of his neighbors did not. As he relives that vivid memory, the smile quickly fades. Everything that he worked so hard for is gone. The fire spread so swiftly that neither he nor his wife had time to grab photo albums or family heirlooms.
On Sunday morning in Napa I met a couple who appeared to be in their 70’s. They were staying at the Napa Winery Inn. The lobby of the hotel had a sign thanking first responders. But for this couple, they didn’t have much to be thankful for.
Fortunately, they had more time to evacuate and were able to load their aging Suburban with clothes and important papers. But while at the hotel, they learned their home was destroyed. They are still too numb to know what to do or where to go or even how to get help. To look at them is to look at despair and defeat.
On Monday, I spoke with several linemen in Calistoga. They looked like soldiers back from a long battle. Evidently, they have been working round the clock for days trying to restore power and replace hundreds of burned power poles and melted insulators and burned transformers.
One of the linemen remarked that this tragedy was largely preventable. That seems to be the mood of the local populace too. Careless smokers will toss lit cigarettes out windows, homeowners and campers will ignore burn bans and even mother nature can get in the act when lighting strikes dry tinder. But everyone suspects the Napa and Sonoma fires were caused by PG&E.
In the paragraphs below we will first discuss the liability of PG&E and how the fires began. In the days after the fire, homeowners who lost everything are numb and happy to be alive. Two years later as I write this, some folks are still battling with their insurance company. The first tragedy was the preventable fires that cost billions in losses. The second tragedy, discussed later in this post, is the response of California’s insurance industry. Later in the post we discuss what steps you can take to combat California wildfire insurance bad faith – in other words, how to sue your insurance company when they won’t pay for wildfire losses.
2018 Woolsey and Camp Fires – Paradise Lost
Fast forward to 2018 and we are now just starting to sort out the causes of the newest fires. These blazes more deadly than the last. And if PG&E doesn’t immediately do a better job of line maintenance, the next fires could be worse.
The Woolsey and Camp Fires were the two biggest and most destructive but California suffered 7,983 other wildfires that year — and the year wasn’t over when this count was given!
The Woolsey and Camp fires alone destroyed 18,000 structures and killed at least 88 people (dozens remain unaccounted for). An entire town of 26,000 people, many who were retirees, was wiped off the map.
What caused these fires? Cal Fire, insurance company investigators and the courts will likely sort that one out. We note, however, that Cal Fire has determined that 17 of the last 21 major fires in Northern California were caused by faulty lines and equipment belonging to PG&E.
Pacific Gas & Electric has said it will start pre-emptively turning off power in certain wind and dryness conditions but that isn’t a fix. Only proper line maintenance and rigorous inspections will solve the problem.
We can’t control a drought. Selective power disruption speaks to symptoms but not the cause of the fires. The answer is better line maintenance and inspections but that costs money.
Already PG&E is under intense scrutiny for the Camp fire and Southern California Edison for the Woolsey fire. The Guardian reports that both companies told the California Public Utilities Commission that they suffered “equipment issues… in the areas close to where the fires ignited, in the moments before flames began to spread.”
PG&E issued a statement saying,
“Our hearts continue to be with the communities impacted by the Camp Fire. The loss of life and property is staggering. Right now, our primary focus is on supporting the communities and assisting first responders as they work to contain the fire. We are also getting our crews positioned and ready to respond when we get access, so that we can safely restore gas and electricity to our customers.
In a separate statement, the company said, “Nothing is more important than the safety of our customers, employees, contractors and the communities we serve.
The utility has pledged to work with regulators and Cal Fire to determine the cause of the fires. It already on a criminal probation after a jury convicted the utility of causing the deadly San Bruno gas explosion. The company did not appeal the conviction.
Follow the Money!
PG&E says it is doing everything it can to take prevent fires but that is a lie.
The company paid $4.5 billion in dividends to shareholders over the last five years. All of that money that could have gone for better line maintenance.
In January 2019, U.S. District Court Judge William Alsup ripped into lawyers for the utility. He asked how he could possibly ignore the fact that PG&E was “killing more people [and] starting more fires.”
As to the billions in profits the company racked up in recent years, Judge Alsup said, “Some of that money could have been used to trim those trees and cut those trees. It’s not enough to come in here and say, ‘Judge, we’re trying to mitigate it, too.’ That’s just platitudes.”
With another fire season just around the corner, the court said there was no time for more studies. He doesn’t want the utility to be responsible for a single fire in 2019.
That may be asking a lot since the company is now in bankruptcy.
PG&E – Just Checking the Boxes?
There is plenty of criticism and finger pointing now that thousands of homes have been destroyed. (More on that below.) A California Administrative Law Judge expressed concern about PG&E’s safety efforts just two weeks before the fire.
Judge Peter Allen expressed concerns on October 25th when he said, “While in general we are encouraged by PG&E’s responsiveness to the (audit), we continue to have concerns about whether PG&E is truly changing its culture, or is just trying to ‘check the boxes.'” Allen made his comments in the context of PG&E’s safety efforts after the deadly 2010 San Bruno pipeline blast.
History of Major Fires in California
As I write this, the death toll from the two big 2018 fires fires stands at 42. 8,400 homes, businesses and other structures destroyed. 246,000 acres burned. That only 42 people died is a miracle.
California has a long history of wildfires and as urban populations push into the hills and global warming means more droughts, more tragic fires are likely to follow.
The state’s firefighting agency, Cal Fire, investigates every deadly blaze. According to their investigations, electrical lines cause just 8% of fires. The biggest causes are debris burning (14%), and lightning (11%). 23% are never determined.
The four major fires that burned in 2017 in the wine country area of California were the Tubbs, Atlas, Patrick and the Nunns fires. All started within a few minutes of one another. Early investigations are suggesting faulty PG&E electric transmission lines.
Investigators believe the Atlas fire began on Atlas Peak Road just outside Napa. A homeowner reported losing power at 9:30 pm on October 8th. The power came back on but shortly thereafter a deadly fire was bearing down on his home. The homeowners made it out alive but their 98 year old neighbors who lived across the street perished.
The fire may have been caused by wind knocking down wires or a tree falling on a wire.
The Tubbs fire near Calistoga was first reported at 9:45, also on October 8th. Investigators aren’t saying yet what might have sparked that blaze. Fueled by hurricane force winds, the Tubbs fire raced into nearby Santa Rosa and burned entire suburban neighborhoods.
The Nunns fire was reported at 10:00 pm. It would claim the life of an out-of-state fire fighter who rushed to California to aid in the firefighting efforts. Investigators again appear to be focused on downed power lines.
The final major fire, the Patrick fire, was the last of the four to be reported that night. Once again, investigators are focusing on downed power lines.
We checked meteorological records for October 8th. Heavy winds were reported throughout Sonoma and Napa Counties. Some say that local gusts reached hurricane force. The state’s public utility regulators require lines be built to withstand those winds.
Was wind a factor in the beginnings of each of these blazes? We will have to wait for Cal Fire’s final report but we suspect the answer is yes. Everyone agrees that the winds that night caused the fires to spread so rapidly. By the times the winds died down and fire fighters from around the world began pouring in, the fires were simply too big to contain. (We say all over the world as Australia sent a wildfire crew to help California firefighters.)
Even if wind was a factor, PG&E should have insured that their lines could withstand those winds and be clear of brush and tree limbs.
PG&E is no stranger to controversy. The company just got done settling claims related to the 2010 San Bruno gas pipeline failure, a failure that caused a wall of fire “1000 feet tall” in a residential neighborhood.
Eight people died in that tragedy. The company paid $1.6 billion to settle claims with the California Public Utilities Commission. The U.S. Department of Justice indicted the company on criminal charges including obstruction of justice for lying to federal investigators. In January of this year, the company was fined $3 million.
The regulatory and criminal actions are in addition to an estimated 70 lawsuits filed against the company. PG&E was blasted when they tried to blame the dead victims and homeowners who lost their homes.
Two years ago, the Public Utility Commission was deeply critical of PG&E’s line maintenance operations in Sonoma County. Some of the problems included vegetation growing on poles or too close to overhead wires.
One California state senator is already calling for the breakup of the utility if Cal Fire determines it is responsible for the deadly blazes. Quoted in the San Francisco Chronicle, Sen. Jerry Hill (D- San Mateo) said, “If we find that in this particular case — and we don’t know the cause yet — then frankly I don’t think PG&E should do business in California anymore. They’ve crossed the line too many times. They need to be dissolved in some way, split.”
That remark was made after the 2017 fires. Senator Hill may have had his wish granted now that PG&E has filed bankruptcy.
The estimates of the damages from the most recent 2018 fires are difficult to estimate. Insurance companies can rebuild houses but a home is much more than four walls and a roof. It is dreams, memories, cherished photos… And valuing the 42 people who lost their lives? No one can estimate that.
After the 2017 fires PG&E is promised to spend $450 million to trim vegetation. It is needed and appreciated but too late. And can they really do a good job of making sure the vegetation is off the lines?
Pacific Gas & Electric relies on their own crews and contractors to trim vegetation. The company, however, is responsible for inspecting the lines and making sure they are safe. With tens of thousands of miles of line and 4.2 million poles, the company has just 18 people to handle those inspections. That alone is negligence in our opinion.
The mere fact that even more lives were lost and more homes destroyed in 2018 shows that PG&E’s promises were empty.
So what did the company say? In 2017, then PG&E CEO Geisha Williams tried to say all the right things. The company’s website said, “We have been part of these communities for more than 100 years. These people are our friends and neighbors, and we are devastated by what they are going through. We will work shoulder to shoulder with them to restore and rebuild what’s been lost, for as long as it takes.”
Did the company really do everything it could? In our opinion, no. Actions speak louder than words. And the 2018 fires are proof.
What did PG&E offer its customers who lost their homes in 2017? According to the company’s website, “If your home was [d]estroyed in the wildfires, you will be billed only through October 7, 2017, the day before wildfires started.”
That statement shows a callousness that even we find hard to believe. If this is the response of the company, we fully expect that they will again be accused of lying to investigators and will again try to blame home owners for dying in what should be the safety of their own homes.
Speaking of actions speaking louder than words, just two days before 2017 fires began, PG&E opposed new safety measures to prevent future fires. Media company Quartz says, “According to a PG&E statement in July, parts of the [safety] initiative would ‘add unnecessary costs to construction and maintenance projects in rural areas.’ Now, after years of opposing the new safety rules, PG&E’s lines are prime suspects in this month’s wildfires.”
PG&E – A “Threat to Public Safety”
In the aftermath of the 2018 fires, dozens of lawsuits have been filed. Of particular note is an interesting one filed in Butte County Superior Court.
That lawsuit accuses PG&E of spending $50 million on advertising to improve its public image instead of maintaining its equipment and reducing the danger of future fires.
The lawsuit labels PG&E as “threat to public safety” and seeks to halt the false advertising that claims to place “the safety of its customers
and operations first.”
Although the lawsuit doesn’t do anything for the tens of thousands of people suffering in the aftermath of the fire, it should shine a light on PG&E’s distorted thought process and broken corporate culture.
2019 Update. It’s a new year and PG&E just announced that their CEO, Geisha Williams announced she was stepping down. She made $8.6 million last year and unknown more in stock options and other perks. The company’s senior vice president for electric operations also stepped down. Two more senior executives suddenly decided to retire.
Those moves will help the optics but will they lead to change? It may not even matter.
The California Public Utilities Commission is considering breaking up the utility.
Why? The Wall Street Journal reported that the company “sparked” 1500 fires, more than one a day in recent years. And its liabilities now are three times its market value.
What does that mean for Californians? Either rate payers will pay the difference meaning the price of electricity will surge so hight that many people won’t be able to afford to have electricity or the people who lost everything will get pennies on the dollar. Neither option is very palatable.
While the State of California and the courts figure out how to clean up this mess, we continue to look for whistleblowers. And not just in California.
As we supplement this post yet again, new headlines today are suggesting that PG&E may now seek bankruptcy protection. That could slow down new safety efforts even more meaning even worse fires next year. California can’t afford it and her citizens deserve better.
Our mission is simple, clean up these companies before tens of thousands of homes are lost, dozens of lives lost and families thrown into upheaval. Keep reading to see what you can do.
It’s Not Just PG&E, Other Utilities Also at Fault
Google “utility companies that cause fires” and Pacific Gas & Electric certainly dominates the news. They are not alone, however.
Two minutes before the massive Woolsey fire (2018) began, Southern California Edison notified the state that a relay on one of their high voltage lines had tripped. It is probably no coincidence that Cal Fire says the location of that relay was the same location as the origin of the fire.
And the problem isn’t confined to California. A study by Texas A&M University in 2014 found that utility lines caused 4000 fires in 3 and one half year period!
What does all this mean? It means that California utilities are all responsible for fires that cause the loss of lives, homes and dreams. And speaking of lost dreams, the state’s insurance industry isn’t any better than PG&E and the other utilities.
“Can I Sue My Insurance Company”? California Wildfire Insurance Bad Faith Claims
In the wake of the 2017 wildfires, the California Department of Insurance estimated insurers paid out $11.8 billion in claims. A year after the 2018 wildfires, last year’s figures still aren’t in but are expected to be much higher.
That’s how much the insurance companies paid but many business and homeowners were shortchanged or worse.
Not only have insurance companies refused to pay legitimate claims, they have tripled their premiums this year and in many instances simply refused to renew policies.
Western Home Insurance Company Denies Wildfire Claim
Patrick and Elsa Major owned a modest home in El Cajon, California. It was destroyed in the 2003 Cedar Fire. After months of delays, the Majors got tired of being jerked around. They made a California wildfire insurance bad faith claim against their carrier, Western Home Insurance Company. Not only did they sue for the delays in paying their claim, they also sued because the company “knowingly insured their home for less than the cost of replacement.” After 3 years of waiting, a jury awarded them $31,359 in personal property benefits, $450,000 in emotional distress damages, $189,000 in attorneys’ fees and $646,471 in punitive damages.
Of course, Western Home appealed but after two more years the California Court of Appeals upheld the award.
Soot and Ash Aren’t Fire Damage?
A popular scam is for insurance companies to use “sublimits” to back out of paying a claim. Let’s say you have a $2 million home with full fire damage coverage. Your home isn’t burned to the ground but it is singed and the interior is covered with a fine film of ash, the outside with soot and the home smells like smoke. All of this should be covered since it occurred during a wildfire, right?
A couple who’s home was damaged in the 2017 Thomas Fire thought they were adequately insured. They had Farmers Insurance, the folks that advertise “We’ve probably seen it and covered it.” Well they didn’t exactly cover the losses in this case. They instead argued that they were only responsible for a measly $5,000, the sublimit for smoke, ash and soot. They also tried to explain that the damage to the exterior of the house was inexplicably linked to “wear and tear.”
The had to sue in order to get coverage.
Time and time again, insurance companies create loopholes and excuses to avoid paying claims. They are more interested in protecting their profits instead of their customers. In fact, just because your house burned doesn’t mean you won’t get burned twice, the second time by the insurance company.
That leaves families and business owners whose lives have already been devastated having to face the stress and uncertainty of trying to rebuild without any money or even knowing if they will get money.
California Unfair Claims Settlement Practices Act
It doesn’t have to be this way. California has enacted California’s Unfair Claims Settlement Practices Act (“UCPA”) [Ins. Code §§790 et seq.] This law prohibits insurance companies from engaging in a number of insurance bad faith acts including:
- Misrepresenting the policy provisions (Insurance carriers must communicate all benefits that apply)
- Failing to act promptly with claims (Carriers have 15 days to respond to all inquiries. Cal. Code of Regs. §2695)
- Failing to promptly investigate and process claims
- Failing to promptly affirm or deny coverage of claims
- Failing to settle claims fairly and promptly
- “Lowballing” Offer to settle for less than what the insurance company feels is legally owed
- Failing to provide the insured with how any settlement offer was calculated by the carrier
- Altering policies without proper notice and consent
- Demanding duplicate documentation or requiring unreasonable documentation
- Failing to provide an explanation for the denial of a claim
- Discouraging the insured from hiring a lawyer
- Misleading the insured about the time limits to sue (statute of limitations)
California has some of the highest insurance rates in the country. The same is true for housing costs. Californians pay billions of dollars each year in insurance premiums. You have the right to expect your insurance company will be there in your hour of need.
While it may be true that insurance companies have paid billions of dollars in recent years, they also stand to collect billions back from PG&E and the other utilities responsible for these fires. They may lose money in the year they pay the claims. But do you think they will lower premiums or send back rebate checks in future years when they collect back much of that money?
If you are the victim of a California wildfire insurance bad faith claim, give us a call. We represent business owners (homeowners too) all over the United States when insurance companies refuse to pay. We are ready to fight big insurance companies anywhere in the nation.
Our goal is simple. Make sure you are treated fairly and maximize your recovery. We want you to get every cent you are owed.
DOn’t have insurance coverage? We may be able to help as well. Sadly we see cases where people are woefully underinsured. In many instances we can make a bad faith claim if we can show the carrier undervalued your property. If we can’t, we may be able to go after the utilities responsible for the fire.
Will you help us? PG&E whistleblowers can remain behind the scenes if necessary. They may be able to serve as non-testifying experts witnesses. Talk to us. Your information will remain confidential unless we have your permission and even then, it will only be used in ways you authorize. Even if you just send us internal documents anonymously, your help is appreciated.
when I originally wrote this post in 2017, I was thinking about the older couple several rooms down the hall at the Napa Winery Inn. That night they had little hope. Hopefully they were treated fairly by their insurance company. We know that many were not.We want to offer those folks hope and get them back on their feet and make sure that other families do not have to suffer again.
Not every wildfire is preventable. We agree with the linemen we spoke with, however. The 2017 and 2018 California wildfires were preventable. Whether laziness or a big utility putting people before profits, much more could have been done to stop this disaster from happening. And no matter who is at fault in these wildfires, there is never any excuse for California wildfire insurance bad faith. Both utilities and insurance companies must be held to the highest standards.
A company’s culture isn’t determined by the lineman and front line workers. It isn’t determined by the insurance adjusters. It is decided by the C-suiters and lobbyists. It’s time for real accountability.
Victim of California wildfire insurance bad faith? (Or bad faith after a fire, hurricane, mudslide, hail storm, etc anywhere in the United States?) Give us a call at (202) 800-9791, online or by email at Although our number is Washington DC, we have lawyers or have partnered with lawyers across the United States. If you are the victim of a California natural disaster, your case will be prosecuted by a California lawyer.
We also invite you to visit our insurance bad faith cornerstone content on How to Sue Your Insurance Company and Win
There is lots going on in Sacramento and the courts.
On the insurance front, the California Supreme Court found that after most homeowners were underinsured. “Recommended coverage nonetheless understated what was actually needed to rebuild the insured’s home over 80 percent of the time. Even when the homeowner had purchased extended replacement-cost coverage, 57 percent of these policies still underinsured their policyholders relative to the cost of rebuilding their homes… In case after case, California residents whose homes had been damaged or destroyed explained why they had believed their homeowners insurance would enable them to rebuild their dwellings. Once they presented their claim to their insurance company, though, these homeowners discovered that their coverage fell well short of what they needed – sometimes by hundreds of thousands of dollars – to rebuild their homes” (Association of California Insurance Companies v. Jones)
The California Department of Insurance has drafted regulations governing replacement cost estimates. Cal. Code Regs., § 2695.183. Now if the insurance company insurer chooses to opine on replacement costs, the new regulation specifies how that estimate is to be calculated.
As to our the company we believe is responsible for many of the fires, PG&E, we are worried that the utility company lobbyists are pushing for liability to shield them from liability when their lines accidentally ignite a blaze
A grass roots lobbying effort called Up From The Ashes is fighting back. A veteran Sacramento lobbyist is leading those efforts, Patrick McCallum. Ironically, he is one of the folks who lost his home. In fact, he and his wife barely escaped the fire and had to flea on foot.
Surprisingly, the International Brotherhood of Electrical Workers, the union that represents 11,500 PG&E workers, is siding with the company.
Whether or not the big utility companies can buy their way out of this mess, we stand ready to fight the insurance companies who engage in bad faith and refuse to properly pay claims. And for those uninsured or underinsured, we will try to help as well.
Our minimum loss for bad faith claims is $1 million. Underinsured and uninsured cases are considered on a case by case basis but generally must be at least $ 1 million.
A Final Plea – Utility Whistleblowers Needed
Unlike other law firms, we investigate cases from the inside out. That means finding insiders that have copies of critical memos or know where to look. We have no doubt that many of the current fires in Northern California were caused by faulty electrical equipment and lax maintenance standards. We ask ourselves every day, how many more people must lose their life, their homes, their business or their livelihood? Worse, this is all driven by PG&E’s drive for profits and dividends for its shareholders.
Ditto for insiders working for the big insurance companies. Most of the California wildfire claims were insured by the following companies:
- State Farm Group
- Farmers Insurance Group
- CSAA Insurance Group
- Liberty Mutual Group
- Auto Club Enterprises Insurance Group
- Allstate Insurance
- Mercury General Group
- Nationwide Corp Group
- Travelers Group
- Chubb Group
- Western Service Contract Group
- National General Group
- American International Group (AIG)
- Hartford Fire & Casualty
If you are a homeowner, business owner or lost a loved one, you may be entitled to substantial monetary damages. Whether it is fighting PG&E or an insurance company, we are ready to help Are you an insider who wants to blow the whistle? There may not be a pot of gold at the end of the rainbow for you although if you have knowledge of insurance company there is a California whistleblower law for private insurance. The most important reason to become a whistleblower is the peace of mind of knowing that dozens of men, women and children didn’t lose their lives in vain. We want to insure this never happens again and shining a light on corporate greed is one of the best methods to do that.
Think you can help us? Your community and we could certainly use several PG&E and insurance company whistleblowers. Give me a call at (414) 704-6731 (direct), online or by email at Even if you remain behind the scenes, your help can really make a difference.
Disclaimer – Any legal services performed in California is always done with handles with California licensed counsel.
NOTE: The San Francisco Chronicle has done a fabulous job of covering the fires. Their images of the fire are like no others.