Fire victims’ insurance inadequate

Many Southern California homeowners who thought they were fully insured against natural disasters have discovered after October’s wildfires that their policies left them shortchanged -- in some cases, hundreds of thousands of dollars shy of what they need to rebuild.

Dozens of homeowners told California Insurance Commissioner John Garamendi during public forums in San Diego last week that their insurers wrote policies based on their calculations of a home’s “replacement cost,” only to learn that the insurers’ estimates were grossly inadequate.

After three forums in San Diego County and one in San Bernardino County, Garamendi said he was launching a special team to investigate complaints, promising a “complete, thorough audit.”

If investigators uncover patterns of wrongdoing, insurers could be barred from doing business in California or be ordered to pay fines, he said. Insurance company officials at the forums declined to discuss individual cases but denied widespread wrongdoing.