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Fire-weary California homeowners have long road to recovery

AP Personal Finance Writer

Californians who lost a home to the state’s wildfires are likely to be faced with a nightmarish recovery as they try to rebuild.

It’s always difficult to recover from a disaster. But for the California residents who lost property in the latest string of wildfires to hit their state, getting back on their feet is likely to be particularly hard.

Experts say the blazes of recent years have increased construction costs and created unusually high demand for the sorts of workers needed to help rebuild.

Homeowners can also find themselves puzzled about their insurance coverage. Some might even discover that they’re underinsured, leaving them to bear more of the cost of rebuilding than they had expected.

The frequency of blazes in California has prompted state officials to pass a spate of laws intended to help victims of wildfires. Yet, even with the additional assistance, experts say it can still sometimes take years for a home to be rebuilt.

California is now fighting three fires — the Camp Fire in the northern part of the state and the Woolsey and Hill fires just outside of Los Angeles in the south. Statewide, thousands of people have been told to leave, more than 225,000 acres have burned and 44 people have died.

The Camp Fire is now deemed the most deadly in the state’s history — killing at least 42 people and burning more than 125,000 acres. Months before, there was the Mendocino Complex fire, which burned more than 459,000 acres and led to more than $56 million worth of insured losses.

The credit-rating agency Moody’s estimated on Monday that the cost of the insured losses from the three current fires would range from $3 billion to $6 billion. The staggering price tag is the result in part of the size of the fires but also the cost of rebuilding — taking into account both materials and labor.

Dan Dunmoyer, president and CEO of the California Building Industry Association, said high demand for housing meant builders were having trouble finding enough workers even before the fires broke out. With the recent blazes, the situation has only become worse.

“If your home burns down by itself, you have no problem rebuilding, but if it burns down with 2,000 others, you have to wait,” Dunmoyer said.

Homeowners also sometimes find themselves struggling with their insurance policies.

United Policyholders, a nonprofit group meant to help consumers with insurance questions, said it regularly hears from policyholders who are having a hard time understanding their insurance will provide them with following a disasters. Some people run into trouble because their policies have been recently revised or the cost of rebuilding their property has been underestimated too low. Homeowners can unexpectedly find themselves on the hook for large expenses.

Using polls of people living in disaster-hit areas, United Policyholders estimates that roughly two-thirds of the insured households in such places are actually underinsured.

“The insurance piece really gets people because they felt like it was the rug getting pulled out from under them,” said Amy Bach, executive director of United Policyholders. “OK, I lost everything, but at least I have insurance. But then insurance is a fight.”

Although working with insurance companies can go smoothly for some, others feel like “mother nature just took my house, now insurance took my sanity,” she said.

In California, concerns about insurers became so pronounced that a series of laws were passed to help protect homeowners.

Homeowners get three years under the new rules for rebuilding. They can also have a six-month extension if they encounter delays that are beyond their control.

To help prevent the sticker shock some victims can suffer, insurance companies now must also now provide revised rebuilding estimates every time a policy is renewed. Other changes give homeowners more time to sue insurers following a declared disaster.

All the same, Insurance Commissioner Dave Jones has expressed disappointment the state couldn’t do more. Californians are still able to obtain property and casualty insurance, although Jones has previously warned that the increasing number and severity of wildfires will make policies harder to obtain and more expensive in the future.

Copyright 2021 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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