California Wildfires; Insurance Controversy; Home Protection

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CNN-TV – Open House Program

GERRI WILLIS, HOST: Hello, and welcome to a special edition of OPEN HOUSE. We’re coming to you from Rancho Bernardo, California, where we’ve been all week covering some of the worst wildfires in California’s history. You can see the devastation behind me.

As of this date, 1,800 homes have been demolished, as much as $2 billion in damage, that according to the California Insurance Commissioner‘s Office. Nine fires still raging. We saw smoke today driving in here.
And this isn’t just a California story. In fact, more than half of you don’t have enough insurance if something like this happens to your home. You won’t be able to rebuild. We’ll be talking about that problem in this show, today. As well as new technologies that would help you save your home.

(BEGIN VIDEOTAPE) – WILLIS: Whether or not you live in an area that is affected by wildfires you should have a home inventory guide. Listing all of your possessions in the event of a disaster or burglary can be difficult. To guarantee that your family returns to live as usual quickly by keeping an up-to-date list of the contents of your house.

Update your guide regularly, including serial numbers for new electronics. Be sure to make copies of your inventory and store these in safe, easily accessible places. For more information creating your own home inventory guide, head to That’s your “Tip of the Day.” (END VIDEOTAPE)

WILLIS: You know, as many people come back to these neighborhoods, they are going to be trying to put their lives back together, but they’re also going to be trying to find out if they have enough insurance coverage. The insurance controversy is heating up. As a matter of fact in July, Allstate decided they would write no more new policies in California. It’s going to be interesting to see whether these insurance companies decide to continue writing after the disaster. Chris Lawrence has details about the controversy.

(BEGIN VIDEOTAPE) – CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): At least 5,000 insurance claims have already been submitted in southern California and the fires are still burning.

UNIDENTIFIED MALE: We got the whole block gone.

LAWRENCE: Families coming back to these neighborhoods could be in for a second shock from their insurer. If recent fires are any indication, some of their premiums will double when the home is rebuilt. Insurers are also ordering homeowners to clear brush, cut down trees, even install fire-proof roofs. The improvements can cost up to $20,000 with no guarantee their policies won’t be canceled.

SHARMILA BRUSHAN, CALIFORNIA HOMEOWNER: Right behind our house, we have cleared everything. I even put some irrigation and plants.

LAWRENCE: Even with sprinklers and other safety features, Sharmila Brushan says she’s been threaten with cancellation and charged exorbitant rates for her home at the bottom of a hill.

BRUSHAN: Basically, they just don’t want to take any risk, at that’s what insurance is is for, to manage your risk.

LAWRENCE: Managing that risk can be profitable. State Farm and Allstate each made $5 billion in profit last year.

DOUGLAS HELLER, FOUNDATION FOR TAXPAYER & CONSUMER RIGHTS: The insurance industry is looking at American consumers sort of like they look at a casino. We just hit three blackjacks in a row, let’s take our chips off the table and leave.

LAWRENCE: Consumer advocate, Doug Heller, says the company’s message is clear.

HELLER: We’re going to force you to spend more money to comply with our new fangled policy rules and if you don’t spend that money, we’re dropping you.

LAWRENCE: Allstate has stopped accepting new clients anywhere in California. The company says costs have skyrocketed and Allstate has to ensure it’s got enough money to help nearly on million Californians who already have an Allstate policy.

Insurers are asking, how can we keep rebuilding entire neighborhoods when firefighters tell us they will eventually burn?

CANDYSEE MILLER, INSURANCE INFO NETWORK: He looked at Scripps Ranch and said, I fought that same fire 20 years ago. And there’s another firefighter who’s probably going to fight it probably 20 years from now. So, it really begs the question, are we building in safe areas?

LAWRENCE: Shamila Brushan says her home in Scripps Ranch is safe. Insurers see what that same property looked like after the fire four years ago and aren’t so sure.

(on camera): And her house is one of many, more than half the homes in California are technically in wildfire red zones. That’s why state senator is calling on California’s insurance commissioner to enact emergency regulations that would all but guarantee reasonable insurance coverage for all of the people affected by these fires.

Chris Lawrence, CNN, Escondido, California. (END VIDEOTAPE)

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