Distinction between what constitutes a flood and a slide can dictate whether one is covered.

Los Angeles Times

Standing in his mud- and silt-stained Ojai home Thursday, Martin Nation called his insurance agent to describe the damage the winter storms caused when Thacher Creek surged over its banks.

“I told her the water came in with silt and that silt was everywhere. She immediately responded, ‘Well, the policy doesn’t cover any kind of mud damage or mudslide,’ ” Nation said. “She was very hostile. I told her I don’t call this a mudslide. I just meant a lot of water came in and water carries mud and silt, and does damage.”

Homeowners have filed more than 14,500 insurance claims this week in the wake of the record rains, but many are discovering that their insurance policies may not cover their losses.

Damage from mudslides and landslides is not covered by typical homeowner insurance plans. Storm damage from wind and rain seeping through roofs is generally covered by basic homeowner policies.

But actual flooding from the outside, such as a creek overflowing into a house, is generally covered only if a homeowner has special flood insurance. Officials said only a small fraction of California homeowners have this insurance.

Insurance Commissioner John Garamendi expects some debate in the coming weeks about what constitutes a flood versus a mudslide — because the distinction means the difference between being insured and being uncovered.

A key question is whether the federal government will declare a state of disaster in Southern California, a move he said would free up millions of dollars to help homeowners rebuild.

Insurers have sent catastrophe specialists from across the nation to assess the damage in Southern California. Some might conduct what is known as the “shovel test.” If the shovel finds that the damage is mostly liquid, there is a better chance the homeowner will be covered than if the shovel finds mostly solid materials.

Meanwhile, the cleanup continues. State and local officials estimate that damage to homes, roadways and other property could exceed $150 million statewide. Los Angeles County is reporting at least $106 million in damage to private and public property, said Lee Sapaden, a spokesman for the county’s Office of Emergency Management.

And that probably does not include minor damage to thousands of homes — from basement flooding to roof leaks — that residents plan to repair on their own because they fall below their insurance deductibles.

Caltrans is reporting more than $50 million in damage to the state’s highways, said spokesman David Anderson. In Orange County, officials estimated $5 million in storm damage to public property in unincorporated areas alone.

Flood insurance is required in some areas that have a high risk of flooding, such as those adjacent to waterways and below sea level.

But only about 260,000 of the state’s 12.5 million homeowners have flood insurance, Miller said.

Garamendi said more people should obtain flood insurance because it is relatively inexpensive and offers protection against some forms of water damage.

Insurance industry officials said they don’t cover mudslides and landslides because they believe the only people who would pay for such coverage have property with a very high risk of damage.

“It goes against the entire business foundation of insurance, which is about spreading risk,” said Miller. “You’re not going to find landslide insurance. It never existed, with a couple of tiny exceptions over the years. Lloyd’s of London had a policy at one point, but it was very expensive.”

So residents across Southern California are left asking: Was it a flood or a mudslide?

Another term some people are using this week to describe the cause of their damage is “mudflow” — a term to describe muddy water flowing onto their property. Mudflows, they insist, are more liquid than solid, so they are covered by flood insurance.

Garamendi used “mudflows” in describing the destruction in the Ventura County community of La Conchita, where 10 people were killed.

“I think there’s probably no argument that what occurred in La Conchita was a mudflow… versus a landslide or a land movement,” Garamendi said. “Flood insurance does not cover land movements, nor does homeowner’s insurance, unless they’re associated with an earthquake.”

But Michael Shore, a supervisor for the Federal Emergency Management Agency’s flood insurance program, said he saw things differently.

“It seems to me it was probably a landslide,” Shore said of La Conchita.

Shore said he thinks the distinction is fairly clear-cut.

“The difference would be muddy water flowing across the surface of the earth. That’s a flood,” Shore said. “That’s covered as opposed to hills sloughing off because water has penetrated a hillside. That would not be covered.”

Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights in Los Angeles, said it was good that companies were bringing disaster claims specialists in to assess the damage.

“I hope they’re doing this to help people get back on their feet,” Heller said. “The fear is they’re going to bring in people essentially to march around the state and provide a technical rationale for denying claims.”

Nation, the Ojai resident with the storm damage, echoed those hopes.

He said an insurance representative who visited earlier in the week had been very polite and helpful, and even offered tips. Then he spoke to a “completely unresponsive” insurance agent over the phone.

Today, Nation said he expects an insurance adjuster to inspect his home, which has flood insurance because that was a condition for buying it.

“I’m hoping I’m all covered. The adjuster isn’t here yet. I know their job is to save companies as much as possible,” Nation said. “I’m glad they made me get the flood insurance… But I’m pretty sure whatever he grinds me down in coverage, the adjuster gets a bonus.”