“Those who have lost their homes should feel confident that the insurance companies they have paid premiums to will support them in covering their temporary housing and living expenses as they work to rebuild their lives.”
“I am therefore writing to request information on behalf of California policyholders to ensure your companies are expeditiously and fairly providing ALE benefits to those who have been displaced by the fires.”
Washington, D.C. — Today, U.S. Senator Adam Schiff (D-Calif.) sent a letter to the CEOs of the 10 largest insurance companies in California, requesting information and urging them to ensure that constituents displaced by the Los Angeles fires receive adequate Additional Living Expenses (ALE) benefits to cover essential costs until they can safely return to their homes. The Senator’s letter follows reports from constituents who are having difficulty accessing their ALE benefits.
“California law requires insurance companies to pay at least two weeks of ALE benefits to evacuees and provide an advance payment of no less than four months of ALE for policyholders who experienced a total loss. Insurers are further required to provide ALE coverage for a minimum of 24 months after a state of emergency, plus an extension of 12 months if there is a delay in the reconstruction process that are the result of circumstances beyond the policyholder’s control. Those who have lost their homes should feel confident that the insurance companies they have paid premiums to will support them in covering their temporary housing and living expenses as they work to rebuild their lives,” wrote Senator Schiff.
“My constituents expect their homeowners’ insurance to provide them peace of mind that they will have a safe place to live when unthinkable tragedies like the Palisades and Eaton fires occur. It is incumbent on insurers to cover policyholders’ ALE expenses in accordance with state law. Just because a home is accessible does not mean it is habitable,” he concluded.
Full text of the letter is available here and below:
Dear Mr. Farney, Mr. Peacock, Mr. Zukerman, Mr. Sweeney, Mr. Boehm, Mr. Schnitzer, Mr. Tirador, Mr. Wilson, Mr. Westrate, and Mr. Vargas,
Beginning on January 7, 2025, California experienced two of the most devastating natural disasters in our state’s history. The Palisades and Eaton fires destroyed thousands of structures and uprooted entire communities, leaving many Angelenos displaced. Those whose homes are still standing will eventually be able to return to their communities but must not be forced to do so until their homes have been tested, cleaned, repaired, and are safe and habitable. On behalf of my constituents, I am urgently requesting information on your companies’ efforts to provide ALE benefits to policyholders displaced by the fires.
The California Insurance Commissioner has announced several actions to protect communities affected by the Los Angeles County wildfires following Governor Newsom’s emergency declaration on January 7, 2025. In addition to enforcing a legislatively authorized one-year moratorium on cancellations or non-renewals of residential insurance policies in areas within or adjacent to the fire perimeters, the California Department of Insurance is also enforcing California law ensuring that adequate Additional Living Expenses coverage (ALE) benefits are paid to evacuees. ALE benefits cover housing, furniture rental, relocation, storage, extra transportation, and other expenses evacuees incur due to losing the use of their homes.
California law requires insurance companies to pay at least two weeks of ALE benefits to evacuees and provide an advance payment of no less than four months of ALE for policyholders who experienced a total loss. Insurers are further required to provide ALE coverage for a minimum of 24 months after a state of emergency, plus an extension of 12 months if there is a delay in the reconstruction process that are the result of circumstances beyond the policyholder’s control. Those who have lost their homes should feel confident that the insurance companies they have paid premiums to will support them in covering their temporary housing and living expenses as they work to rebuild their lives.
This issue is further exacerbated by contaminated water, smoke damage, and hazardous pollutants – all of which can have lasting health impacts if evacuees are forced to return home before their homes have been properly cleaned and restored. Many Angelenos must wait until the federal and state Environmental Protection Agencies assess, remove, and safely dispose of the hazardous waste left behind by the fires before they can safely return home. According to the Los Angeles County Department of Public Health, the fire debris and ash that resulted from these fires may contain asbestos, heavy metals, chemicals, and other hazardous substances and pose significant threats to public health through inhalation of dust particles and contamination of drinking water. “Do Not Drink Notices” are also still in effect and power has not been completely restored in some areas impacted by the fires. The Department of Insurance has thus advised that, until Phase 1 and 2 of the fire debris removal and cleanup have been completed, impacted areas remain hazardous due to unstable structures, sharp metal, and ash with potentially toxic substances.
My office is hearing from affected homeowners who are having difficulty accessing their ALE benefits until they can safely return home. Some policyholders are reporting that they have had to reapply for ALE benefits on a monthly basis. The Commissioner’s office confirmed these reports in their February 14 Notice citing concerns from policyholders and local elected leaders that some insurance companies are terminating ALE coverage for certain claimants. The Commissioner’s Notice advises all admitted and non-admitted insurance companies of their requirement to exercise due diligence in determining whether a home is habitable or uninhabitable, especially given the ongoing health and safety concerns.
I am therefore writing to request information on behalf of California policyholders to ensure your companies are expeditiously and fairly providing ALE benefits to those who have been displaced by the fires.
In the interest of ensuring that those recovering from unimaginable tragedy are not subject to undue administrative burdens, I am requesting responses to the following questions no later than March 14, 2025:
1) Please provide a comprehensive list of all ALE expenses eligible for reimbursement, as required by California law.
2) What benefits are you making available to evacuees who did not experience a total loss, but whose homes have been deemed uninhabitable and unsafe to return to by state and federal agencies? And will you commit to not forcing residents to return to their homes even before they are deemed inhabitable and safe?
3) What indoor air quality and cleanliness standards do you apply to determine whether a home you have insured is habitable?
a) How do you take into account lack of potable water, downed power lines, smoke damage, hazardous debris, and other factors when making a determination about a policyholder’s ability to safely return to their home?
4) Please provide details on how your company is adhering to the state statutory requirement to provide policyholders with an advance payment of no less than four months of living expenses, including the process for policyholders to access this advance payment.
5) How can policyholders continue to access ALE benefits after the initial advance payment of no less than four months, as required by statute, in the case that it remains unsafe for them to return home?
6) How does your company determine that a home you have insured is safe for habitation?
a) What type of examination and testing is your company conducting?
b) Who is conducting that examination and testing?
c) What is your company’s remediation/restoration protocol for damage caused by wildfire smoke, extreme heat, and ash?
7) How is your company streamlining the ALE application and disbursement process to make accessing ALE benefits as easy as possible for those who have been impacted by the LA fires?
My constituents expect their homeowners’ insurance to provide them peace of mind that they will have a safe place to live when unthinkable tragedies like the Palisades and Eaton fires occur. It is incumbent on insurers to cover policyholders’ ALE expenses in accordance with state law. Just because a home is accessible does not mean it is habitable.
Thank you for your prompt response to this urgent matter.
Background:
In January, the Palisades and Eaton fires tragically uprooted entire communities, displacing thousands of people. In the aftermath of the fires, affected homeowners have had difficulty accessing essential ALE benefits to cover alternative housing, relocation, storage, transportation, and other expenses. Fire debris and hazardous waste left behind from the fires, as well as lack of power and drinking water, have further heightened the problem and magnified the urgent need for policyholders to access these benefits.
The California Insurance Commissioner has announced several actions to protect communities affected by the Los Angeles County wildfires following Governor Newsom’s emergency declaration on January 7, 2025. In addition to enforcing a legislatively authorized one-year moratorium on cancellations or non-renewals of residential insurance policies in areas within or adjacent to the fire perimeters, the California Department of Insurance is also enforcing California law ensuring that adequate ALE benefits are paid to evacuees.
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