California residents battered by brutal wildfires in November have filed $11.4 billion worth of insurance claims, making the spree of flames that gripped Butte County and Southern California among the costliest in state history, officials said Monday.
About three quarters of the reported losses stem from the Camp Fire, which killed 86 people and destroyed nearly 14,000 homes in and around the foothill town of Paradise. Most of the remaining casualties are from the Woolsey Fire, which took three lives and leveled hundreds of homes along the Malibu coast.
The extent of the claims reported by the California Department of Insurance underscores the hardship of recovery that many parts of the state are facing. Insurance companies are processing an unprecedented 46,000 payment applications as whole communities seek to rebuild. Pacific Gas and Electric Co., already faced with crushing liability after being blamed for several fires in 2017 and suspected in some of the 2018 burns, could see its financial pains worsen as the new numbers come to light.
Insurance Commissioner Ricardo Lara said at news conference Monday that even as PG&E eyes bankruptcy, a move that could limit any obligation the company has to help cover losses, he expects victims of the blazes to be fully compensated.
“Regardless of who’s at fault, we are confident that insurers have the money to make people whole,” Lara said.
The extent of the damage, though, is prompting some insurance companies to raise rates and even deny coverage to property owners in high-risk areas. Acknowledging the trend, Lara said the Department of Insurance, which oversees California’s insurance market, was making sure companies were playing fairly and not taking advantage of customers.
Representatives of the insurance industry said the toll of California’s wildfires, while not insignificant, is a cost they can absorb. Changes in rates and coverage options are only natural, they said, as they consider the increasing frequency of fire and the growing costs of rebuilding.
“It’s a constant balancing of your book of business,” said Janet Ruiz, spokeswoman for the Insurance Information Institute, a nonprofit trade group. “No one company wants to assume all the risk.”
The claims from the November fires represent about 13,000 insured homes and businesses that went up in smoke, according to the department. So far, about half of the payment applications have been processed and paid out.
The agency does not track the level of damage for uninsured homes and businesses.
The total insured losses in November are only slightly less than what was reported in the late 2017 California wildfires, which ravaged Wine Country as well as Santa Barbara and Ventura counties over the course of two months. Insurance claims from October and December of 2018 totaled about $11.8 billion.
In December, the Department of Insurance offered a slightly lower estimate of last year’s November losses, about $9 billion, a total that has jumped as claims have continued to pour in. The new figure is expected to grow further, though minimally.
For all of 2018, insured damages in state wildfires are estimated to be $12.4 billion. Other big fires last year include the Carr Fire in Redding and the Mendocino Complex Fire near Clear Lake in Lake County, both in July, which together prompted about $935 million of insurance claims.
Following last year’s fires, the Department of Insurance issued a formal notice to insurers asking them to expedite payment of claims.
“To the residents of Paradise, Butte, Malibu, Los Angeles and the other communities who have lost so much, we stand with you on the long road to recovery,” Lara said.
Kurtis Alexander is a San Francisco Chronicle staff writer. Email: kalexander@sfchronicle.com Twitter: @kurtisalexander
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