Nearly a year after CA wildfires, homeowners struggle to recover amidst insurance challenges

SAN FRANCISCO (KGO) -- Nearly a year after the devastating Palisades and Eaton fires, many homeowners are still struggling to rebuild, and they say the insurance process is making recovery even harder.

A new report released this week highlights what experts describe as increasingly troubling trends in the insurance industry, with California homeowners hit especially hard.

Industry experts say more claims are being closed without payment, and even when payments are approved, they're often delayed for months. Many report that payouts once expected to be in the hundreds of thousands have instead been slashed to just tens of thousands, all while premiums continue to rise.

Elisa Jacobs Nixon, an East Bay native whose Altadena home survived the Eaton Fire while much of her neighborhood burned, said the past year has been defined by frustration.

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"We fled down Lake Avenue, dodging power lines and tree branches," she recalled. "And here we are one year later, and our house remains frozen in time from January 7, with most of our belongings still marinated in that toxicity."

Nixon said she had been a State Farm customer for 20 years, never missed a payment and never filed a claim, until the fire. She expected support. Instead, she said, the process has eroded her trust.

"We are living in a daily, exhausting, adversarial process that has become a second fulltime job for me," she said. "This has deepened the trauma. Trauma on top of trauma."

In a statement to ABC7 News, State Farm said:

"We recognize the immense challenges these events have created. Our priority remains helping customers recover and rebuild. Since the wildfires, we have received over 13,500 claims and paid more than $5.1 billion to assist customers on their path to recovery. We work closely with each customer to ensure they receive every benefit available under their policy. Every claim is carefully reviewed based on the policy, the facts, and the damages involved. When needed, we bring in experts, like Certified Industrial Hygienists for smoke claims, to ensure a clear understanding of the loss. We invite customers with questions or concerns to reach out so we can continue to support them through their recovery. Due to our customer privacy policy, we can't discuss the specifics of any individual customer claim."

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Independent agency Weiss Ratings says Nixon's experience reflects a growing pattern affecting insurance customers across the state.

The report identifies six common tactics: flat out claim denials, payment delays, cutting claim playouts, refusal to renew policies, pushing homeowners into high-cost surplus line insurers, and using tort reform measures to make it easier to deny claims. Dr. Martin Weiss of Weiss Ratings said insurers should be required to disclose more data so consumers can make informed decisions.

"We need that data to help empower consumers to make the best choices," he said. "To give them the opportunity to vote with their dollars, to reward the companies that deliver real benefits and punish the companies that deliver most of the pain."

Former California Insurance Commissioner and current Congressman John Garamendi said the practices outlined in the report are not new and that state laws already exist to protect consumers. But he said the next insurance commissioner chosen in an election held next year must be willing to enforce them.

"I don't want to talk to you until you prove to me you've got the guts, the courage to take on this industry," Garamendi said of his endorsement. "The biggest financial industry in America."