Will Hilary Hasten California’s Insurance Climate Stampede?

Above, local Los Angeles reporting from KTLA – “Climate change has made actuarial tables that insurance companies have relied upon obsolete.”

Los Angeles Times:

If your home was in the path battered by Hilary, you may be able to get help from your homeowners insurance. But much depends on the type of damage you incurred, because some of what Hilary threw Southern California’s way is not covered by the standard policy.

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The typical homeowners policy covers damage caused by wind and the rain falling onto your house — for example, if your roof is blown off or the rain coming through a leak ruins your bedroom carpet. It also covers the damage from falling trees under certain circumstances — for example, if it was a sickly tree on your property, the insurer could argue that the storm wasn’t the main reason it fell down.

On the other hand, most homeowners insurance policies do not cover damage caused by floods, mudslides, debris flows or similar disasters, according to the California Department of Insurance. Flood insurance, which is sold by the National Flood Insurance Program mainly to people who live in flood zones, covers damage from floods and mudflows, but not gravity-induced mudslides, the Insurance Information Institute says on its website.

There is an exception, the state agency says, if the flood, mudslide or debris flow was caused directly or indirectly by a recent wildfire or another hazard covered by your policy. To be sure, check with your insurance provider. 

The same limitations apply to renters insurance policies. If your laptop is ruined by rain pouring in from a hole in the roof, you can get reimbursed. But if it’s ruined by floodwaters, your renters policy won’t cover it.

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If you don’t have separate flood insurance, you can apply for help from the U.S. Small Business Administration through its Disaster Loan Assistance program — even if you don’t have a business. It’s a long-term, low-interest loan to assist with the rebuilding and repair of damaged property. 

Homeowners in a declared disaster area may borrow up to $100,000 to repair or replace clothing, furniture, cars or appliances damaged or destroyed in a disaster. 

If you submitted a claim and your insurer denies it, you can dispute the decision, Ochoa said. He recommended that you get legal assistance, however, given how complicated the language is in the typical insurance policy. 

If you don’t get reimbursed for your lost items, you can deduct the amount you lost on your state and federal tax returns. 

Taxpayers in a federally declared disaster area who suffer uninsured or unreimbursed disaster-related losses can claim them on their returns for the year of the loss or the previous year.