Insurers should be on the hook for Montecito mudslide damage, commissioner says

Montecito residents who are hoping that insurance will cover damage to their homes from recent mudslides received a word of support from an important ally on Monday.

California insurance commissioner Dave Jones issued a notice to insurers outlining his office's position that they should be on the hook for that damage.

Most homeowners’ insurance policies exclude coverage for mudslides. But they do cover fire-related damage. And Jones said under California law, when the facts on the ground show that a fire is the "efficient proximate cause" of a mudslide, that damage should be covered.

"Preliminary indications that we have at the Department of Insurance are that the fires burned vegetation that was holding soils in place and absorbing water," said Jones. "And with the vegetation burned, when the rain came down the hills came down as well." 

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Hundreds of Montecito homes were damaged or destroyed by mudslides in the wake of the Thomas Fire. Jones said that at this point, it looks like insurers should be treating the fire as a cause of the mudslides.

"If this bears out, I expect them to pay claims," Jones said. 

Amy Bach is the executive director of consumer advocacy organization United Policyholders. She said this move could help residents put pressure on insurers who may be reluctant to pay out.

"The insurance commissioner's action is definitely going to empower these devastated homeowners to give their best shot at trying to get some insurance coverage to pay for the replacement of their homes," said Bach. 

Jim Whittle, associate general counsel at the American Insurance Association, said in an emailed statement, "Insurers are working aggressively to adjust residents' claims and fast-track their recovery. We appreciate the Commissioner's continuing communications with our industry, and we agree that the cause of each loss will be an important consideration in handling claims appropriately."

Commissioner Jones said the Department of Insurance has already received some calls from consumers who've been told, on a preliminary basis, that their policies do not cover mudslide damage.

In an interview Tuesday with Take Two, Jones said he'd be hosting a claims workshop in an effort to provide more assistance. The workshop will be held Saturday, February 3 in two sessions, one at Ventura City college from 10 a.m. to 4 p.m. and the other at Santa Barbara City College from 4 p.m. to 6 p.m.

Consumer service professionals will be available for one-on-one sessions with fire survivors, and insurers have also been asked to come. 

Appointments are encouraged and can be made by calling 1-800-927-4357. 

You can listen to the interview with Jones by clicking the extra audio on this story.

This story was updated on Tuesday, January 30.