Recently, some homeowners who lost their houses in the Los Angeles wildfires have filed lawsuits against USAA and two AAA-affiliated insurance companies, accusing them of underestimating the cost of house replacement, which led to insurance payout not covering the reconstruction expenses. The lawsuit was filed in the Los Angeles County Superior Court this week. The plaintiffs accused the insurance company of fraud and negligence, but did not specify the exact amount of compensation.
The plaintiff’s lawyer, Gregory L. Bentley, claimed that the affected families paid the premiums but did not receive the promised coverage and were in a difficult situation. USAA responded that it has paid nearly 1.4 billion US dollars to help its members recover and has resolved 90% of wildfire-related claims. AAA has not commented yet.
Among them, the cost of rebuilding a house for a pair of Malibu homeowners far exceeded the $380 per square foot estimated by the insurance company, while the actual cost was as high as over $800. Another USAA client’s Pacific Paliside residence is also facing the problem of insufficient insurance.
The wildfire in January this year caused 29 deaths and 16,000 property damages, and insurance companies suffered heavy losses. Companies such as State Farm have applied for a significant increase in rates. Data from the California Department of Insurance shows that there have been 37,000 claims related to fires and $12.1 billion has been paid out. The state government also approved a $1 billion assessment to cover wildfire claims.
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