Not a Good Neighbor
A TOTAL LOSS: My youngest son stands among the ruins of his childhood home
You know the jingle, “Like a good neighbor, State Farm is there.”
As a wildfire survivor who has suffered a total loss of property and pets, who has also been a customer of State Farm’s since I was sixteen, I’m not convinced that’s true.
Let's play a game. Look around your room. Memorize what you can. Now close your eyes and recall every single thing in that room. Not just the furniture; every book, everything under the furniture, the details of every drawer, every closet, every storage bin. Now do that for every room. Next, imagine all of it, including your trees and your neighborhood, has burned down. Recall every last detail of the place you once knew. This is what insurance requires me to be able to do in order to pay us for the personal property portion of our settlement. We have to recall every single thing we owned, everything we built, everything we lost, while we stand in that ash field, mourning the end of something beautiful. Total loss should just mean a 100% payout, we don't even have a foundation. We should be healing. But that's not how State Farm plays. Instead, four months out, we’re cataloguing our lost belongings by searching our foggy brains while waiting to see if they’ll pay us what we need for the structure.
Creating the inventory they require is to re-live the fire over and over until we think we’ve remembered it all. Your insurance adjuster will tell you that’s it’s cathartic to complete this task. He or she will suggest you go room by room and view it from above, documenting what you see. The first several times I sat down to do this work, I couldn’t get far without seeing the flames enter the room and start to burn it all. How did my bedroom burn? Did the walls crumble first? What did my books look like as they curled under the heat? Was my marriage bed that Walt built next to burn? I imagined the chandelier crashing onto the wooden floor, the fireplace falling onto the deck next to the melting hot tub. Worse, when I got to the dining room, I remembered that’s where I’d last saw my cat, Sebastian. Then I’d have to take a break, for the images of him dying were too much to bear.
It took me almost three months to finish the first round. Not only did we need to list every item, our first attempt has over 2000 line items, each one a pretty little hurt to my heart, we also had to suggest a replacement cost, with links if the value was more than $500. This took hours and hours of my time but if I didn’t do it, then State Farm would put in the replacement value and it would be the cheapest version of whatever it was. Not the Cutco knives we had but Kohl’s $85 set. You need to dig deep to get the most of your policy.
Here’s the kicker and something I never understood as a customer, the inventory is just the first part of the work. Once State Farm has this list of 2000 items, it will then depreciate the entire contents, paying us for only the actual cost at the time of the fire. Worse, they use proprietary depreciation algorithms that they won’t share. Each item has a lifetime. You tell them how old the item was and in what condition and then the tool determines an actual cost at the time of the fire. If you have a 4 year old couch that’s in good condition, and they think a couch only has a 10 year lifespan, then they will pay you 60% of the replacement cost. When you go to actually replace the couch, you turn in the receipt and they will give the difference, if any. This has to be done for every single thing you owned, or at least everything you think you must replace, within two years of the fire. In our case, because the CZU Lightning Complex was declared a national disaster, we have three years.
Three years to try and replace everything that matters. Pretty difficult since I don’t even have a home and might not in three years. Since we’re rebuilding, we’re at the mercy of the process; the cleanup phases, the permitting phases, the availability of crews and technicians. The biggest ticket items: furniture, beds, linens, patio, and art all must wait until I have a home. Will there be time enough for me to decorate my new home before the time limit runs out? And what about those collections, like the Christmas ornaments and the two libraries, that we curated over a lifetime? Shouldn’t they pay us for the replacement now and allow us the rest of our lives to replace it, not just three years?
It’s a process set up in State Farm’s favor; one in which they know two things. First, that we will forget much of what we owned, due both the trauma of losing so much as well as the fact that no one has memorized the entire contents of their garage, or closets, or the junk drawer in their kitchen. Second, only the most diligent can survive it. My husband did an estimate that to fulfill this requirement with State Farm I would have to turn in an average of three receipts a day, 365 days a year, for three years. That’s my life for the next three years? Keeping track of every non-perishable item we buy and turning in the receipts?
There are better ways to do this for total loss victims, and the California Insurance Commissioner, Ricardo Lara, issued a notice to all insurers in California in early October 2020 to consider paying out the contents portion of the policy without requiring an inventory and instead to grant a fair one-time payment. Given the amount we were insured for, Walt and I decided that a fair settlement would be 70%. We were unlikely to replace everything and to be fair, didn’t own the full amount we were insured for. However, from our initial rooms, we guessed the replacement cost for what we owned was close to 70% of our maximum. So we made State Farm an offer, pay us 75% and we’ll be done. We figured to start there and then negotiate down to 70%. No inventory, no depreciation, no three years of tracking every expense while we’re trying to heal from this traumatic event. They save money and we save our souls.
State Farm refused.
I filed a complaint with the state insurance commissioner. This forced my adjuster’s boss, Mark Saturday, to get involved. He too refused us, stating that the law was on their side and required us to follow the contract we agreed to, which required the inventory, depreciation, replacement game. Mr. Saturday, what a great name for an insurance guy, am I right?, seemed insulted that we’d consider it a game. He tried to convince us this was in our best interest while we tried to convince him that it was an incredibly cruel thing to force total loss victims to do this. There’s nothing but ashes left. They have no proof if I had an Oscar De le Renta purse, a Coach purse, or a Simply Vera purse from Kohl’s. Moreover, there’s little proof of the age or amount of anything I had. I could swindle them and make up a bunch of shit, but that’s not the person I am. I did my best to recall it all and play this game with honesty, but it hurts so, so much.
I realize that insurance isn’t set up for a total loss like this, and in many ways, that’s a good thing. We don’t want to center business on disaster situations. However, we should be disaster aware and good neighbors help each other out in such situations. Farmers, AAA, Nationwide, Chubb, and American Modern all paid out large personal property settlements to many of my neighbors without requiring an inventory nor the long replacement process. They averaged from 75-100% of maximum coverage. These friends of mine are free to look forward to rebuilding their lives and know that they have enough money to furnish and replace whatever they need to, when the time comes. State Farm has taken care of us when it comes to Loss of Use, however we’re waiting on the real stuff—how much they depreciate our goods will dictate how much more work I have in the future tracking all purchases. Think of it, all my Christmas decorating and gifts for Walt and the boys will essentially be replacements. We’re calling it the “State Farm Christmas”, but I really would rather not be searching the document for each line item I’m replacing under the Christmas tree and then sending them on to my adjuster. He’s a nice guy, but I’m not interested in such a long term relationship.
The same goes for the structure settlements as well. State Farm knows at this point there’s NOTHING left. Not even the foundations or driveway. It’s all gone. So why not pay out the maximum for structures and move on? Why are we waiting four months later when we all know what the answer should be? Is it about their losses and stocks? We can’t begin to work with our architect or builder until we know our budget. Will they give us the 100%, especially since we have over $100,000 in land preparation costs alone, plus brand new foundations and driveway, plus a house and garage? 2020 is ending and we’re stuck in limbo, with State Farm holding on to our equity like a child clinging to his candy. Again, the other insurers have finished with my neighbors. Only State Farm customers are still waiting on the mountain, wondering if they’ll be financially okay or not while trying to recall all the things they lost and not lose their minds.
Unfortunately, those of us who live in disaster prone areas like California or the Atlantic coast, don’t have a lot of options. Few insurers are writing new policies on the mountain, so really they can do what they please with us and we have to accept it. Just before the fire, many of our Farmers friends had just been told they wouldn’t be renewed this year. Since the fire, California has forced all insurers to keep us for another year, but in the long run, I think the state of California needs to pull wildfire out of the insurance bundle, not fire itself since that can happen due to electrical malfunctions, forgotten candles, or drunks falling asleep with cigarettes in their mouths, but wildfire as a natural disaster, whether man-made via a fireworks at a gender reveal party or by lightning (yes, both happened at the same time the week of 8/16/2020 in California.) The state will need to insure wildfire separately, like they do earthquake. Normal policies can still be granted to homeowners and that will keep the housing market alive. If you live in a wild urban interface (WUI) then you should consider purchasing additional insurance for wildfire, just like earthquake. I never purchased earthquake, I didn’t need it because my home was on a granite mountain. But if I lived in town I would. Vice-versa my friends in town don’t need wildfire insurance, but they do need earthquake. And in some places, you’d need both. It’s called a lifestyle choice in the insurance world, and there is insurance that supports such risky locations.
After spending four months focusing on the things I lost, I need to look forward to protect the things that don’t yet exist—the new house and everything inside of it. It’s a dangerous world we live in, one in which disaster and climate refugees are no longer rare. I feel for the insurance industry, but at the moment, a company like State Farm is still rolling in the dough. They don’t have to make us grovel. They could treat us like total loss victims and pay out the total loss, 100% since it’s all gone. In the future though, I’m for insurance reforms that put wildfires in the hurricane, floodplain, and earthquake categories. I have to pay more if I want to live there because the likelihood of it burning again is high. That’s fair.
That’s another reality I must accept—that whatever we’re creating as well as everything we own, could once again go up in flames, perhaps even uninsured if the majority of insurers begin to pull out of California. It’s a strange thing to build a house on sand. For no matter how fire resistant we make the home and the property, if another firestorm comes roaring up the canyon, it could all be gone in the blink of an eye.
Again.