Homeowners whose properties were destroyed in the Los Angeles County wildfires are suing USAA and two insurance companies affiliated with AAA – CSAA Insurance Exchange and Interinsurance Exchange of the Automobile Club – claiming they intentionally underestimated the replacement cost of the homes, resulting in the policyholders having inadequate coverage.
The Los Angeles Times reports the lawsuits accused the companies of allege fraud, negligence, breach of contract and other causes of action, and seek damages and reform of the insurers’ practices, claiming there is “pervasive” underinsurance stemming from the “cost estimator software many insurers use to recommend coverage limits to insureds.”
“These families paid their premiums, trusted their insurers, and did everything right,” said Gregory L. Bentley, an attorney for the plaintiffs. “But when disaster struck, they learned their coverage was little more than an illusion. These companies promised peace of mind, but instead left their members stranded, homeless, and hopeless.”
The new lawsuit is the latest litigation rising from the wildfires, which include several lawsuits filed against the California Fair Plan Association, the state’s insurer of last resort.
Man I’d love to get a peek at those policies! They actually could be in line and sufficient replacement cost, yet local contractors are now gouging due to high demand and shortage caused by the disaster. I encourage fire victims to look for more bids to rebuild sourced from out of area licensed contractors not impacted by the demand.