California AIG Sylmar Wildfire Survivors To Receive Additional Coverage

The California Department of Insurance CDI) has secured between $37
million and $46 million in additional coverage from AIG for Sayre Fire
survivors in Sylmar. Commissioner Poizner was joined by Los Angeles City
Councilmember Richard Alarcón; Amy Bach, executive director of United
Policyholders and a Sayre wildfire survivor and AIG policyholder who,
until this agreement was reached, was unable to afford to rebuild her
“Losing your home and all your belongings in a wildfire is absolutely
devastating,” said Commissioner Steve Poizner. “After years of making
payments on their policies, homeowners count on their insurance
companies to come through when they need them most – when they lose
everything. I am pleased that through our decisive action and firm
negotiations, the Department of Insurance and AIG were able to enter
into an agreement that will secure up to $46 million in additional
coverage for wildfire survivors.”
The Sayre Fire tore through Sylmar in November 2008, completely
destroying 485 mobile homes. AIG insured 370 of those mobile homes. It
is CDI’s position that all 370 AIG policies included a stipulation that
provides either 110 percent or 125 percent for additional coverage in
the event of a total loss. After the Sayre Fire destroyed the homes of
370 AIG policyholders, the company advised the policyholders that the
110 percent enumerated in their policies actually meant 10 percent
additional coverage, and 125 percent actually meant 25 percent
additional coverage for policyholders. As many wildfire victims
attempted to rebuild their lives, they found that the policy limits
being offered by AIG were insufficient to replace their mobile homes.
Upon receiving complaints from fire survivors, CDI took immediate
action. CDI took the position that coverage should be afforded for 110
percent or 125 percent of additional coverage and urged AIG to offer the
higher policy limits to all wildfire victims. While CDI and AIG had
different positions on how the policy should be interpreted, after weeks
of negotiations, New Hampshire Insurance Company an AIG company)
agreed to offer its insureds the additional 110 percent or 125 percent
of coverage being sought by the CDI. In reaching this agreement, the
best interests of the policyholders are being served. The agreement will
result in up to $46 million in additional coverage for fire survivors,
an average of about $100,000 to $125,000 in additional coverage per
“We commend the Commissioner and his team for negotiating this important
agreement on behalf of the hundreds of AIG policyholders who lost their
Sylmar homes and need every promised dollar of insurance coverage to
rebuild,” said Amy Bach, a consumer rights advocate and executive
director of United Policyholders.
Los Angeles City Councilmember Richard Alarcón said, “I want to thank
the local disaster recovery advocates who brought this to the attention
of my office so we could work with the Insurance Commissioner to ensure
that the Oakridge residents received what they were entitled to and I
thank the Insurance Commissioner for following through.”
In January, Commissioner Poizner hosted an Insurance Recovery Forum for
Sayre Fire survivors, where he was joined by local, state and federal
officials, as well as representatives from the insurance industry, to
answer specific insurance questions for fire victims. CDI has received
46 complaints involving a number of insurance companies from Sayre Fire
survivors. These complaints mostly involve claims delays. Some involve
claims denials and five involve an underinsurance allegation. The
Department is currently investigating and mediating all these complaints
to ensure that the Sayre Fire survivors obtain prompt and fair