California Requests Insurers to Ease Burden on Wildfire Victims by Waiving Itemization Requirement

California’s top insurance regulator, Ricardo Lara, has urged insurance companies to provide full coverage to victims of the recent wildfires without requiring them to submit a detailed inventory of their lost possessions.

The request follows mounting frustration from homeowners whose properties were destroyed in last month’s fires. Many residents, already overwhelmed by the trauma of losing their homes, have struggled to create itemized lists of every item lost to qualify for the full payout from their policies.

In a statement released Thursday, Lara acknowledged the emotional and logistical strain the itemization process places on wildfire victims. He set a deadline for insurers to notify the California Department of Insurance by February 28 whether they would comply with the request. While the notice does not carry the weight of law, the department hopes insurers will act in the best interest of the policyholders.

For years, consumer advocates have criticized insurance companies for requiring detailed inventories in order for homeowners to receive the full amount of their coverage. This issue has become especially pressing in wildfire-affected areas like California, where thousands of families are facing the added stress of finding new homes and schools. Michael Soller, Deputy Insurance Commissioner, emphasized the emotional toll on homeowners, describing how difficult it is for victims to remember every item inside a home that no longer exists.

The California Department of Insurance had previously addressed this issue last month, with a bulletin reminding insurers that, under a state of emergency, they must advance up to 30% of a home’s dwelling limit—up to $250,000—without requiring itemization. Homeowners hoping to receive the full policy limit must still provide a comprehensive list, often including specific details about each item.

Lara’s Thursday notice aims to alleviate some of the burden by encouraging insurers to waive the detailed listing requirement altogether. This move comes just hours after an article in The New York Times highlighted the exhausting and painful process faced by one homeowner in Altadena, California, as she attempted to list her destroyed belongings. Consumer advocates argue that these extensive requirements can discourage policyholders from claiming the full value of their policies.

Homeowners who have experienced the process firsthand have described it as emotionally taxing. Donna Granata, a resident of Casitas Springs, California, recalled assisting friends after they lost their home in the Thomas Fire of 2017. She observed how the itemization task caused deep distress, as it forced individuals to recall every item they had lost in the fire.

“Be prepared to cry,” Granata advised.

She described how the process often led people to shut down emotionally.

Similar struggles have been reported across the country, such as by Dianne Averill from Hopewell Junction, New York, who painstakingly compiled an inventory of more than 75 items lost in a basement flood.

The insurance landscape in California has been further complicated by the departure of major insurers from high-risk wildfire zones. Many of these companies, including State Farm, have been raising premiums or halting coverage in areas prone to wildfires. Some homeowners have been forced to seek coverage from the California Fair Plan, a state-run insurance program that offers limited coverage but typically at higher costs.

Last month’s fires caused significant damage, destroying approximately 16,000 homes and incurring an estimated $30 billion in losses. In response, State Farm has already paid out over $1 billion in claims and announced plans to drop around 30,000 homeowners from its policies in the state. These shifts in the insurance market have placed further pressure on homeowners, many of whom are struggling to navigate both their insurance claims and the broader housing crisis following the fires.

The Wall Street Journal and the New York Times contributed to this report.