Tell Insurers To Drop ‘the List’

Homeowners in communities struck by wildfire in recent years know all too well the headaches of dealing with insurance companies. One of the worst parts is itemizing and documenting everything that was in a house to convince an insurer to pay up. California lawmakers should make life easier for people after they lose their homes by banning “The List.”

Unless their home has burned down, most people probably do not know about The List. Insurance companies insist that people who file claims provide an inventory of every lost item and what it was worth - depreciated, of course. Only then will the insurer start to pay for those losses up to the policy amount. If the tally is less than the coverage, the insured gets that lesser amount.

Ideally, every homeowner would make their own list during a spare weekend and update it periodically, just in case.

In reality, few people go through the many hours of tedious cataloging, photographing and assigning values to everything they own - every fork, plate, book, cherished family heirloom and article of clothing. Then, when disaster strikes, they must try to produce an inventory from memory, scanning the backgrounds of photos for proof that something existed and desperately searching for a receipt that shows the cost of a couch bought a decade ago. It serves as a painful reminder of everything they lost and distracts from the many other chores involved in recovery.

State Insurance Commissioner Ricardo Lara wants the Legislature to ban The List. He has proposed requiring insurance companies to pay the full coverage amount in cases of total loss during a declared disaster. He is looking at all the homes lost in Los Angeles and the burden those homeowners now must endure in order to be made whole.

As our former colleague Paul Gullixson wrote in a 2018 column, “If victims of the fire paid for $100,000 of coverage, for example, for the contents of their house, why not pay them all of it? Why put them through the pain of having to prove they have it coming?” Why indeed.

In 2018, Sen. Mike McGuire of Healdsburg and then-Sen. Bill Dodd of Napa introduced a bill that would have required insurers to pay 80% of the maximum limit without documentation. Intense lobbying from the insurance industry led to the bill’s demise. Under public pressure, however, insurers did offer many victims 75% or some other partial payment.

Even though Lara’s proposal goes further, it might have a better chance of becoming law. After years of skyrocketing rates and canceled policies, insurance companies are unpopular in California.

Few people will weep for them if they must make good on a policy that someone has been paying premiums on for years.

Arguably, the law should go even further. Ban itemization in all cases of total loss, not just when a disaster has been officially declared. No homeowner should have to navigate the labyrinthine paperwork and recall every possession when their primary concern is recovery and rebuilding. The current practice is both inefficient and unjust, forcing victims to relive their trauma at a time when compassion and swift response are most needed.

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