California Insurance Commissioner Dave Jones announced on April 2 that insurance claims from the Montecito mudslide and debris flows on Jan. 9 have totaled more than $421 million for damages to residential properties, businesses, and public roadways.
Jones explained that the “unprecedented” wildfire season was the precursor to the “devastating” mudslides, and underscored the financial costs with the human loss of the mudslides, which killed 21 people.
“I think it’s important to note that behind these figures lie loss of life, loss of homes, loss of property, loss of precious mementos, loss of businesses,” Jones said in a televised press conference. “These numbers only tell part of the tale of the devastation that Montecito and other communities suffered.”
The figures shared by the California Department of Insurance were based on actual claims, not estimates, Jones explained.
Of the 2,038 claims made following the mudslides, 1,415 of them were for residential properties, making up the lion’s share of the incurred losses at more than $387 million. There were 235 claims made by commercial properties, totaling more than $27 million in losses. There were 315 personal and commercial auto claims, totaling more than $2 million in losses. Other nonresidential claims—such as aircraft and machinery—included 73 claims with more than $4 million in losses.
Of the residential claims, 107 involved “total losses,” when a house is “completely destroyed,” Jones explained. Some of those homes were “swept completely off” their foundations, he said.
“This gives you some sense of the enormity of the impact on the Montecito mudslides on the community of Montecito,” he said.
Jones had previously visited Montecito and gave insurance claims workshops in early February, and explained during his press conference on April 2 that many residential and commercial property owners were able to avoid certain mudslide exemptions. Jones issued a formal notice in late January to insurance companies reminding them that they were required to cover mudslides if the Thomas Fire was identified as the proximate cause of the debris flows.
The historic fire was the cause, Jones said, according to “the best evidence available to the Department of Insurance.”
“Based on experts we’ve talked to, the fires scoured the hillsides above Montecito, burning all the vegetation, but also so burning the top layer of soil that it creates a hardened crust, and once the rains hit, the water runs down, begins to take mud with it, and before you know it, you have a 30 or 35 [foot] high wall of mud demolishing Montecito,” he said. “As a result of that formal notice to the insurers, insurers have begun to pay mudslide claims, and the importance of that notice was to make sure were doing everything we could to remind insurers of the law in California and what their responsibilities were.”
This article appears in Apr 5-12, 2018.