Amid the outbreak of the new 'Hughes Fire', in North Los Angeles, homeowners face renewed distress as they struggle with underpaid insurance claims following recent fires
A fast-moving wildfire, Hughes Fire, broke out about 50 miles (80 km) North of Los Angeles in the late morning of January 22, prompting evacuation orders for more than 50,000 people in the US state, reported Associated Press. Within just a few hours, the fire grew to two-thirds the size of the Eaton Fire, one of the two monster conflagrations that have ravaged the Los Angeles area.
The Hughes Fire charred about 15 square miles (39 square kilometers) of trees within six hours, threatening brush near Lake Castaic, a popular recreation area about 40 miles (64 kilometers) from the destructive Eaton and Palisades fires. Despite a red flag warning, slower winds allowed firefighting aircraft to dump tens of thousands of gallons of fire retardant, unlike during the initial outbreak.
As the Hughes Fire raged, the two deadly fires that have been burning since January 7 in Los Angeles were brought under greater control, reported Reuters. The Eaton Fire, burning 14,021 acres east of Los Angeles, was 91% contained, while the larger Palisades Fire, which has consumed 23,448 acres on the west side, was 68% contained.
The ongoing wildfires in Los Angeles have not only caused widespread destruction but also reignited the trauma experienced by homeowners in recent years. As the survivors struggle to rebuild their lives, they continue to face the harsh reality of underpaid insurance claims, compounding their distress.
A 2023 paper published by the Federal Reserve Bank of Philadelphia highlighted concerns about the adequacy of insurance payouts for homeowners. Analysing policy and claims data from California wildfires between 2013 and 2020 which burned at least 100 acres and one structure, researchers found nearly 40% of post-fire claims were underpaid, reported Bloomberg.
The paper revealed that homeowners typically receive only about 72% of what they’re legally entitled to, possibly due to reluctance in engaging in lengthy, difficult negotiations with “unsympathetic customer service agents”, added Bloomberg.
The report also estimates that households receive $200,000 to $300,000 less than what they are entitled to under California law, Bloomberg added.