Reinsurance News

Montecito mudslides cause over $421mn in re/insured damages

3rd April 2018 - Author: Matt Sheehan

California’s Insurance Commissioner Dave Jones has announced that the Montecito mudslides, which hit California’s Santa Barbara County in January 2018, have already resulted in over 2,000 insurance claims that total more than $421 million in losses.

California mudslides MontecitoThe mudslides carried tonnes of mud and debris through the Montecito community, destroying or damaging around 400 homes and business, killing 21 people and injuring hundreds more.

Commissioner Jones claimed there was substantial evidence that the recent California wildfires were the efficient proximate cause of the mudslides, and issued a formal notice to all property and casualty (P&C) re/insurers reminding them of their duty to cover all damages in such an instance.

Jones had previously told insurers that they should honour mudslide claims if the wildfires are proven to be a proximate cause of the event, due to their stripping of ground-cover which exacerbated the flooding.

So far, all surveyed re/insurers have recognised the proximate cause doctrine and have been processing and paying the mudslide claims under homeowner policies.

Jones commented: “Over $421 million in insured losses represents more than property lost—behind these numbers are the tragic deaths of 21 people and thousands of residents traumatized by unfathomable loss.

“Recovering and rebuilding lives, homes and neighborhoods will take time—and it will be difficult. We will continue to do all we can at the Department of Insurance to help residents navigate the claims process and recover.”

Jones and other department represents also visited residences impacted by the mudslides, met with survivors, and held an Insurance Claim Workshop in Santa Barbara to ensure the community was aware of all available resources during the rebuilding and recovery process.

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