California Legislation Aims to Clarify Mudslide Insurance.

The California Senate has approved legislation that seeks to clarify homeowners’ insurance coverage following deadly mudslides near Santa Barbara.
Insurance policies generally cover damage caused by fires but not by mudslides. That creates confusion in cases like the mudslides in Montecito, which were triggered by a wildfire.

In such cases where multiple factors combine to cause damage, courts have ruled that insurers must pay if the policy covers the “efficient proximate cause,” the most important cause, of the damage.
Most insurers have agreed to cover damage in Montecito, but Sen. Hannah Beth Jackson thinks enshrining the existing legal doctrine in law would help future mudslide victims avoid prolonged fights with insurers.
“It is important that the insurance industry know very clearly, without equivocation, their responsibility to their policyholders that they must cover these costs,” said Jackson, a Democrat from Santa Barbara.
Insurers oppose the bill. Their lobbyists say it goes further than the existing legal interpretation and might force them to cover losses they wouldn’t otherwise have to cover. That could require them to raise their rates or decline to offer coverage in some areas, they say.
“When you put something in statute, any interpretation of the courts, they’re going to presume that there’s a change in law,” said Armand Feliciano, vice president of government relations for the Property Casualty Insurers Association of America. “Otherwise why would the Legislature do it? Now you’ll have other lawsuits that probably didn’t need to happen.”
The measure specifically says it’s not intended to change existing law, but Feliciano said there could still be legal disputes over the meaning.

SB917 was approved in a 25-11 vote and goes next to the Assembly.
More than $421 million in insurance claims have been filed for residential and commercial losses related to the mudslides, Insurance Commissioner Dave Jones said last month.
Recently burned by California’s largest recorded wildfire, the hillsides of Montecito northwest of Los Angeles could not absorb the rainstorm with an epic downpour of nearly an inch (2.5 centimeters) in 15 minutes early on Jan. 9.
Twenty-one people were killed and two remain missing.
By Jonathan J. Cooper