Fire victims in Los Angeles County have filed lawsuits against major insurers, including USAA and AAA affiliates, alleging they were systematically underinsured. The lawsuits, filed Wednesday in Los Angeles County Superior Court, claim that these companies underestimated the replacement costs of homes, leaving policyholders without sufficient funds to rebuild after the January 7 fires.
Attorney Gregory L. Bentley, representing the plaintiffs, stated, “These families paid their premiums, trusted their insurers, and did everything right. But when disaster struck, they learned their coverage was little more than an illusion.” The lawsuits accuse the insurers of fraud, negligence, and breach of contract, seeking damages and a reform of their practices.
The fires, which caused at least 29 deaths and destroyed over 16,000 homes and businesses in areas like Altadena and Pacific Palisades, have led to multiple lawsuits. According to Express News, the lawsuits highlight issues with cost estimator software used by insurers and allege that profit incentives contributed to underinsurance.
The lead plaintiffs in the AAA lawsuit, James and Lisa Fulker, discovered their coverage was inadequate when rebuilding estimates far exceeded their policy limits. Similarly, Ethan and Marijana Alexander, lead plaintiffs in the USAA lawsuit, found their insurance insufficient to cover rebuilding costs, with estimates reaching up to $1,000 per square foot.
A spokesperson for CSAA Insurance Exchange and the Interinsurance Exchange of the Automobile Club declined to comment on the pending litigation, while USAA did not respond to requests for comment.
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