Cal­i­for­nia bill seeks to clar­ify mud­slide in­sur­ance

Imperial Valley Press - - LOCAL REGION -

SACRA­MENTO ( AP) — The Cal­i­for­nia Se­nate ap­proved leg­is­la­tion Thurs­day 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.

MATT UDKOW/SANTA BAR­BARA COUNTY FIRE DEPART­MENT VIA AP

This Jan. 10 aerial file photo pro­vided by the Santa Bar­bara County Fire Depart­ment shows mud­flow and dam­age to homes in Mon­tecito.

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