Many of us have had our homeowner’s insurance canceled as a result of the threat of wildfires. My policy was canceled a couple of years ago even though we are in a Firewise subdivision. The thousands of dollars I spent on defensible space meant nothing to the company. As such, like many of you, I became familiar with California FAIR Plan insurance.

CALIFORNIA FAIR PLAN INSURANCE

Our case today involves Kimberly and James Talbot who own a home in a mountainous area facing fire danger – as the court wrote. They live with their daughter Wexler. Notwithstanding that the policy was in the name of the Talbots, Wexler made a separate claim alleging smoke damage to her personal property from the wildfire in her parents’ home.

California FAIR denied Wexler’s claim because she was not named on the policy although apparently the Talbots could recover for her damaged personal property.

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Here is what the Second Appellate District Court wrote about California FAIR Plan insurance: “The FAIR Plan is an insurer of last resort and generally provides more limited coverage than does the standard market.” Indeed the FAIR Plan’s coverage is minimal: it insures the dwelling and its contents only it for damage from fire, lightening, and internal explosion, with “limited” coverage for smoke damage. As the court wrote, “The Plan offers no coverage for losses from theft, falling objects, weight of ice, snow, or sleet, water damage, freezing, or sudden accidental damage from artificially generated electrical current.” Plus no liability coverage.

Of course, this is the Talbot Fair Plan policy we are talking about.

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The court noted that the Talbots could have purchased a Difference in Conditions policy to add additional coverage to cover such items as theft, water damage, and liability. I do not believe a Difference in Conditions policy can increase Fair Plan policy limits, but check me on that.

In my case, I can say that I was forced, or maybe a better word is able, to buy additional fire coverage for our home from Lloyds of London – for a pretty penny.

WEXLER SUES CALIFORNIA FAIR PLAN ASSOCIATION

Wexler Talbot sued under her parents’ policy claiming she should recover for damage to her personal property in her parents’ house.

The Court of Appeal denied her claim saying she was not on the policy nor a named insured. However the court said her parents could recover for any damage to her personal property as the policy allowed coverage for damage to personal property owned by “members of the insureds family residing with the insured.”

When I read the Opinion, I wondered why Wexler bothered to sue if her parents could recover on her behalf.

The dissent answered that question – I think.

DISSENTING OPINION

The dissenting judge disagreed with the majority, writing: “If your family member’s (Wexler) personal property is damaged, you (Talbots) will not be able to recover for that damage because you do not have an ownership interest in that property. Your family member (Wexler) will not be able to recover because the insurance company, which did not request or require you to identify the family member by name, will be able to deny coverage because you (Talbots) did not identify the family member by name. The insurance company gets to keep your premiums, which is a pretty sweet deal for the insurer but not for you or your family member.”

So, I am thoroughly confused. The majority writes the Talbots may recover under their policy for their daughter Wexler’s damaged personal property while the dissent seems to say neither the Talbots nor their daughter Wexler may recover.

Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee and Tahoe City, California, and Reno, Nevada. Jim’s practice areas include: real estate, development, construction, business, HOAs, contracts, personal injury, accidents, mediation and other transactional matters. He may be reached at porter@portersimon.com or http://www.portersimon.com.