Underinsured Wildfire Claims: Recover Your Coverage Gap

After a devastating California wildfire destroys your home, you expect your insurance policy to cover the full cost of rebuilding. Unfortunately, many fire victims discover they are severely underinsured—meaning their insurance payout falls far short of what's needed to rebuild their home and replace their belongings. If you're facing an underinsurance gap, you have legal options to recover the difference.

At the Law Offices of Rozsa Gyene, we've spent 25+ years helping California fire victims recover compensation when insurance isn't enough. Whether through lawsuits against utility companies, bad faith insurance claims, or agent negligence claims, we fight to close your underinsurance gap.

The California Underinsurance Crisis

Underinsurance has become a widespread problem for California homeowners, especially after major wildfires like the Eaton Fire and Pacific Palisades Fire. Many victims are discovering that their insurance policy limits were set years ago and haven't kept pace with skyrocketing construction costs, inflation, and new building code requirements.

Common causes of underinsurance include:

• Outdated Policy Limits: Coverage amounts that haven't been updated as home values and construction costs increased
• Agent Negligence: Insurance agents failing to recommend adequate coverage levels
• Rising Construction Costs: Lumber, labor, and material costs have skyrocketed in recent years
• Building Code Upgrades: New fire-resistant construction requirements add hundreds of thousands to rebuild costs
• Limited Extended Replacement Cost: Policies with only 20-25% extended replacement cost when 50-100% is needed
• Policy Exclusions: Certain features like landscaping, outbuildings, or custom work may have sub-limits

In areas like Pacific Palisades, Altadena, and Malibu, rebuilding costs now exceed $1,000 per square foot—far higher than what most policies cover. This leaves victims with massive gaps between their insurance payout and actual rebuild costs.

How to Recover Your Underinsurance Gap

If you're underinsured, you're not out of options. Here are the legal avenues we use to help clients recover their coverage gaps:

1. Sue the Utility Company

If a utility company like Southern California Edison, PG&E, or LADWP caused the fire, you can sue for the full value of your losses—without insurance policy limits. Under California's inverse condemnation doctrine, utilities are strictly liable for fire damage caused by their equipment. This means you can recover:

• The full replacement cost of your home at current construction prices
• The gap between your insurance payout and actual rebuild costs
• All personal property, landscaping, and additional expenses not fully covered by insurance
• Your insurance deductible
• Emotional distress damages

For Eaton Fire victims, we're pursuing lawsuits against SCE. For Pacific Palisades Fire victims, we're suing LADWP. These lawsuits can recover the full underinsurance gap, ensuring you can rebuild your home completely.

2. Sue Your Insurance Agent or Broker

If your insurance agent or broker failed to recommend adequate coverage, you may have a professional negligence claim. Insurance professionals have a duty to:

• Assess your property's true replacement cost
• Recommend appropriate coverage limits
• Explain the risks of underinsurance
• Suggest extended replacement cost coverage
• Update your coverage as property values increase

If your agent failed to do this, they may be liable for the underinsurance gap. We can pursue agent negligence claims to recover compensation for inadequate coverage recommendations.

3. Challenge Bad Faith Insurance Practices

Sometimes, underinsurance isn't your fault—it's the result of insurance company bad faith. If your insurer:

• Undervalued your home when setting policy limits
• Failed to offer adequate extended replacement cost coverage
• Applied excessive depreciation to reduce payouts
• Misrepresented coverage limits or policy terms

You may be able to sue for bad faith and recover additional compensation, including punitive damages.

4. Maximize Your Insurance Claim

Even if you're underinsured, we can help you get every dollar available under your policy by:

• Identifying hidden coverages and endorsements you didn't know existed
• Filing supplemental claims for missed damages
• Challenging lowball appraisals and repair estimates
• Demanding extended replacement cost coverage if available
• Fighting for code upgrade coverage and ordinance or law endorsements

Our comprehensive insurance claim services ensure you receive the maximum payout your policy allows before pursuing other legal remedies.

Signs You're Underinsured

How do you know if you're underinsured? Warning signs include:

• Your insurance payout is less than what contractors estimate for rebuilding
• Your policy limits haven't been updated in 5+ years
• Your home's insured value is based on market value, not replacement cost
• You have limited or no extended replacement cost coverage
• Building code upgrades will add significant costs to rebuilding
• Your policy has low sub-limits for landscaping, outbuildings, or custom features
• You're in a high-cost area like Pacific Palisades, Malibu, or Altadena where rebuilding costs exceed $800-$1,000 per square foot

If any of these apply to you, contact us immediately for a free underinsurance gap analysis.

How We Help Underinsured Fire Victims

At the Law Offices of Rozsa Gyene, we take a comprehensive approach to closing underinsurance gaps:

• Calculate the True Gap: We work with contractors, appraisers, and engineers to determine your actual rebuild costs and coverage shortfall
• Maximize Your Insurance Recovery: We fight to get every dollar available under your current policy
• File Utility Lawsuits: We sue responsible utility companies under inverse condemnation to recover the full value of your losses
• Pursue Agent Negligence Claims: We hold insurance agents accountable for failing to recommend adequate coverage
• Challenge Bad Faith Conduct: We sue insurers who undervalued your property or misrepresented coverage
• Coordinate Multiple Claims: We manage insurance claims, utility lawsuits, and agent claims simultaneously to maximize total recovery

Don't Accept Being Underinsured

Being underinsured doesn't mean you have to settle for a partial recovery. California law provides multiple avenues to close your coverage gap. Whether through utility lawsuits, bad faith claims, or agent negligence actions, we'll fight to get you the full compensation needed to rebuild your home and your life.

If you lost your home in the Eaton Fire, Pacific Palisades Fire, or any California wildfire, and your insurance isn't enough, contact us today. We offer free consultations and work on contingency—you pay nothing unless we recover compensation for you.

Call now for a free underinsurance gap analysis: (818) 291-6217