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For Maui Wildfire survivors, settlement of the lawsuit provides a degree of certainty and closure. With the lawsuit behind them, survivors can begin the long process of rebuilding and recovering without the specter of a long legal battle against them.
Many wildfire survivors reached an agreement with the utility companies, government entities, and private landowners. They are ready to move on. To begin the long slow process of rebuilding their homes, their community and their lives. All in the shadow of mind-numbing losses.
There is no amount of money that will make the survivors of the Maui Wildfire whole.
Not only were most survivors significantly underinsured by the insurance companies, they are still trying to get full payouts for their claims from them. Survivors need every cent they are able to get to rebuild.
And let me ask you to close your eyes for a minute. Imagine smoke and wildfire chasing you from your home. Right on your heels. Imagine you are Nelda Pagdilao with her husband of 49 years. Imagine trying to help in to safety, but not having the strength to do so. Imagine him begging you to leave for the sake of their children, grandchildren. Imaging him begging you to save yourself. Imagine barely making it over the seawall as you know, behind you, your husband is dying in the fire.
Then ask yourself, "is there any amount of money that will erase that day from your memory?" There is not.
Ms. Padilao's experience stands out, but each survivor I have met has a story that will bring you to your knees.
Insurance companies only paid for property loss. They did not pay for death of family members' loved ones. Insurance companies did not pay for severe burns and lung damage. Insurance companies did not pay for severe emotional distress.
Insurance companies are not fully paying for survivors' loss of use of their property while they continue to pay mortgages. In fact, many survivors are facing the loss of housing as insurance companies are only covering loss of use for one year. That one year is up August 8.
Now the "good neighbor" company, the "you're in good hands" company and "first in line" company, among others have shoved their way to the survivor's table. They want a piece of the reported $4 billion settlement wildfire survivors are considering. In fact, they want half. Without any consideration for whether survivors are fully compensated for their losses.
The money available to settle the claims related to the Maui wildfire is limited. The insurance companies' insistence on getting paid first is unconscionable. It's not like they need the money. State Farm paid its CEO $25 million dollars in 2022. In 2023, it reported $3.5 billion in profits increasing its net worth to $134.8 billion.
Allstate paid its CEO $15 million dollars in 2022. For year end 2023 it reported a gross profit of $14,953 billion.
They are in the business of insuring against such losses from fire. They get paid a premium each month for doing so. They enjoyed the benefit from the bargain, and now that they have to pay out against a loss, they want more.
A similar scenario played out in 2017 and 2018 in California's North Bay and Camp Fires. Just like the insurance companies in the Maui Wildfire lawsuits, the insurance companies sued PG&E wanting repayment for the claims they paid out to their policyholders.
We need to ensure what happened in the Camp Fire and North Bay Wildfires does not happen here on Maui.
In the Camp Fire and the North Bay Wildfires lawsuits against PG&E (California's utility company) the insurance companies' repayment (subrogation) claims had a significant impact on the settlements received by wildfire survivors. The $13.5 billion allocated to insurance companies meant a substantial portion of PG&E's funds was directed towards reimbursing insurers for the claims they had paid out to policyholders instead of to the policyholders themselves.
The complexity of managing both individual claims and subrogation claims contributed to delays in the payment of funds to survivors. Many survivors experienced prolonged waits for their full settlements, as the process of resolving subrogation claims and distributing the remaining funds took time--adding to the trauma survivors had already experienced.
The involvement of insurance added to the legal and administrative costs of the overall settlement process. These costs indirectly affect the net amount available for survivors, as they are part of the overall expenses that need to be covered.
Overall, while the subrogation claims ensured that insurance companies were reimbursed for their payouts, they also added complexity and potential delays to the settlement process for individual wildfire survivor.
Maui Wildfire survivors deserve better from insurance companies. The insurance companies have an opportunity to do the right thing here. They have an opportunity to be the good neighbor they told us they were. They have an opportunity to hold a community in its good hands instead of reaching into its pockets. Having enjoyed years of profitable business in Hawaii, all the insurance companies need to absorb the losses. They are in a much better position to do so than the survivor who are relying on this settlement to move on with their lives.
Sherry Peterson
Kula