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Open House

California Wildfires; Insurance Controversy; Home Protection

Aired October 27, 2007 - 09:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

GERRI WILLIS, HOST: Hello, and welcome to a special edition of OPEN HOUSE. We're coming to you from Rancho Bernardo, California, where we've been all week covering some of the worst wildfires in California's history. You can see the devastation behind me.
As of this date, 1,800 homes have been demolished, as much as $2 billion in damage, that according to the California Insurance Commissioner's Office. Nine fires still raging. We saw smoke today driving in here.

And this isn't just a California story. In fact, more than half of you don't have enough insurance if something like this happens to your home. You won't be able to rebuild. We'll be talking about that problem in this show, today. As well as new technologies that would help you save your home.

But first, a tale of two neighbors who came home to find very different situations.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): Two families, two stories. One whose house still stands, another whose house is burned to the ground.

(on camera): So, are you surprised to see everything intact here?

PEPPY ALTASHULA, CALIFORNIA RESIDENT: Yeah.

CAROLINE ALTASHULA, CALIFORNIA RESIDENT: Yeah, absolutely.

WILLIS: You've got to be happy.

(voice-over): Caroline and Peppy Altashula (ph) snuck in the early morning hours, anxious to see their house.

(on camera): How relieved are you?

C. ALTASHULA: A lot. I think we can come and live here probably very soon.

WILLIS (voice-over): The couple is renting this house. Amazing for one family, but next door, Martha and Tyrone Gilmore finally were allowed to see their home only two days later.

(on camera): Yeah, it's OK. It's OK. That's awesome. It looks like you've got your documents. (voice-over): Martha out her frustration on the family's safe, trying to find their most important documents, trying to find something that wasn't destroyed. All that's left, memories.

MARTHA GILMORE, LOST HOME IN FIRE: I gave him a surprise birthday party two weeks ago. His 50th and some 60 people here and, you know, we had a really good time. But I didn't even consider that being the last party in this house. So, it's kind of hard.

WILLIS: Especially hard because the house next door is untouched.

M. GILMORE: That's unbelievable. I told her, I thought maybe, you know, if our house is gone, yours is probably gone, but it's still standing. It's just totally amazing.

WILLIS: Even now, the first day back, the family is looking ahead.

M. GILMORE: They came through this morning to all the houses here that were down and, you know, just basically said, you can't -- the property is uninhabitable, so this'll help you start your process.

WILLIS: The Gilmore's believe insurance will help them rebuild and Tyrone says he can almost see a neighborly blessing in the disaster.

TYRONE GILMORE, LOST HOME IN FIRE: For them, I already know that they didn't have any renter's insurance. So, if their house would have went, they would have been at a loss. The homeowner would have been OK, but the people inside, they would have been in worse position than I am.

(END VIDEOTAPE)

WILLIS: So I have got Richard Joseph here with me today. He's one of the victims of these fires. And as you can see, his home's completely demolished. Richard, start to tell me just a little bit about what happened. You woke up in the middle of the night to really a wall of fire.

RICHARD JOSEPH, LOST HOME IN FIRE: Certainly. So, on Sunday night, I had been up all evening watching the news on the fires. And so I went asleep about 3:30 completely exhausted because I had no sleep. And sometime after 4:00 I got the two ring-ring call from the reverse 911.

WILLIS: The reverse 911. Let's walk into what was your house.

JOSEPH: You got it. So, you just picture how it is.

WILLIS: So you would have been in what room?

JOSEPH: I normally would have been in my bedroom, but I was sleeping right here. So, I was watching on my couch. This previously was my couch. And so I was watching the television. So right after 4:00, I heard that double ring. I knew exactly what it was, although previous to that night, I had never even heard of a reverse 911 call.

WILLIS: Now, you went to the back of your house. Let's move over here so that we can get a clearer view of this. You went back here to the back of your house.

JOSEPH: As soon as I heard the call, I ran to the back, and I screamed for my daughter and my wife to get up. And as soon as I opened the curtains, everything was already on fire and in flames, so there was an inferno outside.

WILLIS: Did you know that you had to evacuate, that your house was going to be lost?

JOSEPH: Immediately. In fact, I thought it was possibly too late. I was afraid that the whole house was already encompassed. So I...

WILLIS: You were afraid you were going to lose your family.

JOSEPH: True. So I knew I had just a minute or two to get out. So, I grabbed my daughter, Sicily, and my wife and we immediately left. And as soon as I opened the door, all I saw was just like lava in the middle of the air just completely filled.

WILLIS: That's so scary. But, I want you to tell folks, because I think this is an interesting part of your story. You are eager to rebuild here. You don't -- you've got the t-shirt.

JOSEPH: Absolutely. You know, this is my home. My house did burn down, but this is my home and so all of the neighbors the next day, as soon as we found out that the houses were burned, we were in contact with each other and made a pact that we're all going to build up together because this is an incredible community and a wonderful neighborhood. And you come back a year from now and you'll be impressed with what you see.

WILLIS: Well, Richard, we appreciate the invitation and definitely want to come back in a year. Thank you so much for telling your story.

JOSEPH: Thank you. Appreciate it.

WILLIS: Coming up, we're going to have more on the insurance controversy. We'll also be telling you about techniques for protecting your house from fire. Stay with us.

(BEGIN VIDEOTAPE)

WILLIS: Whether or not you live in an area that is affected by wildfires you should have a home inventory guide. Listing all of your possessions in the event of a disaster or burglary can be difficult. To guarantee that your family returns to live as usual quickly by keeping an up-to-date list of the contents of your house.

Update your guide regularly, including serial numbers for new electronics. Be sure to make copies of your inventory and store these in safe, easily accessible places. For more information creating your own home inventory guide, head to insurance.ca.gov.

That's your "Tip of the Day."

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WILLIS: Welcome back to a special edition of OPEN HOUSE. You know, as many people come back to these neighborhoods, they are going to be trying to put their lives back together, but they're also going to be trying to find out if they have enough insurance coverage. The insurance controversy is heating up. As a matter of fact in July, Allstate decided they would write no more new policies in California. It's going to be interesting to see whether these insurance companies decide to continue writing after the disaster.

Chris Lawrence has details about the controversy.

(BEGIN VIDEOTAPE)

CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): At least 5,000 insurance claims have already been submitted in southern California and the fires are still burning.

UNIDENTIFIED MALE: We got the whole block gone.

LAWRENCE: Families coming back to these neighborhoods could be in for a second shock from their insurer. If recent fires are any indication, some of their premiums will double when the home is rebuilt. Insurers are also ordering homeowners to clear brush, cut down trees, even install fire-proof roofs. The improvements can cost up to $20,000 with no guarantee their policies won't be canceled.

SHARMILA BRUSHAN, CALIFORNIA HOMEOWNER: Right behind our house, we have cleared everything. I even put some irrigation and plants.

LAWRENCE: Even with sprinklers and other safety features, Sharmila Brushan says she's been threaten with cancellation and charged exorbitant rates for her home at the bottom of a hill.

BRUSHAN: Basically, they just don't want to take any risk, at that's what insurance is is for, to manage your risk.

LAWRENCE: Managing that risk can be profitable. State Farm and Allstate each made $5 billion in profit last year.

DOUGLAS HELLER, FOUNDATION FOR TAXPAYER & CONSUMER RIGHTS: The insurance industry is looking at American consumers sort of like they look at a casino. We just hit three blackjacks in a row, let's take our chips off the table and leave.

LAWRENCE: Consumer advocate, Doug Heller, says the company's message is clear.

HELLER: We're going to force you to spend more money to comply with our new fangled policy rules and if you don't spend that money, we're dropping you.

LAWRENCE: Allstate has stopped accepting new clients anywhere in California. The company says costs have skyrocketed and Allstate has to ensure it's got enough money to help nearly on million Californians who already have an Allstate policy.

Insurers are asking, how can we keep rebuilding entire neighborhoods when firefighters tell us they will eventually burn?

CANDYSEE MILLER, INSURANCE INFO NETWORK: He looked at Scripps Ranch and said, I fought that same fire 20 years ago. And there's another firefighter who's probably going to fight it probably 20 years from now. So, it really begs the question, are we building in safe areas?

LAWRENCE: Shamila Brushan says her home in Scripps Ranch is safe. Insurers see what that same property looked like after the fire four years ago and aren't so sure.

(on camera): And her house is one of many, more than half the homes in California are technically in wildfire red zones. That's why state senator is calling on California's insurance commissioner to enact emergency regulations that would all but guarantee reasonable insurance coverage for all of the people affected by these fires.

Chris Lawrence, CNN, Escondido, California.

(END VIDEOTAPE)

WILLIS: Andy Barile is a 40-year veteran of the insurance industry and he's joining us today to talk about the insurance industry and its response to these wildfires.

But also, you were almost a victim of these wildfires. You had to evacuate your home, correct?

ANDREW BARILE, INSURANCE CONSULTANT: Yes. We received a call from the sheriff at the Rancho Santa Fe about 8:00 in the morning, Monday morning, to evacuate.

WILLIS: What was that like? You are used to dealing with people on the other side of the table, but now you potentially were one of those folks who might lose their home.

BARILE: Yeah, actually you just grab garbage bags and, you know...

WILLIS: Did you grab your insurance policy?

BARILE: No, actually, I didn't. I knew it was in the computer. So, I didn't think about that. I think, passports and bank statements, your favorite suit, things like that.

WILLIS: Exactly. But in the end, you were lucky enough that you didn't lose your house. What did that feel like coming home and actually seeing your house? BARILE: Well, I think it's always -- it's an amazing concept when you ride down the street and see your house is still there and other people have lost their homes, so it's a tough thing to take, no matter who you are in the business.

WILLIS: Right. Well, let's talk about the business for just a second. You know, there are lots of questions today about whether people are going to be made whole. Will they be able to rebuild their homes at the levels they had? And of course in the last wildfire, we found that people were just underinsured. They didn't have enough money to rebuild. Why is that? Is it that agents aren't telling people how much coverage they need?

BARILE: Well, the agents try. I mean, but they are basically running into a problem with the carriers may not want to increase the values in a particular area because of the catastrophe exposure, so they...

WILLIS: Now, repeat that. So you're saying that the major insurers may decide that they don't want to have that big of a risk, so they don't underwrite the full value.

BARILE: They don't underwrite the full value or the agent then has to go to another carrier that's looking at writing our higher valued homes. I mean, we've had a tremendous value increase in the 10 years I've lived here and so you have to worry about the value of your house.

WILLIS: Well, let's talk about it. You've been through a lot of these cycles, a lot of these catastrophes. Will we see premiums rise? Will people be paying more for insurance in the wake of this?

BARILE: Yes, after every catastrophe, my experience historical has always been that the prices will definitely go up.

WILLIS: Wow. How much? A lot?

BARILE: Well, it's hard to say. I mean, the financial impact will -- I would say 10 to 15 percent, but don't forget, we have regulations here in California which control the pricing of a homeowner's policy.

WILLIS: So, there are some caps.

BARILE: There is caps. The insurance commissioner will probably be actively involved looking at refilling increases.

WILLIS: If you could give one piece of advice to people who are trying to put their lives back together, looking at their insurance policy, what would it be?

BARILE: Don't rush. Try to do it very methodically. It's an event, it's not -- it's a process. Do it very carefully. Don't sign anything so quickly, make sure you discuss it with a number of people that are involved with the value of your house and how they determine value and things like that. WILLIS: Take your time in other words?

BARILE: Exactly right.

WILLIS: Andy, thank you so much for being with us today. I really appreciate it.

BARILE: Thank you very much.

WILLIS: Coming up, we'll be talking about how to protect your house. What you can do to save your home. Stay with us.

(COMMERCIAL BREAK)

WILLIS: Welcome back. A new technology may allow you to save your home from fire. It's a gel made of canola oil.

(BEGIN VIDEOTAPE)

WILLIS: So, Pat, how does this product work? It's kind of gross, I got to tell you.

PAT COBURN, OWNER, FIRE BLOCK SYSTEM: Yeah, it looks pretty bad, but it will protect your home. It's actually millions of layers of tiny water bubbles.

WILLIS: Water bubbles?

COBURN: Water bubbles. And as the heat approaches it, it burns those water bubbles off and it takes a couple of hours to burn through. So, if you have a hot fire, say 2,000 degrees, sitting on top of it for an hour or so, it will keep that heat out of the house and from catching the wood on fire.

WILLIS: OK, I mean, come on. If every house in the neighborhood is on fire, am I going to be able to save my house by just spraying on this goo?

COBURN: If it's sprayed on correctly, yes you will.

WILLIS: And that's how you get it on, is you spray it on.

COBURN: You spray it on. It mixes with the water. It has a special nozzle that mixes the material with the water, the barricade gel and...

WILLIS: Like a big hose.

COBURN: Yes, we use an inch and a half professional firefighting hose. Richard, the owner here has a system, there, that we sold him here which is a pump and Davey Darley fire pump and an engine, water tank and that's how we apply it.

WILLIS: How do we get it off, though? I don't what this stuff on my house all time. COBURN: You take a high pressure nozzle, which is included with our system and you use just plain water, hose it from top to bottom. Hose all this gel down on to the ground and it will...

WILLIS: It will kill my vegetation, right?

COBURN: No, it's completely nontoxic, won't hurt your plants or animals or yourself. You have it all over your hands. And a week or so later, it'll be gone. And you will wonder where it went, but it won't hurt...

WILLIS: And it will have saved your house.

COBURN: It will have saved your house. That's correct.

(END VIDEOTAPE)

WILLIS: All right. Pretty great stuff, huh? Well, there's still questions about this technology. No. 1, the price. It costs $7,000 to apply this to a house, a two-story house. So the cost right now a little prohibitive, but we'll be following this to find out if it becomes less expensive and maybe a little more usable to most folks.

Now we're going to turn to other ways to protect your house. Pat Durland from the Federal Alliance for Home Safety is with me. We're going to talk about different things you can do to your house to keep fire from consuming it.

Pat, you say that homeowners really have a fighting chance.

PAT DURLAND, FED ALLIANCE OF HOME SAFETY: Homeowners can make a big difference, Gerri. As a matter of fact, wildfire apparel is probably the most easiest one to mitigate yourself from and protect your family because it's a process of combustion.

WILLIS: So let's start by talking about the landscaping here and what you can do to make sure that fire doesn't creep up on your house. Now, this is an interesting yard because what we've got -- we've got a ton of gravel here that obviously, a fire couldn't get through.

DURLAND: This is -- the lady has done a good job because this is a fire resistant home ignition zone. Embers landing on this will go out, flames can't reach her house. She's clean around the house, her bushes are well maintained.

WILLIS: I notice these trees have really been trimmed back. They're away from the house, right.

DURLAND: They are separated so fire can't leap from one to the other and that's why they're still here.

WILLIS: Which is the worst case scenario, right?

DURLAND: Exactly. The roof is the other key because embers, first thing that's going to happen is embers are going to land everywhere and your roof has got to be able to resist that ignition.

WILLIS: And that, of course, was a problem probably, probably in this neighborhood, right? The embers fly from one house to another, they land on your roof and if it's made out of the wrong thing, well, you're out of luck. Let's see some of these materials that you brought us today. You've got some interesting stuff here.

DURLAND: A lot of noncombustible roof in this area, are this tile, but what people forget sometimes is, as birds will come in the end and build a nest and the embers will follow and it burns from the inside out.

WILLIS: Well, you know, what's interesting about this is, this is going to sit on your roof like this. You are saying add this in so a little bird can't nest there and cause a real fire. OK. What else do you got?

DURLAND: So, we're talking about openings, now. Not only is it the roof, it's the openings and these are vent screenings, OK? This one is vinyl and this one is metal. Embers -- embers won't get to this, heat will damage this. It may fall off your house. Embers may burn a hole into it.

WILLIS: And so this is going to cover what on your house?

DURLAND: This is going to cover a crawl space areas or venting to a roof. So if you have openings to your house you have to keep the embers out and you have to use metal.

WILLIS: We've got one more thing here.

DURLAND: This is another -- and this is what this lady has on her house. This is a pretty cheap composite fiberglass shingle and it does a great job. I mean, this is about as cheap as you can get.

WILLIS: This is fire resistant and doesn't cost a lot of money.

DURLAND: Yes, you want class A, class B or class C rated materials, Gerri.

WILLIS: Class A, B or C rated materials. I want to show people, Pat, there's an interesting, on this house, you can see where the house next door is completely gone and the roof here started to burn. And you can see that there's damage there, but it didn't. Why not?

DURLAND: Well, it takes a lot of energy to ignite a house. And this was getting heat energy from the house next to it. It ignited that, but when that heat source started dying down and that house burned down, it went out on its own. It just couldn't sustain the process. And it is a process of combustion and when we use the science and that's why we do these investigations with a flash so we can share this information and people understand how to do it themselves.

WILLIS: Now you told me yesterday you were talking about how hot these fires get. Tell us a little bit about that so that people can understand the tenacity, the power of these fires.

DURLAND: The flames are like 1,000 degrees Celsius. So what you want to do is you want to keep flames from touching your house. And you want to keep embers away and that's what has happened here. There is really no path of fuel for the flames to reach the house. And that made a huge difference in this case, Gerri.

WILLIS: All right. Well, Pat, I appreciate your help. We're going to come back to you in just a few minutes to wrap this up, get a few more great tips from you. And we'll tell you more, some final thoughts on what's going on here in Rancho Bernardo and what you can do to protect yourself.

(COMMERCIAL BREAK)

WILLIS: I'd like to thank all of the guests we had today who made their way into these neighborhoods. It's still a little treacherous, here. We still saw smoke today, even now, days after the fire. So, thanks to them for coming and joining us.

You know, we've been here in these neighborhoods for four days and I'm almost reluctant to leave. We've met so many great people along the way; terrific families that we want to follow their stories over time. I know you'll want to learn more from them about how they fight back, how they rebuild and reclaim their lives, really.

And just a reminder, you can take control of this. You can reduce the possibility that your house will be consumed by fire by finding -- by doing special things that we've described here in the show today and be sure to check that insurance policy. CNN is next.

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