Insurance issues, permitting hassles and the Coastal Commission leave residents “tearing their hair out in frustration.”
By Melonie Magruder / Special to The Malibu Times
It has been more than a year since the Corral Canyon fire that destroyed 53 homes, and many Malibu residents are still waiting to break ground on rebuilding, awash in problems ranging from underinsured property claim adjustments to county bureaucracy with permitting processes to the iron fist of the California Coastal Commission.
Beverly Taki, Corral Canyon Safety Committee founder, whose home was spared in the fire, said many of her neighbors found that their homeowners insurance policies did not come close to covering the total losses they experienced.
“Of course, many had California FAIR plan policies that have limits,” Taki said. “After the fires of ’93, FAIR Plan covered more aspects of rebuilding, like landscaping, things that aren’t covered now.”
California FAIR Plan is described as being “the property insurer of last resort” for homeowners in high-risk areas. A syndicated association created by the California Legislature after devastating fires in 1968, the FAIR Plan offers coverage up to $1.5 million for residents unable to find fire insurance through private carriers, but is limited to structure and contents.
“The main difference we have from private policies is in coverage,” FAIR Plan spokesman Mike Harris said. “We don’t cover theft, liability or water damage. Our loss of use is limited to 10 percent of the value of the home and that is deducted from the claims payout. We recommend you get coverage for full cost of replacement and that you include building code upgrade coverage.”
Harris said that FAIR Plan has written 5 percent fewer policies in the Malibu area since 2007. This might reflect the fact that some Corral Canyon residents were having problems getting permitting plans cleared from L.A. County. Many of those homes lay outside Malibu’s boundary, so residents must apply to county offices, rather than the city, to renew permits to rebuild.
Taki said County Supervisor Zev Yaroslavsky has been instrumental in clearing red tape for several residents and that the county had been “very accommodating,” but some have still encountered obstacles.
Lois Lyons and husband Christopher Hudson lost their home in the El Nido area. Fortunately, their insurance policy covered all their losses and their builder is ready to start construction, but they still await county permits. “People are tearing their hair out in frustration,” Lyons said. “We wanted to go with our original foundation, which was undamaged. But we can’t get anyone at the county to sign off on our foundation so we can get permitting for everything else. Deep down inside, I think they don’t want anyone to rebuild up here.”
Cheryl Ann Reynolds, who lost her home but now has two-thirds of the construction completed on her new one is as frustrated with the process. Reynolds said her progress is unique in the neighborhood and that no other new home is so far along in the rebuilding process. “We got no help from the government,” Reynolds said. “The California FAIR Plan was a nightmare form the beginning. We got nothing from FEMA. It was paperwork and more paperwork. Appeal after appeal. We gave up and concentrated on building our home.”
Reynolds said she believes an early start with the permit process in December resulted in the place she is today. That process alone, however, took eight months.
Susan Nissman, Yaroslavsky’s field deputy, said that after last year’s fire, the county set up a “one-stop center” to help expedite permits for rebuilds.
“This was designed to clear permits with four different agencies: Building and Safety, Public Health, the Fire Department and Regional Planning,” Nissman said. “With four agencies to consider, it’s a balancing act to expedite applications and we try to find compromises when a homeowner’s plan doesn’t meet one agency’s standards. But our goal is a two-week turn around, including design resubmittals, for permit applications.”
Nissman said that if someone is “stuck” in the permitting process, they should call the supervisor’s office.
“We treat each case individually,” she said. “We want to help facilitate everyone’s rebuild to all new standards.”
Coastal roadblock
Taki said some residents had run into complications with the California Coastal Commission. “Right after the fire, the Coastal Commission made a point of saying they would expedite all permitting requests,” Taki said. “The fact is nobody has been expedited.”
Jennifer Grossman ran up against that agency when she applied for permits to rebuild her 3,000 square foot home, as approved in county records.
The Coastal Commission, however, found that her property had originally been approved in 1989 for permits on an 1,847 square foot house. Though Grossman had been paying taxes, like previous owners, on the larger property, the CCC refused permits to rebuild to greater scale.
“Under the Coastal Act, people can apply for exemptions to rebuild what has already been legally permitted and those are usually expedited pretty quickly,” CCC District Manager Steve Hudson said. “If they want to expand, they can, but they need to submit a coastal permit application and it goes through a public hearing.”
Grossman is still frustrated.
“Zev Yaroslavsky’s office bent over backwards to help, but the Coastal Commission says, ‘Our hands are tied,'” she said. “Governor Schwarzenegger stood on my property after the fire and told me ‘We’ll do everything we can to help.’ Well, now’s the time for him to help. I just want to rebuild the house I lived in and lost.”
Phil Gajic, a policy writer for Mark Ball Insurance in Malibu, said that one of homeowners’ biggest concerns in a rebuild is building code upgrades, which can change every five years. Codes were last upgraded January of this year. “Most policies provide for a 10 percent increase in bringing homes up to code,” Gajic said. “We also recommend you look at your policy every year to make sure you cover any differences in condition. No matter what carrier you go with, you’re looking at least $200 per-square-foot to rebuild and, in Malibu, that can get closer to $300 per-square-foot.”
All industry experts consulted emphasized that insuring to replacement cost is up to the homeowner and that rising supply and transportation costs are significant factors in determining overall outlay. They recommend that homeowners consult with their insurance agents every year to reassess replacement value and insure accordingly.
Like Harris and Nissman, Gajic recommended that homeowners thoroughly catalogue their property inside and out.
“Take photos or video all aspects of the property and keep receipts,” Gajic said. “And if you have valuables like antiques or jewelry, you need a separate rider.”
For those ready to rebuild, local contractors recommend fire zone materials. John Johannesan, who recently built Barbra Streisand’s home, was adamant on that point.
“Don’t use wood,” Johannesan emphasized. “There are a lot of cement based products that you can use for siding, fascia or under the eaves. Go with tile roofs. And insulation is a big factor. You can fill up attic spaces with a Polyurethane foam that doesn’t allow burning embers to get inside.”