LA fire victims sue State Farm as work to rebuild their homes comes to a standstill

ALTADENA, Calif. (KABC) -- Next week will mark nine months since the Los Angeles wildfires destroyed 16,000 homes and properties.

Many of those homeowners who were insured thought their policies would help them get back on their feet and back into the homes they owned.

In Part 1 of this special series, 7 On Your Side Investigates is heading back to the Eaton burn zone where many say they are now feeling burned by their insurance company.

During the Eaton Fire, Jesse Albert saw the biggest investment of his life go up in flames.

"This was supposed to be, you know, our final home, and now it's gone ... completely gone," he said.

Many of those homeowners who were insured thought their policies would help them get back on their feet and back into the homes they owned.

Today, Albert's lot has been scraped clean with a little more than some pool chairs and a cast iron pot remaining. He can't break ground on a new home there because he's not sure if he can afford it. He also said he didn't know he was underinsured before the fire.

Albert along with other fire victims are suing their insurer State Farm.

In this lawsuit, they accuse the insurance giant of "suppressing home reconstruction cost estimates ... which in turn induced customers to accept lower coverage limits."

"They've offered about $1.1 million after the policy cap and the deductible," said Albert.

But $1.1 million won't come close to covering a $3.1 million estimate Albert received from a contractor to rebuild his home. He emailed his insurance agent last year and asked if he had enough coverage and was told, "Yes, it's covered adequately."

"I go so far as to say that that's reprehensible," said Albert.

State Farm told Eyewitness News that, "regarding the lawsuit's allegations, they are inconsistent with our mission of serving our customers and helping them recover from the unexpected ... we are committed to providing our customers with all the benefits they're entitled to by their policy."

"They, in fact, forced me to sue them to get what to due us," said Albert.

While thousands of homes burned down in Altadena, there are also homes that were damaged but are still standing. But because of a battle with an insurance company, the insides are like time capsules.

"The dishes are still in the sink and the pan is still on the stove. It's just crazy," said Marcie Habell, who told 7 On Your Side Investigates that everything in her kitchen is exactly where she left it on January 7th.

And because windows were busted during the blaze, she said everything inside needs to be replaced, but Habell said she's at a standstill with her insurer Stillwater.

When asked if Habell is being lowballed by Stillwater, her attorney Joe Brent said "that would be an understatement."

"So she went out and hired a qualified tester," he added.

That tester recommended "a full teardown ... down to the studs, or a phased approach to remediation."

But Brent and Habell said they're now hearing crickets when it comes to Stillwater.

"The insurance company hired a law firm and that law firm has stopped communicating with us as of early August," said Brent.

"It feels like the fire was just the beginning," said Habell. "The insurance company is just extending the trauma every single day."

Habell and her attorney say they will now likely file suit against Stillwater.

7 On Your Side Investigates has sent several messages to Stillwater, but has not received a response.

California has a Department of Insurance to protect consumers, so what does Sacramento have to say about these complaints from the burn scars?

The Department of Insurance has an investigation into how both State Farm as well as the California Fair Plan are handling claims from L.A. fire victims.

In Part 2, 7 On Your Side Investigates is heading to the Pacific Palisades where many homeowners with Fair Plan coverage say they're at a standstill, too.