San Diego Gas & Electric Company (SDG&E), through its parent company, Sempra Energy, will likely settle the numerous 2007 California fire claims filed against it for nearly $1 billion.

Sempra Energy found responsible for three fires

The 2007 California fires were some of the worst fires in the state's history – destroying approximately 1,300 homes and causing billions of dollars in damage. News agencies have reported that both CalFire (California's Department of Forestry and Fire Protection) and California's Public Utilities Commission have determined that three of the worst fires (Witch Creek, Guejito and Rice Canyon) were caused by SDG&E's power lines malfunctioning during Santa Ana winds.

Sempra Energy, the parent company of SDG&E, has said that it will likely settle claims against it for approximately $900 million. It reportedly has $1.1 billion in insurance coverage and most of the settlement money would be distributed to insurance companies seeking to recover some of the money they paid to insureds who lost their homes, businesses and farms.

Damages that approximately 26 insurance companies have paid out are estimated at $1.5 billion – and the insurers hope to recoup some of those costs from Sempra. Plaintiffs in most of the cases against the power company are insurers, individuals who were victims of the fire and various governmental agencies. Sempra has said that Cox Communications Corporation may also pay part of the settlement, but that has yet to be confirmed.

Bad faith insurance practices

While some insurance companies do an excellent job of repairing or replacing homes after a natural disaster like the 2007 fires, others do not – because paying out claim monies means a lower bottom line. Whether or not Sempra's insurance companies will actually complete the settlement is still up in the air; however, homeowners who experience this type of behavior can file bad faith insurance ) practice lawsuits against their insurers. If your insurance company has acted in bad faith, contact an experienced fire insurance attorney to discuss your situation and evaluate your options.