The Palisades Fire in California was yet another stark reminder of how fast nature can change lives. Among the thousands affected was Heather Burnett, a longtime caregiver and small business owner who lost nearly everything when the flames devoured her apartment. Her only surviving possession — a Buddha statue — became a haunting symbol of both loss and resilience.
But beyond the human story lies a deeper, more systemic issue that's quietly affecting thousands of Californians: the dangerous underinsurance gap. Burnett's situation isn't unique; it reflects a growing crisis where renters and homeowners alike are discovering—too late—that their policies don't provide the protection they thought they had.
For Heather Burnett, life in Pacific Palisades was supposed to be a new beginning. After decades of running a daycare in Lafayette, she moved to the coast just four months before the fire erupted. When the sirens began wailing that fateful night, she grabbed what mattered most: her cat, Timmy, and the child in her care. There was no time to think, no time to gather belongings or documents — only survival.
When she returned, her home was gone. The walls, furniture, photos, and mementos — everything had turned to ash. Only the Buddha statue remained standing among the ruins, untouched by the inferno. To Heather, it felt like a miracle — a quiet symbol of faith amid devastation.
But her emotional loss was soon compounded by another disaster: the insurance nightmare that awaited her.
Burnett's policy, issued by Spinnaker Insurance and recommended by her apartment complex, seemed straightforward — until the fire. When Karl Susman, an insurance expert and host of The Insurance Hour, reviewed her coverage, he immediately noticed red flags.
"At first blush, I look at it, and of course, it's not written the right way," Susman explained. "They've left liability limits down to the minimum."
This is where many renters unknowingly fall into trouble. Unlike homeowners, renters often purchase basic or minimal policies—sometimes recommended by landlords or property managers—without realizing how limited those policies can be.
Renters' insurance typically covers:
Personal property (belongings)
Liability (if someone is injured in your rental)
Additional living expenses (if you're displaced)
However, what renters don't realize is how strict itemization requirements can be. To receive reimbursement, insurers often demand proof of purchase for every single item — from electronics down to clothing and kitchenware.
For someone like Burnett, who lost everything and had no chance to document her possessions, that's nearly impossible.
California's Department of Insurance (CDI) offers certain consumer protections for homeowners — such as extended replacement cost coverage and relaxed proof-of-loss requirements after major disasters.
But, as Susman points out, those same protections don't automatically apply to renters. "Unfortunately, this consumer probably is not going to get any of these protections… because that is based on homeowners insurance policies," he said.
That distinction leaves renters in a uniquely vulnerable position. Even though they pay monthly premiums, they're often left navigating the claims process alone, forced to prove ownership of destroyed items without receipts or photos.
For many victims, the result is devastating: delayed payments, reduced settlements, or outright denials.
California's high cost of living and natural disaster risk make it one of the toughest states for affordable coverage. Renters — especially those in wildfire zones — often select lower coverage limits to keep monthly costs manageable.
But here's the catch:
Low premiums = limited coverage.
No documentation = slow or denied claims.
Renter classification = fewer legal protections.
And because insurance contracts are complex, many policyholders don't fully understand what they're buying. When landlords or leasing offices "recommend" a policy, renters may assume it's comprehensive when, in reality, it may only meet the building's liability requirements — not the tenant's personal protection needs.
The Palisades Fire highlights a broader crisis that experts like Karl Susman have been warning about for years. California's insurance ecosystem is strained from every direction:
Wildfires are increasing in frequency and severity.
Insurers are reducing exposure or exiting high-risk markets.
Consumers are buying cheaper policies just to stay insured.
The combination has created a coverage gap epidemic — not just for homeowners, but for renters, small businesses, and communities in high-risk zones.
The emotional toll is compounded by the financial aftermath. Even those who survive the fires face the slow, bureaucratic burn of insurance claims, disputes, and underpayment.
For renters like Burnett, who were already underinsured, recovery can take years — or never fully come.
While the insurance industry grapples with systemic reform, individuals can take critical steps now to safeguard their futures.
Create a digital inventory of your belongings. Take photos or videos of every room, open drawers and closets, and store the files in cloud storage. It takes just 20 minutes but can make the difference between a denied and approved claim.
Read your renters or homeowners insurance carefully. Know the limits for:
Personal property
Replacement cost vs. actual cash value
Loss-of-use coverage (temporary housing)
Liability protection
If you're unsure, ask your broker or agent to explain in plain terms.
A basic renters policy might only cover $15,000 to $25,000 in belongings — far less than the value of most households. Consider upgrading coverage, especially for electronics, furniture, and sentimental items.
Scan receipts, warranty cards, or credit card statements for major purchases. Even screenshots of online orders can serve as proof of ownership.
Not all policies are created equal. Some insurers specialize in wildfire-prone regions and offer more flexible claims handling. An independent insurance broker, like the ones Karl Susman often advises consumers to consult, can help compare multiple carriers and coverage options.
Beyond insurance, there's a deeply human side to every loss. Burnett's guilt over launching a GoFundMe — feeling "luckier than others" despite losing everything — underscores the emotional complexity survivors face.
Many victims experience survivor's guilt, compounded by the frustration of slow or inadequate insurance payouts. It's a reminder that disaster recovery isn't just about rebuilding homes, but restoring dignity, stability, and trust.
California's Department of Insurance continues to explore ways to modernize regulations, particularly around disaster claims. There's growing momentum to extend certain homeowner protections to renters, including simplified proof-of-loss procedures and fairer timelines for claims processing.
Experts like Karl Susman are pushing for transparency, education, and proactive planning. "Insurance isn't just about the premium," he often says. "It's about understanding the promise behind it — and knowing how to make sure that promise holds when you need it most."
The story of Heather Burnett is both heartbreaking and instructive. It reveals the fragility of financial security in the face of disaster and the importance of truly understanding what your insurance policy covers.
Her Buddha statue may have survived the flames, but for countless Californians, the real challenge is surviving the insurance aftermath.
If you live in a high-risk area, take time today to review your policy, ask tough questions, and make sure you're not just insured — but truly protected.
