San Francisco Chronicle reporters Susie Neilson and Megan Fan Munce and visual journalist Brontë Wittpenn were awarded the Barlett & Steele Award for Investigative Business Journalism on Tuesday for their reporting on the algorithm that underpins home insurance coverage in California and how it often leaves homeowners unprotected when disaster strikes.
In “A broken system is keeping California homes underinsured. Millions have no idea they’re at risk” and the complementary short documentary “The New Housing Crisis,” Neilson, Munce and Wittpenn revealed that most major insurance companies in the state knowingly set coverage limits for homeowners using bad data and calculations that routinely underestimate construction costs. Agents rarely verify the results. When a home is destroyed by a wildfire, families often learn their insurance policies won’t cover the cost to rebuild.
Named for investigative reporting team Donald Barlett and James Steele, the annual Bartlett & Steele Awards were established in 2007 to honor “incisive business reporting that ‘tells us something we don’t know.'” Winners are awarded gold, silver and bronze prizes in both Global/National and Regional/Local categories, and an award is also given for Outstanding Young Journalist. The Chronicle’s report won gold in the Regional/Local category.
The awards are administered by the Reynolds Center for Business Journalism at Arizona State University’s Walter Cronkite School of Journalism and Mass Communication.
Even before two devastating fires swept through Los Angeles this January, Neilson and Munce were investigating underinsurance. While the phenomenon is often blamed on skyrocketing construction costs after a disaster or inflation, they discovered a broken system that routinely underestimates rebuilding costs. They also found insurance companies continued setting policy limits drastically below the true cost to rebuild even after learning of the widespread problems.
In her short documentary, Wittpenn explored the effects of underinsurance through California homeowners who have lived it, including Maggie Neilson, who lost her home in the Palisades Fire, and Jennifer McKim-Hibbard and Linda and Richard Salazar, whose Grizzly Flats homes were destroyed in 2021 in the Caldor Fire.
“There is another tragic chapter in the saga of California’s destructive wildfires: the legions of people who have been burned by their insurance companies, which routinely underestimated the cost of rebuilding their incinerated homes,” said the judges. “The San Francisco Chronicle’s investigation uncovered a faulty algorithm that lowballed the rebuild cost, often by hundreds of thousands of dollars, and has consequently created a new housing crisis in which people who have done everything right are living in trailers – indefinitely.”
The impact of the Chronicle’s investigation has been swift. The California Board of Equalization held a hearing in May to consider solutions to the underinsurance crisis, and five Western states have formed a coalition to investigate the issue after years of megablazes across the West. Two new lawsuits filed in June accuse three of California’s largest insurance companies of knowingly underinsuring clients, leaving victims of the L.A. fires unable to rebuild.
“This honor is a testament to Susie’s and Megan’s relentless digging, which found what is causing systemic underinsurance and will help protect communities in the future,” said Chronicle Investigative Editor Ryan Gabrielson.
About the San Francisco Chronicle
The San Francisco Chronicle (www.sfchronicle.com) is the largest newspaper in Northern California and the second largest on the West Coast. Acquired by Hearst in 2000, the San Francisco Chronicle was founded in 1865 by Charles and Michael de Young and has been awarded six Pulitzer Prizes for journalistic excellence. Follow us on X at @SFChronicle
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