unitedpolicyholders

1. SoCal 2007 WildfireRoadmap to Recovery:Legal Issues & Scopes of LossDecember 12, 2007Rancho Bernardo Community Presbyterian Church www.unitedpolicyholders.org

2. Disclaimer: • The information provided here is intended for general educational purposes and should not be construed as legal advice. • Today’s speakers are invited speakers volunteering their time as educators. • Neither United Policyholders nor the Rancho Bernardo Community Presbyterian Church endorse or warrant the presentations or services of any volunteer speakers.

3. Underinsurance 101 • If the dollar limits in your policy will not cover the cost of putting you back where you were before a loss, you are underinsured. • As many as 90% of those who suffered loss in Firestorm 2007 may be underinsured in one or more categories (dwelling, contents, ALE, other structures, etc.) • Strategic negotiation and litigation are your two main options.

4. Underinsurance is a challenging problem and there is no “one size fits all” solution • It is such a common problem after large- scale disasters that UP has an entire section of our website devoted to the subject.    • UP’s Executive Director is in active discussions with the CA. Ins. Comm’r, private attorneys and insurer representatives to help 2007 wildfire survivors who are underinsured. • Go to the "Claims Tips“ section at www.uphelp.organd find "Underinsurance Help“

5. Your policy is a legal contract • It gives you and your insurance company rights and responsibilities • Cooperation, documentation, investigation • Do not do any of the following without first checking with an attorney who has experience representing policyholders: • Sign "releases" or waivers • Give a recorded statement • Submit to an Examination Under Oath

6. Your goal is to be effective in claim settlement negotiations • Insurance policies are contracts written by insurance company lawyers.  • Legal arguments can strengthen your negotiating position.  • Read the CA. Fair Claims Regulationsand/or consult with a lawyer to develop a strategy, and then use legal advice and arguments to convince your insurance company to change its position without getting involved in a lawsuit.

7. Pace yourself and resist being rushed or pressured • Insurers frequently extend policy deadlines and relax requirements for proofs of loss • By law you have up to 24 months of ALE (LOU) benefits • The CDI may help you get time extensions if your insurer unreasonably refuses • You may feel frustrated and powerless at times, but you are NOT. The laws that protect you give you power. • A catastrophic insurance claim can take two plus years to get fully and fairly settled

8. Create a paper trail, even if it’s not your normal “m.o.” • Confirm representations and agreements in writing despite the hassle • Use your insurance CLAIM DIARY. Record everything between you and the insurance company.  • Write short, to-the-point letters to your adjuster outlining issues that need to be resolved that are delaying settlement of your claim.  • Put reasonable deadlines in your letters telling the insurance company when you expect a reply.  (i.e., “Please respond no later than fourteen business days from the date on this letter).  • Refer to the CA. Fair Claim Settlement Practice regulations as often as they apply

9. Go up the chain of command • Write letters to your adjusters’ supervisors, their supervisors, and even the President or CEO of the insurance company.   Follow up by phone. • Read the wording of the specific exclusions or limitations that the insurance company is relying on.  • Read the whole policy and whatever brochures or sales materials you can get your hands on.  You may find words that show they promised or owe more benefits than they’re offering. 

10. Scope of Loss WHAT: Defines, describes, details “as it was” dwelling loss WHY: A foundation for settling dwelling claim HOW: Should be independent/objective • A scope of loss is not the same as an estimate • A scope of loss should allow estimates to be prepared and compared “apples to apples” • A scope of loss is the basis for an independent, credible repair/replacement estimate

11. Get independent estimates and opinions on repairs • If insurance company adjusters or contractors offer to settle based on computer-generated or “lowball” estimates, get independent estimates from qualified local builders or construction professionals and read our FAQs. • Aim for estimates that can be compared side by side with your insurers’ estimates.

12. Xactimate: Machine vs. Man • Most adjusters use Xactimate to generate dwelling loss estimates and settlement offers • Pricing often low, too generic • Estimates look good on paper but are often inaccurate • Computers don’t build houses

13. Our heartfelt thanks to: • Tonight’s speakers • UP Mentors and Sponsors • The Rancho Bernardo Community Presbyterian Church

14. Reserve slides

15. Did you know? • Under CA. law, your insurance company cannot require you to use a specific professional to repair/replace your property? Reg. 2695.9 • Under CA. law your insurance company must give you copies of estimates and other documents in your claim file? Ins. Code sec. 2071 and Reg. 2695.9 (d) • Under CA. law your insurance company must respond to your calls and letters within 15 days? Reg. 2695.5

16. Contractor scams are very common after disasters • Before you hire a contractor, check their customer references and their license status online with the Contractors State Licensing Board www.cslb.ca.gov or call: 1-800-321-CSLB (2752)

17. Six basic steps if you suspect or know that you're underinsured: • Step One:  Calculate the total scope and amount of your losses in each major category:(Dwelling, Contents, ALE, Other Structures, and Debris Removal).  If your insurer sold you a “replacement cost” policy, your total losses are what your coverage limits should have been.   • Step Two:  Remember and reconstruct as best you can the history of how your limits were set. • Step Three: Consult with previous disaster survivors and at least one experienced policyholder attorney with the goal of getting a realistic assessment of your chances of convincing your insurer to pay more than your stated policy limits.   • Step Four:Choose your words carefully. Consult with an experienced policyholder attorney before allowing your insurer to interview you, take your recorded statement or examine you under oath.  Your own words can unintentionally harm your chances of getting paid in full.  Go to "Find Help" at www.unitedpolicyholders.org as a starting point to find the right lawyer. • Step Five: Make a clear, written demand that your insurance company honor the promises it made to put you back where you were before a loss.   • Step Six:Go on record.  File a complaint with the California Department of Insurance.  Keep your complaint simple and general.  Don't go into specifics about your dealings with the agent/broker/insurance company.  Identify your company and the approximate amount of the shortfall.

18. Underinsurance RX “to do” recap: • Network with others insured with your same company • Visit “Underinsurance Help” at www.uphelp.org • Start at the “Find Help” section of www.uphelp.org to find qualified professional help • Pursue all avenues to get the insurance company to cooperate informally • If you have a strong case, use our civil justice system – it’s a cornerstone of our democratic system. • If you do not have a strong case, pursue alternatives

19. Wildfire Presentation Introduction to Gafcon

20. Competitive Bid Estimating Litigation Support Estimating

21. Preparing a Scope of Loss Estimate and Why

22. Documentation

23. Check List of Finishes for a Single Family Residence

24. Quantity Survey

25. Develop Unit Costs

26. Smith Residence Date: January 1, 2008 1234 Front Street Estimated Cost of Replacement

27. Smith Residence Date: January 1, 2008 1234 Front Street Estimated Cost of Replacement

28. General Requirements

29. Smith Residence Date: January 1, 2008 1234 Front Street Estimated Cost of Replacement

30. Overhead Profit

31. Building Plan Check and Permit Fees Architectural and Engineering Fee

32. The American Society of Professional Estimators - ASPE Forensic Expert Witness Association - FEWA Forensic Consultants Association - FCA American Association of Cost Engineers - AACE

33. Contact Maryssa Ptacnik with any questions at 619.231.6100 ext 1251 or email at mptacnik@gafcon.com SAN DIEGO  IRVINE  LOS ANGELES 701 B Street, Suite 1600  San Diego, CA 92101 www.gafcon.com