SoCal 2007 WildfireRoadmap to Recovery:Legal Issues & Scopes of LossDecember 12, 2007Rancho Bernardo Community Presbyterian Church

SoCal 2007 WildfireRoadmap to Recovery:Legal Issues & Scopes of LossDecember 12, 2007Rancho Bernardo Community Presbyterian Church

www.unitedpolicyholders.org

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.

Underinsurance 101If 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.

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.org and find "Underinsurance Help“

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:

1) Sign "releases" or waivers2) Give a recorded statement3) Submit to an Examination Under Oath

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 Regulations and/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.

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

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

Go up the chain of commandWrite 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.

Scope of LossWHAT: Defines, describes, details “as it was” dwelling lossWHY: A foundation for settling dwelling claimHOW: 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

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.

Xactimate: Machine vs. Man

Most adjusters use Xactimate to generate dwelling loss estimates and settlement offersPricing often low, too genericEstimates look good on paper but are often inaccurateComputers don’t build houses

Our heartfelt thanks to:

Tonight’s speakersUP Mentors and SponsorsThe Rancho Bernardo Community Presbyterian Church

Reserve slides

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

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.govor call: 1-800-321-CSLB (2752)

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.

Underinsurance RX “to do” recap:

Network with others insured with your same companyVisit “Underinsurance Help” at www.uphelp.orgStart at the “Find Help” section of www.uphelp.org to find qualified professional helpPursue all avenues to get the insurance company to cooperate informallyIf 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

Introduction to GafconWildfire Presentation

20

Competitive Bid Estimating

Litigation Support Estimating

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Preparing a Scope of Loss Estimate and Why

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Documentation

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Check List of Finishes for a Single Family ResidenceEXTERIOR FINISH

Did/Does the exterior of the home have any siding?

If yes, what locations?

If yes, what species or composite (Wood composite, Cementitious, redwood, cedar or spruce)?

If yes, what style of siding (Totem, tongue and grove or lap siding?

Did the exterior of the home have stucco?

If yes, what locations and dimensions per elevation?

Did/Does the exterior of the home have any veneer installed over stucco?

If yes, what type - Brick, Stone, other?

If yes, what locations?

Does the exterior of the home have any wood trim?

If yes, what widths and lengths?

If yes, is the wood trim over stucco or siding, is it around windows and doors etc?

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Quantity Survey

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Develop Unit Costs

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Smith Residence Date: January 1, 20081234 Front Street Estimated Cost of Replacement

Description QTY Unit Unit Cost Total

Wall Framing 2" x 4" Wood stud wall, exterior 2,750 SFSA $1.95 $5,363

2" x 4" Wood stud wall, interior 1,845 SFSA $1.95 $3,598

Blocking 4,595 SFSA $0.25 $1,149

1/2" CDX Sheathing with shear nailing 2,750 SF $1.30 $3,576

8" x 8" Exterior post 10 LF $15.25 $153

Subtotal-Wall Framing 2,731 SF $5.07 $13,839

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Smith Residence Date: January 1, 20081234 Front Street Estimated Cost of Replacement

Description QTY Unit Unit Cost Total

Landscaping Amendments/Top soil 2,500 SF $0.60 $1,500

Ground Cover 500 SF $1.25 $625

Sod 2,000 SF $0.70 $1,400

1 gallon trees/scrubs 1 EA $15 $15

5 gallon trees/scrubs 100 EA $30 $3,000

15 gallon trees/scrubs 4 EA $125 $500

Specimen trees, 24” box 11 EA $300 $3,300

Specimen trees, 36” box 3 EA $750 $2,250

Specimen trees, 48” box 4 EA $1,500 $6,000

Sub-Landscaping $18,590

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General Requirements

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Smith Residence Date: January 1, 20081234 Front Street Estimated Cost of Replacement

Description QTY Unit Unit Cost TotalGeneral

Requirements

Supervision Superintendent, part time 5 MO $3,250 $16,250

Safety & Fire Control

First aid locker 1 EA $75 $75

Safety equipment & supplies 5 MO $50 $250

Fire extinguishers 2 EA $150 $300

Subtotal - Safety & Fire Control $625

Temporary Utilities

Temporary electricity 5 MO $150 $750

Temporary telephone 5 MO $200 $1,000

Temporary construction water 5 MO $100 $500

Temporary Toilet 5 MO $175 $875

Temporary hand washing station 5 MO $200 $1,000

Sub-Total Temporary Utilities $4,125

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Overhead

Profit

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Building Plan Check and Permit Fees

Architectural and Engineering Fee

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The American Society of Professional Estimators - ASPE

Forensic Expert Witness Association - FEWA

Forensic Consultants Association - FCA

American Association of Cost Engineers - AACE

33www.gafcon.com

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Contact Maryssa Ptacnik with any questions at 619.231.6100 ext 1251 or email at mptacnik@gafcon.com