Friday, February 22, 2019

Homeowner's Insurance in California: Legal Rights (Part-2)

You find in this post a continuation of an overview of a few more California laws that protect the interests of policyholders.


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Living expenses

In cases where a claim is filed in a situation that the state has declared to be a ‘disaster’, an insurer must provide at least 24 months of Additional Living Expenses (ALE) benefits; this is subject to the limits provided for in the insurance policy. If you come to know what your ALE entitlements are, the insurer is bound to give you a list of items and expenses covered, whenever you ask for it.


In most cases, an advance ALE payment is released immediately after the calamity to help policyholders to recover, and find some strength to reestablish themselves. Further payments are released as and when expenses are incurred.


Fair claim settlement


An insurer cannot force a policyholder to accept a settlement that is unreasonably low or in violation of the terms and conditions of the insurance policy. Subject to policy limits, the settlement must provide for the restoration of the property to the condition it was in before the loss. Workmanship and materials should be of the same quality as before.


For example, if the home had had previously marble counters, the insurer cannot replace them by laminates. Furthermore, the insurer cannot demand that any specified contractor, company or individual do the repairs to the property. All that the insurer may do is to provide referrals, if the policyholder requires them.


Depreciation


The insurer cannot reduce payments/settlements you are entitled to under the terms of the insurance policy; they cannot unilaterally depreciate things that normally would not be replaced during the life of the structure, such as the foundation or the framing, etc.


Should any dispute arise about any depreciation calculation, you have the right to ask the insurer to spell out clearly how the depreciation was calculated; this must be given to you as you can study how it has affected the settlement offer.


Examination under oath

The insurer may ask you to be examined under oath about a claim you have filed. If that happens, the questions asked should be relevant to the processing of your claim; you are entitled to receive a transcript or recording of the examination.


You can then provide clarifications or rectifications of any answers you had given under oath. You can also ask the insurance company to give you a copy of the questions before the examination, but they are not bound to supply this.


Complaints against the insurer


Should you desire to file a complaint with the California Department of Insurance, the insurance company cannot retaliate against you in anyway, withhold your payments, intimidate, or threaten you in a bid to prevent you from filing the complaint. Moreover, the company cannot advise you against consulting an attorney or obtaining legal advice in relation to your claim.


To access a copy of these laws and regulations, visit the California Department of Insurance website using this link: http://www.insurance.ca.gov/0250-insurers/0300-insurers/0200-bulletins/bulletin-notices-commiss-opinion/upload/2007NewLawsNoticeCAWildfires-2.pdf



With the right insurance broker at your side, the problems you may face in filing a claim will be minimized largely; the broker will ensure that all matters are resolved quickly and fairly to your satisfaction.

Homeowner’s Insurance in California: Legal Rights (Part-1)

California has enacted more laws to protect the rights of insurance policyholders than any other state in the country. While this is undoubtedly a good thing, the downside is the complex and voluminous documentation that covers these laws. Most people cannot but shy away from going through the entire volume. In fact, many people in the insurance industry, including claim adjusters, do not have complete knowledge of them. 
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Consequently, through no fault of their own, and with no attempt on the part of the insurance companies to help out, claimants in California face many problems. Often they do not receive the full payment due to them, or the payment is inexplicably delayed. Good knowledge of your rights can help you receive fair treatment from insurance companies. A few of your crucial legal rights are listed below for your benefit.

Good faith settlements

The insurer must act in good faith and must attempt to “effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear.” Moreover, the insurer cannot settle a claim “for less than the amount to which a reasonable person would have believed he or she was entitled by reference to written or printed advertising material accompanying or made part of the application.” In addition, depreciation/actual cash value holdbacks must be reasonable and not excessive.

Clear prompt communications

Your insurer must respond to all your questions and other communications within “15 calendar days”, and there must be “a complete response based on the facts then known.” The insurer is also duty bound to inform you about all deadlines that may apply to a claim you file, including any deadline that may exist for filing a lawsuit against it.

To ensure that you receive the service you are entitled to, it is best to communicate with the insurer, on important matters, by letter or email so that there is a record of who said what and when.

Fair claims process

The processing of a claim must be transparent and fair. You have the right to see all documents the insurer may have or create relating to a claim you have filed, including any that affect the valuation process. In other words, you have the right to see all valuations, reports, photographs, material estimates, content and construction depreciation schedules and so on.

On request, the insurer must supply you with copies of all these documents for your perusal and review. What you are not entitled to are attorney-client communications and work products, which are privileged.

Fair investigation

An insurer is bound to gather whatever information is reasonably required to process a claim and it is your responsibility to cooperate in the investigations. In case you are uncomfortable with questions asked of you via a telephone interview, you can ask for a written list of questions, which you may respond to in writing.