A new year begins. Code upgrades and your insurance settlement.
2020 has begun with our first fire scare on the evening of 1-5-2020 with a small brush fire on Malibu Canyon outside the city limits during a Santa Ana condition. The City, Nextdoor, and the Pulse Point app all provided information in a timely fashion. LA Co. Fire responded quickly and forcefully and there was no sign of where the fire had been by 10 am the next morning. I love a success story!
I’ve spent the last few days talking to citizens in the final throes of negotiations with their insurance companies over their rebuilds. Interesting conversations ensued over code upgrade coverage, insurance company settlement offers and the negotiating practices of insurance companies.
This morning the couple I was talking to showed me a rebuild cost estimate prepared by one of the 6 adjusters. These adjusters were from various parts of the US and have represented their insurer over the last 13 months. The “estimate” to which arrived was a laughable cost to rebuild of about $200 a sq. ft. to rebuild. There was no allowance for architectural fees, engineering reports, septic system, or code upgrades. The adjuster seemed to think that was a fair offer. Their recounting of multiple delays as successive adjusters were appointed who each “need a few weeks to get up to speed on the file” and a consistent refusal to honor the alternative living expense coverage over the last 13 months will make for a strong case of “Bad faith”. The insurance company has also “lost” their contents list several times and has not even made an offer for the policy limits on the contents. The lack of cooperation from the insurer has made it impossible to complete their plans for submission. Their patience is exhausted and I endorsed their decision to turn this over to their attorney at this time.
Another couple with a more consumer friendly insurance company has had a much more congenial experience. They received reimbursement for the contents as soon as they completed the list. Their rental of a home to live in while the permits were obtained and the house is being built was approved within less than 2 weeks on 2 occasions. A settlement for the original cost of the house was promptly negotiated while leaving the code upgrade provision in place. Now that construction has begun, they are in the process of teasing out the additional costs which are due to the need to comply with the changed seismic engineering requirements, interior sprinklers, widening the driveway for better Fire department access and much more. The owners are not anticipating any difficulty in their claim for code upgrade money and contacted me primarily to make sure other fire survivors don’t leave any code upgrade money on the table as they rebuild.
Every survivor and every insurance company is having a very different experience. My wife and I have been through this unpleasant process twice. The best thing that ever happened to us during the process was the lucky accident of having videoed the second house about 4 months before our fire and sending a copy of the recording to a relative 200 miles away who wanted to see how the remodel turned out. The relative still had the recording after the fire and it was copied for the adjuster who immediately realized that all their willful misunderstanding was over. Within the month we had a policy limits settlement offer. Please tell your friends to video each of the rooms in their homes and make copies that are stored in their safe deposit box, a relative’s home, the cloud and anywhere that is not on the insured property.