Insurance Company more than doubled my policy and refuses to pay any more. Blane Parrott asked 2 years ago
Insurance Company more than doubled my policy and refuses to pay any more.

I lost my nearly 5000 ft² house in the Paradise Campfire

  • Due to an error by insurance company I was only insured for 1500 ft²
  • It took me 3 years to get them to pay of my entire policy at only 1500 ft².
  • My contents list was worth over 1.2 million dollars and they depreciated it down to being worth $240,000 so it would fit the 1500 ft² policy. My items were less than 3 years old and many items were depreciated up to 90%
  • I wrote a letter to the the insurance commissioner and the insurance company admitted they made a mistake and more than doubled my policy and backdated my new policy to before the fire.
  • They refuses to pay me the A value on my house which is now $805,000. I’ve had estimates to have it rebuilt for 1.4 million.
  • They are refusing to give me anymore on my contents list because they said they maxed out everything on my old policy even through the amount they gave me is less than half of my new policies contents list.
  • For example they took my one year old $4,000 mountain bike and said it was worth $249 and then depreciated that to $243.I need help with how to proceed against this insurance company.

    thank you

3 Answers
Daniel Veroff Daniel Veroff Expert answered 2 years ago

Hi Blane,

If the CA Department of Insurance has done all they are going to do to help you, then your next step is legal counsel. You need legal advice for these issues.

Answer for Insurance Company more than doubled my policy and refuses to pay any more. United Policyholders Staff answered 2 years ago

Hi Blane,

So sorry you’re going through this.

If you choose to seek legal advice, United Policyholders has a directory of consumer-oriented credentialed professionals who support our mission and have experience in insurance law.

Please read our tips on Hiring Professional Help and Hiring an Attorney for an Insurance Claim, then visit our Find Help Directory, select your state, and then choose “attorney, legal help” from the dropdown menu. Before hiring any professional, it’s important that you understand how fees and costs will be handled, and speak with at least one prior client reference.

Please note that UP strives to help consumers who are seeking qualified and reliable professional help, but we cannot warrant the work or services of professionals, even if they are listed in our Find Help directory or serving as volunteers with our organization. We encourage you to check references and thoroughly vet before hiring.

We hope you are able to find the help you need.

Don A. Lesser, Esq. Don A. Lesser, Esq. Expert answered 2 years ago

Hi Blane. I agree with Dan Veroff that you need to consult with a lawyer at this point. You mention several different types of problems with the insurer’s response to your claim. I recommend you consult with a lawyer so you can understand what your legal options are and their pros and cons.

One aspect of your disputes with your carrier appears to be the amounts required to repair or replace your home and personal property. Generally, disputes about the scope and cost of required repairs can be resolved via a process called “appraisal,” which is a form of private arbitration the carrier has to participate in if the policyholder demands it. The biggest advantage of this process is that it’s a lot faster than a lawsuit and there’s no appeal, so in 3-6 months you could have a ruling on the amount you’re entitled to for the repairs/re-building the company will pay without further dispute. There are several downsides, the details of which I can’t get into here, but the biggest one is that appraisals can get very expensive, even if you don’t hire a lawyer to represent you.

Other issues, like the amount of coverage your policy provides, whether they handled your claim in good faith, and whether you have a claim against your agent or the carrier for under-insuring you home, can’t be decided by an appraisal. The Department of Insurance has a mediation program for residential claim disputes which the Department can require the insurer to participate in. If successful, the insurer would pay you more than they’ve offered so far, enough to make it worth your while to release them from any further liability. You won’t be offered anything for “bad faith” claim handling in this type of mediation, but you’ll be required to give up any further claims you may have against the carrier based on the fire and their handling of your loss.

Otherwise your way forward on these issues is to file a lawsuit. I recommend you select a couple of experienced insurance coverage/bad faith lawyers from the UP website who represent policyholders and offer a free initial consultation. Before or during the consultation, the lawyer will ask you for some brief preliminary information about your claim, walk you through the pros and cons of a lawsuit, discuss available fee arrangements, and give you an indication whether s/he may be willing to take your case based on the information you provide before or during the consultation. I recommend you consult with at least two lawyers before making a decision.

I hope this is helpful. Good luck.