…who you believed before the fire.

When Weed’s homeowners bought their insurance policies, they trusted and believed the insurance agents and brokers. Then wildfires changed everything.

Burned home in Weed, California; photo by Justin Sullivan/Getty Images

Although homeowners buy insurance for the total loss of the structure, a simple fact remains that getting dollars from an insurer does little to replace the memories of holidays around the dinner table, of grandkids playing in the yard, and the photo albums from decades past. Still, we must move forward and what remains to be done is to submit the claim to the insurer; receive the check; and start the process of rebuilding. But this is when the real nightmare begins — realizing that your insurer intentionally underinsured your home so that it could sell more policies than the competition.

Underinsurance: A persistent problem

After the 1991 Oakland Hills fire and the 2003 Southern California wildfires, legislators discovered through public hearings an additional aspect of the danger wildfires pose to homeowners: underinsurance. Legislation was enacted to remedy this situation. Nonetheless, when large wildfires struck Southern California in 2007 and 2008, state officials realized again the underinsurance problem persisted.

Data from the 2007 wildfires showed that 74% of the homeowners were underinsured by an average of $240,000. To address these concerns, the Insurance Commissioner proposed new regulations and amendments to existing regulations, and in 2010 strong and strict guidelines were put into place.

photo by CNN

Fighting the good fight for homeowners

My clients are fighting these insurers and I am disgusted with what we are uncovering: Attorneys playing slick; adjusters deceiving their insureds; agents and brokers who over-promised and under-delivered. Like the rest of us, when buying insurance to cover their homes, each owner was asked questions by the agents/brokers, like the year the home was purchased, square footage, price, foundation, etc.; each owner was told the insurer would issue a policy; and each was told that when the premium was paid, the coverage would begin. In each case, the insurer calculated the policy limits and the annual premium. The homeowners believed their insurers, paid their premiums, and found comfort knowing that their homes were protected.

Now, after the 2014 fire, homeowners are being told by the very same insurers who calculated the limits that the coverage limits are grossly inadequate. When these homeowners bought their policies, they trusted and believed the insurance agents and brokers; they trusted and believed the “Good Hands People” of Allstate; the “Like a Good Neighbor” agents of State Farm; the brokers and agents for the insurer whose memorable jingle is, “Nationwide is on Your Side.” But where’s Peyton Manning now? Where is “We are Farmers, dum da dum-dum, da dum dum”? And where are these supposed “Good Hands” people?
 

“You should not have believed us.”

When the 2014 homeowners complained to their insurers, the insurance companies responded with: Well, I guess you should not have believed us when you bought that policy.

It’s time we come together to rebuild these towns and tell these insurers that 1991, 2003, 2007, 2008, 2010, and 2014 are far too many warnings. The question I ask now: Why should the insurers get so many warnings when the insured, who misses one single premium payment, gets a nasty letter that coverage is being canceled?

photo by CTsabre14

Our legal system is the envy of the free world. Sure it has its flaws, but for the most part the ideals of the founding fathers remain true. However, California’s courts are severely congested and delays are quite common.

In this case, the Defendant refused to admit fault and refused to take responsibility for its actions. In turn, the Plaintiff refused to cave in, and instead stood firm on his principles. The courthouse is where this battle will end, and both parties will have to wait 5 years for a courtroom to become available.

Darryl (not his real name) was injured while delivering pallets and product to a warehouse. Most of the events leading up to the injury are captured on the warehouse surveillance video with one exception — namely, Darryl is on the back side of the pallets and therefore not visible in the video. The video showed Darryl walking around the pallet checking the delivered items against the delivery manifest. The video showed a warehouse employee backing up a truck without looking and hitting the pallet, and the video showed the pallet moving 3 to 4 feet from the impact. As a matter of deduction, anyone on the back side of the pallet, standing within 3 to 4 feet, would be struck by the pallet. Darryl was struck and injured.

Darryl notified the warehouse of the incident. The warehouse should take care of Darryl. But after a warehouse supervisor saw the video, he saw an opportunity to cover his own bottom and to point the finger at the victim. Realizing that Darryl is not shown in the video, the supervisor then stated that he was a direct eye witness standing a few feet from Darryl, and that Darryl was four or more feet away from the pallet such that the pallet very lightly touched Darryl. Darryl could not believe his ears as this supervisor, accusing Darryl of fraud, was in fact lying about the incident. There were no eye witnesses. And thus the battle began.

Darryl contacted our law firm to assist with this claim. Settlement was attempted, but the warehouse refused. A lawsuit was filed but the warehouse denied all responsibility. Depositions were taken and the supervisor testified that Darryl was barely tapped by the pallet and that it is an insult for Darryl to bring this claim. In short, the supervisor testified that Darryl is a lowly liar.

During trial the warehouse supervisor again testified about eye-witnessing Darryl being ever so lightly tapped. Again, insinuating that Darryl is fabricating this story. And although the supervisor had reviewed the video of the incident, what the supervisor should have reviewed was the entire video. My office and Darryl spent hours combing through the video, frame by frame, and although it was a grainy picture and of low resolution, we were able to conclude that the supervisor was NOT standing next to Darryl and in fact had no view of Darryl.

At trial, the supervisor was impeached with his own video and the court was less than happy with the supervisor’s “story.” The court found in favor of Darryl and justice was done, although it took five years.

People quip that “you can sue for anything in this country,” but what is often forgotten is the quip that “you can lie and deny about anything in this country.” In the end, when the matter is laid bare before the court the hope is that justice will be served and that the finger-pointing, fault-denying, blame-everyone-else supervisors will be held accountable.

Good job, Darryl, for sticking to your principles!

photo by Michael Burns

This “…new agent; …please resubmit” process was repeated until Mary had enough. She contacted me and we met to discuss her case. I explained that this process of repeatedly transferring the file to another agent and losing Mary’s requests is common. It’s how they play the game. Mary then told me her story and we devised a course of action.

The insurer refused to negotiate for a fair settlement, instead taking the position that Mary should get nothing. The lawsuit was filed, depositions were taken, documents were gathered, and then we waited for an available courtroom for the trial. On the eve of trial the insurer offered $500, which Mary promptly rejected (expletives withheld).

Trial began, and the insurer had no shame in using all of their dirty tricks. They accused Mary of everything: That she wasn’t injured, that her medical care was not proper, that her time missed from work was suspicious, and finally they accused Mary of causing this rear-end accident by arguing that although she was stopped at an intersection she must have hit the other car. The jury was not impressed.

After deliberating over a couple days, the jury returned a verdict in favor of Mary for an amount which included, to the penny, each item of damage incurred by Mary – approximately $73,000.

Editorial Moment: Mary was an awesome client. She knew that she was right, that the insurer’s offer of $500 was an insult, and that a jury would do the right thing. Mary believed in the right to a jury trial – guaranteed through the 7th Amendment to the Constitution of the United States of America. This right to a jury comes under attack every year by tort reformers, with few of these “reformers” ever admitting that they’re funded by the very same type of insurance companies which tried to abuse Mary. Is Mary supposed to take the $500 – take it or leave it? Does Mary have any options?

What these reformers never offer is an alternative — without a jury, what is your alternative? I invite these wannabe reformers to tell me what they have to offer that’s better than Thomas Jefferson’s 7th Amendment.

A 15-year-old child is walking to school. She is crossing the street in a crosswalk when she’s struck by a car. The driver was obviously careless — he failed to see children gathering for school and failed to see our 15-year-old in a crosswalk. The driver was also irresponsible — he carried a low-end $15,000 insurance policy — the cheapest insurance legally allowable in California.

Mom didn’t know what to do — the medical bills would eat up every penny of the $15,000. She called an attorney-friend who then asked if I could help. I explained to the mom that although her daughter is too young to drive, although her daughter was a pedestrian and not riding in a vehicle, and although neither mom nor daughter is at-fault, that mom’s $100,000 automobile insurance policy would provide coverage.

RESULT: $100,000 ($15,000 plus $85,000).

I have tried many, many cases involving bad drivers hurting good people. You would think this to be a simple and short process, but often it’s not.

The bad drivers may feel at fault for what they did, although some deny it ‘til their last breath. Then the insurance company gets involved and starts to deny everything. I have a joke with my friends that insurance companies would deny they ever knew you… until the premiums are due, and then they love you.

Mary Meyers* was one of my clients in a case of “Bad Driver Hurts Good Person.” Mary was a pedestrian struck in a crosswalk by a northbound vehicle driving in a southbound lane. The driver was late for an appointment so she got around the stopped traffic by going the wrong way in the wrong lane.

Mary wanted nothing more than to get well, return to work, and recover her wage loss and her medical bills. Mary was an hourly employee with limited benefits; she lost wages and had to pay out-of-pocket for her copays and a significant deductible. The driver refused to acknowledge her guilt so the case went to trial. The insurer took a hard stance and stated: We will make no offers, we will accept no offers.

RESULT: Verdict for Mary, $212,000.

*Name is changed

Taylor* was a 17-year-old boy living with his parents and still unsure what to do with his life. Next year was high school graduation and then college or trade school, or off to work. What Taylor did know for sure is that he was young and healthy and the world was his oyster. He could play for one more year before becoming an adult. Then one night changed everything…

Taylor and friends were on a date, parked on a hill to oversee the city lights. When it was time to go, the driver, in a moment of inattention, put the car in reverse instead of drive, and backed off the cliff. Taylor was a rear seat passenger and as the car tumbled Taylor suffered a significant compound fracture to his femur. As the medical bills began to pile-up, Taylor called me to help.

This case does not stand out for reasons of liability or injury as both were certain: the driver admitted to his fault and the injury to the leg was undeniable. Rather what makes this case remarkable is the decision which Taylor had to make when the insurance company offered hundreds of thousands of dollars to settle the claim.

Taylor took my initial round of advice to outright reject any offers less than $300,000. He trusted me as his attorney and his parents trusted me as both an attorney and as a father. All they asked of me was to do for Taylor what I would do for my own child. That request is something I will never forget — it struck a chord with me and woke up a 25-year veteran to realize again the great responsibility I owe to my clients.

At a mediation, the insurer eventually made their best-and-final, a term meaning their highest offer: $500,000. And while that seemed like, to quote Taylor, “a hell of a lot money,” I advised Taylor to walk away. I also advised him that there are no guarantees that the insurer won’t pull the offer, or offer less as trial approaches.

Taylor trusted in me and followed my advice to walk away from $500,000. How many teenagers do you know have the ability to make that incredibly adult decision? With a trial date approaching, the insurer responded to my request to continue with negotiations. At the end of the day, Taylor received just short of $600,000.

I placed this case story on my website for a couple reasons: (1) it has a happy ending for Taylor, a great kid and one of the most mature teenagers I have ever met, and (2) it reminds me constantly of how much trust a client places in their attorney and that it’s a huge professional responsibility as well as a personal honor to fulfill that trust.

*Name has been changed