INSURANCE & NATURAL DISASTERS 1 Basics, essential terms, claims, and settlement of your claim. Presented by G. Mark Santa Anna
Disclaimer 2 This presentation is intended as a general overview of insurance for general knowledge in California and is not intended to provide you with specific legal advice. This presentation does not create any lawyer-client relationship, and should not be construed as the provision of legal services to any individual or entity. Make sure to consult with an insurance agent and/or an attorney who specializes in insurance law regarding specific questions pertaining to your particular policy.
California Department of Insurance 3 www.insurance.ca.gov Consumer Information Information specifically for Seniors Agent and Broker Information Insurance Companies or Insurers Filing a Complaint Fraud Updated and helpful News Consumer Hotline: (800) 927-4357 (HELP)
Objectives 4 Provide an introduction to basic insurance terms, the claims process, natural disasters, and how these things affect you. The goal is to get you thinking and asking questions about what you currently have and what you may need to assist you when a natural disaster may strike. REMEMEBER, the best time to ask questions of your insurance professional is BEFORE any thing happens.
Moving Forward... Foundation 5 What do you know about the basics of insurance, coverage for losses, exclusions, the claims process? Surprise: There are MANY different standard forms of insurance. What do you have AND what does YOUR policy cover? What do you believe are important factors you should consider when buying or renewing your insurance?
6 Insurance policy = Contract to protect you against a RISK. You decided what you need You pay for coverage against a peril Company makes you whole? Claim procedures and payments Resolving disagreements?
Who here has insurance? 7 Have you looked at your actual policy? When was the last time? Did you accept what your agent told you? After you received your policy in the mail, did you have questions? Where is your insurance policy NOW?
8 Out of sight?
9 The broad terms of insurance
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11 Types of Homeowners Insurance
Some others... 12 HO-1: Basic form homeowners insurance. HO-4: Renters or tenant s insurance. HO-6: Condominium unit owner s.
D I S A S T E R S 13 Key terms defined Purpose Obligations of each party Warranties Signatures Attachments/Exhibits
Here s some of them... 14 Earthquake Tsunami Blizzard Hailstorm Hurricane Tornado Wildfire What else can you name?
8 States w/most natural disasters 15 Texas- tornados, floods, hurricanes, wild fires California- earthquakes, floods, landslides, freeze, flooding, storms Oklahoma- tornados, storms and floods New York- blizzards, tropical storms Florida- tropical storms, hurricanes, floods Louisiana- hurricanes and tropical storms Alabama- hurricanes Kentucky- flooding, tornados, landslides
What is covered? 16 Depends on how the damage is classified. How do you find out? And, WHEN? Most likely you will not be insured for a natural disaster if you live in an area where they most likely occur. (CA, FL, or TX) Special policies OR endorsements have to be purchased to protect you against a natural disaster.
California Earthquake Authority 17 The California Earthquake Authority is a publicly managed, privately funded, not-forprofit organization that provides residential earthquake insurance and encourages Californians to reduce their risk of earthquake damage and loss. General Information: 888-423-2322 Fax: 916-327-8270
18 Northridge Earthquake: Jan. 17, 1992 @ 4:30am
National Flood Insurance Program 19 Floods are the most common and most destructive natural disaster in the United States. Ninety percent of all natural disasters involve flooding, and all 50 states have experienced floods or flash floods in the past five years, according to Floodsmart.gov. The damage from a flood is not covered under a standard homeowner's policy. Flood insurance is a special policy that is federally backed by the National Flood Insurance Program (NFIP) and available for homeowners, renters and businesses. Executive Office: (202) 471-3990
Flood zones: Why you need to know 20 A flood zone is a geographical area designated on a Flood Hazard Boundary Map. Flood zones are an indication of estimated flood risk. Properties located in higher-risk flood zones are lenderrequired to carry flood insurance. The National Flood Insurance Program aims to reduce the impact of flooding on private and public structures. It does so by providing affordable insurance to property owners, renters and businesses and by encouraging communities to adopt and enforce floodplain management regulations. These efforts help mitigate the effects of flooding on new and improved structures. Overall, the program reduces the socio-economic impact of disasters by promoting the purchase and retention of general risk insurance, but also of flood insurance, specifically.
21 Yes, floods happen in California!
22 What do you do when an event strikes? Take care of yourself and your loved ones. Develop a plan BEFORE it happens. PLAN: Protecting yourself and your property. EMERGENCY PREPAREDNESS KIT* Get photos and make an inventory beforehand Have all your important files and numbers available. Try and protect what you have in the aftermath of the event. CALL your insurance company and make a CLAIM.
Initiating your claim... 23 1. Make the call to your insurance agent or directly to your insurance company. 2. The Claims Department will contact you and get vital information about your claim and damages. 3. An insurance adjuster will contact you shortly thereafter. If the claim involves a natural disaster, be prepared to wait a longer than usual period to be visited in person. 4. The Adjuster will visit your home, take photos, and make an initial list/scope of damages and determine how the loss occurred. 5. The loss will either be accepted or denied.
Getting through a claim 24 Be thorough Be present for all inspections Don t be forced into a settlement Know your rights under your insurance policy Make sure your claim is filed properly Document everything Stay on top of your insurance company Work with your insurance company Be honest
California Protections 25 California has more laws to protect insurance policyholders than any other state in the country. These laws tell insurers what they must, can and cannot do. There are laws made by judges and legislators in Sacramento called case laws and statutes or code provisions. There are laws called regulations that are written by the state Department of Insurance. But a law is a law regardless of fancy labels.
California s Fair Claim Settlement Practices Regulations 26 There are many laws that tell companies and their representatives how they must behave when insured property is damaged and a claim is filed. Many people, including some claim adjusters are not aware of the details in these laws. Some companies and adjusters routinely break these laws when handling claims knowingly and unknowingly.
Insurer s Duties 27 The most important law to remember is that your insurance company has the legal duty: to investigate and process your claim; To pay your claim fully, promptly and in good faith; and deal with you fairly at all times.
The insured s duties 28 Some of the duties of the insured include the following: Disclose material information, Avoid concealment and misrepresentation, Report loss or damage to the authorities, Provide notice of claim to the insurer, Prepare an inventory of the damaged or stolen property, and Provide proof of loss to the insurer. The inability of the insured to comply with their duties is a ground for breach of contract, cancellation of the policy, and forfeiture of the premiums paid.
29 California s Fair Claim Handling Regulations Deadlines for responding to letters and phone calls Deadlines for your insurer to pay or deny Deadlines for submitting paperwork to prove your loss What information your insurance company must give you What information you must give your insurance company Where can you get a copy?
Essential Elements 30 Good Faith Prompt Honest and Complete Communications. Fair Claims Process Cooperative Investigation ALE- Disaster Designation 24 months or policy limits in advanced to assist in the disaster Adjusting and paying your dwelling claim Contractors Fair Depreciation Rule of Thumb Examination under oath Attorneys, Complaints and Litigation
Settling your claim 31 When it comes to settling your claim: Review everything. If in doubt, get a second opinion. If you disagree with your insurance company, there are ways to resolve the dispute.
L.A. Law Library 32 Phenomenal Resources at your disposal. 2 nd largest public law library in the US. The Library of Congress is the largest. What about professional help? Reference Desk can provide general references to outside sources of referrals.
Professional Legal Referral 33 LACBA Smart Law Los Angeles County Bar Association has a client referral base for clients seeking experienced attorneys. Attorneys have been screened in their relative practices and have professional liability insurance. Find an attorney by phone: (213) 243-1525 (Monday through Friday, 8:45 am to 5:00 pm) Find an attorney online: www.smartlaw.org