Radio Show


Episode 8

In this Episode

  • – Fire Damage Claims
  • – Under Insurance
  • – How do deal with insurance companies
  • – How to prepare for an insurance claim
  • – Construction Defects
  • – Latent Defects vs Patent defects

Hosts:

  • Danny Abir
  • Lorraine Love

Special Guests:

  • Alex Cohen, attorney
  • Terry Bailey, attorney
  • Amy Bach, attorney, co-founder of United Policyholders

Listen to the show

 

Lorraine Love
Good afternoon Los Angeles. This is KABC 790 talk radio. Welcome to the ACTS law hour, heard every Saturday at noon. Providing you with solid information from our good friends at Abir, Cohen, Treyzon, and Salo the ACTS law firm that’s A C T S law. Find them at actslaw.com. Knowledge is power and power is knowledge and the ACTS law hour wants to empower you today. And now, here’s our host and managing partner of the ACTS law firm Danny Abir along with me Lorraine love.

Danny Abir
Good afternoon Lorraine.

Lorraine Love
Good afternoon. How are ya?

Danny Abir
I’m good. How are you?

Lorraine Love
I’m good. Do you like my ugly sweater?

Danny Abir
I love it.

Lorraine Love
It jingles, do you want to hear what it says?

Danny Abir
I love the noises it makes.

Lorraine Love
Can you hear it? It’s a big cow on my ugly sweater. Yesterday was National Ugly Sweater Day.

Danny Abir
I heard.

Lorraine Love
Yeah, I’ve got a couple in my closet, worn a different one yesterday, one today just for you. And it jingles and everything else.

Danny Abir
I think I have to thank my wife for the fact that I don’t think I have any ugly sweaters. If it was for me, probably every single one of my sweaters not just my Christmas ones would be considered ugly. Today, we’re going to be very lucky, because not only we have two guests here in the studio, in addition to our normal one guest today we have Alex Cohen my partner and my other partner Terry Bailey, both of whom have been on the show and those who have been listening for the past few weeks have heard both of them.

Lorraine Love
Yes.

Danny Abir
We’re also going to the second segment bring on someone very knowledgeable on the issues related to policyholders and insurance. She’s the executive director of United Policyholders. Her name is Amy Bach. She’s also an attorney.

Lorraine Love
OK.

Danny Abir
And we’re going to be discussing the fires in Southern California fires, we’re going to be discussing insurance claims and how insurance companies deal with it. And in the final segment of the show, I want to dedicate one-quarter of the show to construction defect which is something that I remember from last week you said you had some questions related to construction defect that I promised you.

Lorraine Love
Yes.

Danny Abir
I brought Terry with me this week so we can discuss that as well. For the callers, for the listeners, to the extent that you have questions related to insurance claims, if you’ve had damage to your property,  if you been a victim of the fire damages, the fires in Southern California or if you just have questions related to insurance claims you can even call in when Amy Bach is on, in the second segment. We really have a wealth of knowledge here at the studio today with both Alex and Terry related to insurance claims and I think it will be very helpful for anybody who asks questions.

Lorraine Love
I agree. I think everybody is wondering what to do and these fires are just they’re still out of control. So I think this is great to have people call in anybody like Danny said with fire damage or damage to their home or business even if you have questions about smoke and ash damage, construction defect, anything like that. Give us a call we’d love to talk to you. The number is 800 2 2 2 5 2 2 2.

Danny Abir
So how are you, Alex?

Alex Cohen
Good morning Los Angeles, hello. Good morning Lorraine. I hope you’re doing well. I’m excited to be here today to talk about the property damage insurance claims, in particular, all the issues that are going on in our state. You know with all the wildfires, with all the fires that are happening the displaced people and I’m sure there’s a lot of questions about what do I do. Where do I begin? There’s such a lack of knowledge unfortunately out there that we’re looking to help people out. And I hope that our show today will bring clarity to what things have to be done.

Lorraine Love
Agreed.

Danny Abir
OK, so one of the things, I didn’t think we were going to have to discuss anytime soon at the office was that I thought, “OK there’s going to be fire. People are going to be dealing with their insurance companies for the first few months” even Terry and me, who I’m about to say hi to in a second. Terry and I even had this discussion at the office that there’s going to be about like maybe three four-month period before the insureds are gonna get sick of having to deal with the insurance company. When the insurance companies are going to start basically lowballing or giving problems to their insureds and we’re getting calls already at the office from people saying my insurance company is giving me a hard time.

Lorraine Love
Already.

Danny Abir
I mean for people to be dealing with what they’re dealing with, the fires and still have to deal with insurance companies not helping them is huge.

Lorraine Love
Yeah I mean, it’s emotional too right? I mean it’s your property it’s all your stuff, it’s your home.

Danny Abir
It is. Hi Terry.

Terry Bailey
Good morning, good morning Lorraine. I just want to acknowledge before we get into the homeowners and dealing with insurance claims, I want to acknowledge the firefighters and other first responders who are out there. And let’s all keep Corey Iverson and his family in our thoughts and prayers.

Lorraine Love
Absolutely.

Danny Abir
Yeah. I mean we have many thankless jobs in our world and that’s definitely one of the most thankless jobs.

Lorraine Love
We talked about it last week right? I mean we’re running out of the fire and they are running in.

Terry Bailey
Yes.

Lorraine Love
So what kind of a sacrifice is that? And you know, we had some callers last week a lot of people already were calling last week asking questions about fire damage and wanting to know what to do, where do you start. So, I know Alex last week was really great about doing it from start to finish. So, if you have any more questions. Give us a call right now fire damage insurance claims you know any sort of construction defects anything call us at 800 2 2 2 5 2 2 2.

Danny Abir
So, one of the things that, between the two of you have a lot of experience, I mean over combined probably combined over 45 years of experience dealing with insurance companies which I kind of have to say I’m sorry because dealing with insurance companies it’s not easy. They really are not made to help you or be helpful to you, mainly because it’s a for-profit entity, so they make money when they’re not paying out. And how do you deal with it when it comes to basically fire damage particularly when people are displaced when they are really at the most vulnerable stage.

Alex Cohen
Well, first you’ve got to realize you’re not on the same playing field. You’re not.

Lorraine Love
What do you mean by that?

Alex Cohen
Insurance carriers they have a lot more experience in handling claims overall.

Lorraine Love
That’s a good point because we don’t handle it, thank God every day, and they do.

Alex Cohen
Exactly it’s not a common experience. So people that experience any type of loss whether it’s a fire loss, water damage loss burglary vandalism you name it. The question is where do I begin?

Lorraine Love
Right.

Alex Cohen
The very first place to begin is your policy. Get a hold of your insurance policy. That has to be reviewed analyzed and then even when you analyze it yourself you may not even know what you’re reading. What are my rights what are my coverages?

Lorraine Love
What does this all mean? I mean yeah, I look at my policy, and I’m like OK, wait for this plus that equals what? It doesn’t even sometimes makes sense.

Alex Cohen
Correct, you mean you have like different sections of your policy concerning your dwelling, your living expenses your loss of use your personal property and the list goes on. And if you are not accustomed to how to read an insurance policy you’re already at a disadvantage. So then you got to determine you know, what kind of loss did I have. I know because of the fires, I like to get this to the to the fire topic, and Terry and I have a lot to talk about with respect to fire because there are partial fire damages and full structure fire damages. Terry what are some of your opinions regarding partial fire damages versus full fires.

Terry Bailey
Well, a lot of people probably don’t even understand. It goes back to what you were just saying, Alex, about having your policy and carefully reviewing it but a lot of people may not even know that they, in fact, do have coverage for smoke and ash claims even if their house was not actually burned down.

Alex Cohen
Correct.

Terry Bailey
You know a couple other things that I wanted to throw in here before we bring Amy in just a couple of tips on how to handle your claim and what to expect and some of this may seem very basic and in fact it is but when you’re under the stress of dealing with losing your home and your family being displaced. You might not think of all these things, but you know, certainly obviously the most important thing is to immediately report your claim to your insurance agent. Another very important thing, if you still have property left is to photograph and video all of the damage to your property and start preparing that inventory the insurance company is going to want, an inventory of all of your personal property within your home. Get to work on that as soon as you can. Along those lines too, do not discard any of your damaged property until you give the insurance company an opportunity to inspect it.

Lorraine Love
Ok, what do you mean by that?

Terry Bailey
Well, whatever’s left of your property you need to document that damage if you expect to be paid for it. If you don’t document the damage and you don’t give the insurance company an opportunity to inspect it you’re inviting more difficulties down the road when you’re trying to collect on that.

Lorraine Love
OK.

Terry Bailey
You know what I always tell people? I always tell people to videotape or photograph the entire contents of your house.

Terry Bailey
In advance of any incident that occurs. So I would take a videotape,  you can use your phone these days, so easy and it uploads on the cloud. You can just go and videotape it and at least document what you had.

Danny Abir
Well, we’re going to bring in Amy in the next segment where the three of you can discuss more about what the insurance, the insurers can deal with how the insurers can deal with the insurance companies and how they can read through their policy with the help of attorneys who will actually explain it to them.

Lorraine Love
Exactly. So we’re going to take a quick break and when we get back we’re going to continue our conversation with our guest attorneys today Terry Bailey and Alex Cohen talking about fire insurance claims and property damage and all of that. It looks like we have some callers already on the line. So if you have any questions and you want to call in as well, please call us at 800 2 2 2 5 2 2 2. This is the ACTS Law hour with your host Danny Abir and me Lorraine Love on talk radio 790 KABC.

2nd Segment

Lorraine Love
We are back with the ACTS Law hour that’s A-C-T-S law. You can find them at ACTSLAW.com. Before the break, we were talking with our guest attorneys, Terry Bailey and Alex Cohen about fire insurance claims. If you have any questions about fire insurance claims or any legal questions property damage anything please give us a call. We’d love to talk to you. The number is 800 2 2 2 5 2 2 2. And here he is your host Danny Abir along with me Lorraine Love on Talk Radio 790 KABC.

Danny Abir
OK, fantastic. So we’re going to bring on Amy Bach who’s been a professional advocate for insurance policyholders since 1984 she’s been an attorney since 1989. She co-founded the United Policyholders in 1991 which is basically a nonprofit organization that aims to assist the insured understand and be able to benefit from their policy, and handle insurance companies. Amy’s fantastic. I mean if there is one person who you can comfortably say her heart is all into helping the insured that’s her and she’s also incredibly knowledgeable. So with that introduction let’s bring on Amy Bach, Good afternoon Amy.

Amy Bach
Good afternoon and thank you so much for having me on.

Lorraine Love
Thanks for being on it.

Amy Bach
Yeah well, it’s good to be with an expert like Danny who compliments the work we do and it’s part of the work that our nonprofit does so we wouldn’t be able to empower the insurer without experts like Danny and his firm you know, to carry them through.

Danny Abir
We actually are sponsors of United Policyholders because we truly believe the mission that they are on and what they are trying to do. Like I said, I don’t envy Alex and Terry and Amy for that matter for having to deal with insurance companies on a regular basis because it’s definitely not easy work to do. And I think they’re an incredible organization. They do a lot of good. It’s very helpful to have them there because not everybody knows what their rights are or at least they can have the United Policyholders on their side to help them with something like that.

Lorraine Love
Right.

Danny Abir
So, Alex Terry and Amy what do you guys want to talk about.

Alex Cohen
Well, I think what I want to talk about is a few experiences that I have seen in the in recent policies. I’m sure Amy can chime in on this is about the number of policies that people are finding themselves in. Like you know, when they’re looking at their dwelling coverages they’re seeing it’s substantially lower than what their current damages are when they go through a fire. I wanted to hear what Amy’s opinion is on that.

Amy Bach
OK, yeah so we call that underinsurance. You know when people find after a loss that the amount of coverage they have on the structure is not enough to repair or rebuild. And it’s very very common after especially after wildfires and so our organization we started in 1991, and the first big wildfire that we were involved in which gave birth to our roadmap to recovery program to which we’re now in Sonoma, Napa and Ventura providing guidance to people but from our very first wildfire in 1991, the biggest obstacle for people to get back on their feet, after losing their home in the wildfire has been under insurance. And it doesn’t hit everybody but it hits a lot. So it’s about our surveys has shown that about on average 60% of wildfire survivors are underinsured by anywhere from $10,000 to even up to $500,000. So those people the average amount in the last big San Diego fire that we surveyed was about $200,000. That’s how short people were on their coverage.

Lorraine Love
Wow, and we’ve talked last week about, you know, what to do with your policies right. So one of the things we’re saying is you know look at your policies review your policies because it’s not something that gets reviewed all the time. So in your expertise and I mean what do you think? Review them every few years would you suggest review them annually?

Amy Bach
Yeah, I think so, but the main thing is that you’ve got to have a conversation with the insurance company, and you got to take notes and write down when you have the conversation and what gets said and then put them in a safe place because people don’t know how much it’s going to cost to put their house back, they rely on the insurance companies and agents to do that, to calculate that and they don’t question the expertise that the insurance company has. So, you can look at your policy and you can say, so in other words, yes review it but review it with the insurance company and say all right I want to make sure that my coverage is what I need. Do I have enough? And then you write down their answers. You know, the formulas the software that insurance companies use to set the limit when you buy insurance and when you renew are flawed and they just keep using them because the law protects them.

Lorraine Love
OK.

Lorraine Love
So the reality is you think “oh yeah my insurance company knows how much insurance I need”, but they’re not doing the math carefully enough, and then after the fact when it becomes a problem they hide behind their lawyers. Basically immunity, which is that there’s this fiction that property owners set their limits, the courts just keep on and upholding that fiction saying “Yep, yep policyholders duty to set their own coverage A”. And we know those of us who are in the trenches know that policyholders don’t do that. In reality, it’s the insurance agent. I mean can you imagine you walk into an insurance agents office and say “OK how much coverage you think I need on my home”, And he says “oh I don’t know you got to figure that out”. You would walk out of there so fast.

Danny Abir
Exactly how do I know? One of the issues that come up in a situation like this, we talked about this last week actually with Alex, is that prices of material go up when the fire is this extensive, is one thing when you have one house that’s on fire. But when you have thousands of homes that have burned down you have material and rebuilding becomes more expensive in that situation. The other thing which is also a common myth and Amy probably knows just as much about this is a lot of insureds and homeowners think that their insurance companies are their buddy and their friend, their protector. I mean, you see all these advertising on TV. They’re going to be there for you. Like a good neighbor. And when it actually comes down to it, my insurance company tells me that this is how it should be, they’re probably telling the truth because they’re my friend and they’re there to protect me.

Lorraine Love
I’ve been there you know, with that insurance company for 20 years so of course, they would not steer me in the wrong direction.

Danny Abir
And the question I always ask is how many times your assurance company has taken you out to lunch in the past 20 years.

Lorraine Love
Zero times.

Alex Cohen
I think the other things that go on here with agents is unless they’re pushed and the question is asked, “do I have adequate coverage?” They’re reluctant to want to increase your coverage because it raises your premium and then you may go down the street to another carrier.

Lorraine Love
Right. Amy, I mean there’s no way that any of these insurance people can be held accountable if they don’t help you to get the right insurance.

Amy Bach
Well, they can be if you’ve got enough proof of the conversation and that’s why I talked about saving the notes. Because what happens is that we deal with these guys. You know, Terry and Alex and Danny they’re dealing with hundreds of people, but because we do these big meetings we deal with thousands of people.

Lorraine Love
Right.

Amy Bach
So you know, people solve underinsurance in different ways. And you know the people that the disaster survivors that we’ve worked with over the last 20 years lots of the underinsured folks have been able to get their insurance companies to retroactively increase their limits. But it almost always happens behind closed doors, confidentially with a lawyer helping them because if the circumstances are right and you make your argument to the insurance company in a way that they buy your argument and they say OK as a business decision we should just make this person whole. They do it, but you will find the proof of it. It happens like I said behind closed doors. We know about the ones where people fail in court and a lot of times it’s because all they have to prove that they tried to get full insurance and they were assured that they had it and so they didn’t take any action right.

Lorraine Love
Right.

Amy Bach
The insurance companies very often will say “Oh you’re fine you’re fine”. You know I mean I hear people say all the time “I went to farmers and I asked them for more coverage and they said they wouldn’t and that I would be over insured”, that kind of thing right?

Lorraine Love
That’s interesting. I didn’t even know that could take place.

Amy Bach
Yes, it definitely can.

Alex Cohen
Like Amy said the vast majority of people are underinsured and if you ask your insurance agent how did you get the number. What formula did you use to get my dwelling limits? Oftentimes you really don’t have the answer to that. So when you’re uninsured and you’ve lost your property like Amy says if things are going on behind closed doors, it won’t happen without litigation. So these things get protracted, and there’s a lot of delays and delay is no good for the policyholder. And often times I’ve seen people lose their properties lose their homes as a result of not being able to rebuild and get back into their business or homes.

Lorraine Love
Now, do you think that out of all your guys’ experiences if you start from the beginning with an attorney once this happens then your chances of getting the resolve more in your favor are you know, better?

Terry Bailey
I certainly would agree with that. I would agree with that statement and it goes back to what my colleague Alex said at the beginning of the program is that you’re not on a level playing field with the carrier. The carrier has all of their professionals, they’re in the business of handling claims although some people would say they’re in the business of collecting premiums but they are in the business of handling claims this is what they do. The average homeowner has no idea what they’re getting into.

Danny Abir
The key is that you actually have it when you’re dealing with an adjuster behind the adjuster there is an attorney. I mean even if you have not gotten into litigation you’re not really just dealing with the adjuster you’re also dealing with the law that is behind the adjuster. So because of that, we start every show with knowledge is power and power is knowledge. The more knowledge you have and if you have someone on your side that understands the law and understands policy you’re much better equipped to be able to deal with insurance companies. So we’re going to go to our break and when we come back we’ll continue this conversation and hopefully, we’ll have more information for you that will make you more knowledgeable to be able to deal with your insurance company.

Lorraine Love
Exactly. So we’re going to take a quick break but when we come back we’re going to continue our conversation with our guests are attorneys Terry Bailey and Alex Cohen. We also have Amy Bach on the phone and she’s answering some questions as well. We’re talking about fire insurance claims so if you have any questions give us a call 800 2 2 2 5 2 2 2. This is the ACTS LAW hour with your host Danny Abir and me Lorraine Love on talk radio 790 KABC

3rd Segment

Lorraine Love
We are back with the ACTS LAW hour. That’s A C T S LAW. Find them at ACTSlaw.com. Before the break, we were talking with our guest attorneys Terry Bailey and Alex Cohen and we also got Amy Bach on the line from United Policyholders. We’ve been talking about fire insurance claims. If you have any questions about that or any legal questions give us a call at 800 2 2 2 5 2 2 2, and here he is, your host managing partner Danny Abir and me Lorraine Love on talk radio KABC 790.

Danny Abir
I was actually reading the questions that one of the callers has which I thought would be perfect to put on air.

Lorraine Love
OK.

Danny Abir
For Amy, Alex and Terry so let’s bring Rob from Santa Clarita on.

Lorraine Love
Hello Rob. Rob, are you there?

Rob
Hello.

Lorraine Love
Hi Rob.

Alex Cohen
You’re on the air. Go ahead.

Rob
Yeah, I’ve got a question. I bought a brand new house in Santa Clarita a year ago and when I got my insurance, AAA insured me for $488,000 to rebuild the structure.

Lorraine Love
Ok.

Rob
And I said well, if it burns down and it cost $500,000 dollars to rebuild it, so I’m short right? “No, we just have to put a number down to $500,000 and we will cover you of $525,000 we will cover you”. Is that accurate?

Alex Cohen
Not unless you have extended replacement cost coverage.

Amy Bach
So what you want to do is you want to take a look at the declaration’s page of your policy. And there are as Alex just said there’s this writer that you might have, in insurance lingo, it’s either a writer or endorsement and it would give you extended and it often will say 10%, 25%, 50%, 100% percent above in case you need it. Now, it sounded like he was hinting that you might have a different policy called guaranteed replacement which used to be around, there was a type of policy you could get that would say no matter what the rebuilding cost the policy would cover it. But, we haven’t seen a policy like that in a long time. I heard rumors that the Auto Club was selling something close to that. But again you’d want to really read your policy carefully because usually even if there is a “bump up” like an extended replacement it’s still going to have a cap, it still going to have a max, unless it is this very rarely seen policy form that’s called “guaranteed replacement coverage”.

Alex Cohen
So you have to take a look at your declaration page and that’s what we’re talking about the extended replacement cost coverage is either a numerical amount listed on your debt page or it’s a percentage amount, and it has to be there. So if the agent or the insurance carrier I don’t think AAA has agents you deal with them directly. If they if they told you that “no, no problem” if your if your damages are over $488,000 you’re covered. There must be an extended replacement cost. Otherwise, you’re bound to the limit which is $488,000.

Lorraine Love
I have a quick question. So how much would like an extended coverage are guaranteed replacement how much more is that on your policy, I mean is it a percentage does it vary?

Alex Cohen
Yeah, I mean Amy you might have to answer that.

Amy Bach
It’s generally going to be some sort of increase in the premium, and what we normally find it’s not usually that much, you know. So like, if your premium is let’s say you’re paying fifteen hundred dollars a year you know the extended replacement coverage is usually not going to run you more than a couple hundred bucks.

Alex Cohen
Correct.

Lorraine Love
Oh, that’s great.

Amy Bach
Yeah and that’s why it’s a bargain. Yes, we say like for your listeners that are out there wondering if they have enough. We say, look the safest thing because really guaranteed replacement policies are not an option for most people. So we say the safest thing is you try to get that coverage A as close as you can do what you think is right, in consultation with the insurance company like we are saying. And we tell people to do the math. Take your coverage A. The amount they’ve got on the structure and divide, and most people can know what the square footage of living space is in their house, not hard to figure out. And you divide it so that you by the amount of coverage A and say OK, I’m insured for let’s say $200 dollars a square foot. Like for most people you want to be insured in the sort of $200 to $300 square foot. Now that’s just what we say from reality. Insurance world most people aren’t insured to that amount. And then we say OK, so try to get the coverage A right and buy the biggest extended replacement feature you can afford.

Alex Cohen
And on top of that.

Amy Bach
And make sure you buy building code upgrade coverage. Those are the three things most important.

Lorraine Love
I’m sorry, what’s building code upgrades?

Alex Cohen
It’s a code upgrade provision that you can buy and it’s extra. Normally it’s 10%, or sometimes maybe more of your dwelling coverage. Four hundred eighty-eight thousand dollars like this gentleman does.

Lorraine Love
Right.

Alex Cohen
If you have a 10 percent code upgrade policy it will be $48,000 in this case. So that when they originally built your house to when an incident occurs and in today’s construction it requires an upgrade to the codes that weren’t previously in place. There’s going to be a premium charge for that. The city is going to require you to do certain things that you didn’t have to do before, right?

Lorraine Love
Like “title 24” correct?

Alex Cohen
That’s one of them.

Lorraine Love
Yeah.

Alex Cohen
So you would have to upgrade it. That’s a different provision of your policy that you have on top of them, in this case, $488,000 that this gentleman has that you would be able to apply strictly for code upgrade provisions.

Lorraine Love
OK.

Danny Abir
So I hope Rob got the answer to his question. One of the things I started the show with is we have an incredible wealth of knowledge sitting on this show.

Lorraine Love
I know.

Danny Abir
I mean. Amy, Terry, and Alex are incredible. So I have a question.

Lorraine Love
Danny, you’ve got knowledge though.

Danny Abir
I mean I have an insurance. These guys are like Obi-Wan Kenobi because they’re with us.

Lorraine Love
Yes.

Alex Cohen
Modesty is everything right?

Danny Abir
I’m like the little Jedi who’s in training.

Lorraine Love
You’re the ringleader here.

Danny Abir
I’ve been practicing for 22 years. So I have a question for you guys and because we have Amy on, it would be very good. In my experience the one thing that a lot of people, the pitfall is insurance adjusters and normal people, homeowners insurance call them, they’re at a disadvantage. The insurers are at a disadvantage because they don’t know what they don’t know.

Lorraine Love
Right

Danny Abir
So when they start talking a lot of times adjusters move them in a direction where they will say something that they are going to get denied because of something that is…

Lorraine Love
Right, because they don’t know what they can say and what they can’t.

Danny Abir
Exactly, and it’s not about lying, it’s about the way the insurance adjusters question them and try to push them in a way that they deny it. So I see that as one of the biggest pitfalls I want to ask Terry, Alex, and Amy each one of them what they think is the biggest pitfall for insurance when they’re dealing with their own claims.

Terry Bailey
I think it’s just what Alex alluded to he talked about a moment ago is this. You’re not on a level playing field. And as you just mentioned most insureds don’t really understand all the coverages that they have. And that brings up another point the insurer actually has an affirmative obligation to inform you of all available coverages and frequently adjusters do not do that.

Lorraine Love
Really?

Alex Cohen
And even if they do put it in writing like they’re supposed to, but then, as the policyholder gets it and reads it, I can almost assure you that what the reading is basically in their policy. Again if you don’t know how to read your policy and understand that and what coverages and rights you have, again you’re at a disadvantage. But going back to what Danny was saying there are a lot of policyholders that don’t know what’s important and they say stuff that is completely wrong like they’re not the experts in this situation.

Lorraine Love
They say something that leads him in a different direction than you’re going. “Oh my gosh, I don’t know if I meant to say that” or because we don’t know.

Alex Cohen
Or they don’t say the important stuff and they leave the little things out that should be stated, that makes all the difference to getting coverage. So, I think those are the pitfalls.

Danny Abir
Amy, we have two minutes before this segment is over how about you?

Amy Bach
Yeah. Again it’s this idea that we’ve touched on which it’s related to not being on a level playing field. But it’s also that people have this mentality about what the process is like based on all the ads they see, right? So they think “oh you know I’m in good hands” and that they think they can be passive and that the insurance company is going to do the right thing. And we know from our work that’s not true, that it’s a business negotiation and you’re not on a level playing field so the very important thing for people to realize is you can give the insurance company a chance to do the right thing and you should. But don’t be a pushover because it isn’t like the commercials say. It’s up to you to enforce your rights, get help when you need. And then to a certain extent prove your own loss so that you know you get a fair settlement.

[Danny Abir
OK. I want to say thank you to Amy for us.

Lorraine Love
Thank you, Amy.

[Danny Abir
As our guest, I really appreciate everything that you do and thank you for giving us your time today on a Saturday on a weekend. And I hope to be able to do this again and invite you again to another show so we can all benefit from your wisdom. Thank you again.

Amy Bach
Thank you. I’m glad you guys are out there fighting the good fight.

Lorraine Love
And same to you as well. We’re going to take a quick break but when we come back we’re going to continue our conversation with our guest attorneys Terry Bailey and Alex Cohen. We’re talking about fire insurance claims, so if you have any questions about this and we may be talking about I think property damage in this segment as well. So if you have any questions go ahead and give us a call at 800 2 2 2 5 2 2 2. This is the ACTS Law hour with your host Danny Abir and me Lorraine Love on talk radio, 790 KABC.

4th Segment

Lorraine Love
We’re back, before the break we were talking with our guest attorneys today Terry Bailey and Alex Cohen about fire damage claims. We also want to talk to you about any sort of legal questions you have, construction damage, whatever it is. Give us a call. The number here is 800 2 2 2 5 2 2 2. And here he is your host Danny Abir along with me Lorraine Love on talk radio, KABC 790.

Danny Abir
Well, the topic of dealing with insurance carriers and damage to properties is one that we could literally talk on every single session that we come here and they would not be ending, I mean one of the conversations Alex and I were having during the break, was that what Amy said is true insurance. The insurers are passive when it comes to their insurance companies, and that basically creates a dynamic that people are at a disadvantage automatically. But because of the fact that there’s so much information, so much to talk about when it comes to dealing with insurance companies, I want to leave that for another session that we’re talking about, but right now because we have Terry here I want to talk about construction defect because I have made you a promise.

Lorraine Love
Yes, you did.

[Danny Abir
Last week, you had a construction defect question and I said I’m going to bring the expert in construction defect so you can ask directly from Terri what your question is.

Lorraine Love
And Terri, you used to be a contractor correct?

Terry Bailey
Yes. A number of years ago, but that’s true.

Lorraine Love
OK perfect so you know. All right.

Danny Abir
Well, when you were 18 right. Like 5 years ago?

Terry Bailey
Yeah, or something like that. That’s such an advantage to be a contractor and have that knowledge and experience and be an attorney. It’s incredible.

Lorraine Love
Oh yeah. Ok, so I bought a house at about four and a half years ago. Brand new construction and everybody in our development are having and, I can’t say, everybody, a lot of people in our development are having issues with their fireplace, so I sold the house and the only thing on the inspection walkthrough was the fireplace. So in order for me to close escrow, I had to try to get it fixed. So I went to get it fixed and I’m having an issue getting it fixed. So, we had to hold back $2,000 dollars in an escrow account so that we can make sure it gets fixed. I am already over a thousand dollars in it trying to get this fixed. And as I’m talking to my neighbors oh my fireplace never worked right. My fireplace never worked right. So my question is what do I do?

Terry Bailey
Well, there’s a lot in that question because some folks may think well, I sold my home so I don’t have any standing to go back to the contractors and developer of the home but that’s not true. Since they’re holding back your money, you still have those rights.

Lorraine Love
Right.

Terry Bailey
So, but to get to the actual procedure there is a pre-litigation procedure unfortunately that you have to go through before you can file a lawsuit. So you put the builder on notice of your claim.

Lorraine Love
OK.

Terry Bailey
There’s a lot of statutory time limits in there that we don’t have time to get into, but they have a certain amount of time to respond and provide you with information and then they can make an offer to repair. So while I’m not a huge fan of the pre-litigation procedure and the offers to repair, because in my experience it’s the procedure has simply been used to slow the process down. But, I would send the builder what it’s called a Notice of Intent to commence legal proceedings.

Lorraine Love
OK.

Terry Bailey
And then, they have to come out and inspect alternatively because you’re talking about something that may only be a couple of thousand dollars. You can make a warranty claim with the builder as well. But in all likelihood that would go nowhere. So I would start with the notice of intent to commence legal proceedings.

Lorraine Love
I called them and like when all this was going down, I called them and I said, you know, every home is having problems their fireplaces, like what’s going on with this, and they’re like: “yeah, no you’re you’re done, you had a year to tell us about that”.

Terry Bailey
And that’s generally the problem with the warranty claims and you know the other issue here that’s sort of in the background is it may not be a huge issue. I mean as far as it’s not going to cost one hundred thousand dollars to fix or anything like that. So it’s difficult to perhaps find an attorney who’s going to represent you on a claim that’s only for a couple of thousand dollars but on the other hand, if the defect is project-wide, right then you may have a class action. Something like that can be considered.

Danny Abir
OK, we have Dave in L.A. that has a question from both Alex and Terry regarding making an insurance claim to the insurance company.

Lorraine Love
Hi Dave.

Danny Abir
Hi Dave.

Dave
Hi there.

Lorraine Love
How are you?

Dave
Oh, I’m good. Here’s my question. Suppose the insurance company says “okay we’ll pay off and they pay you”. Two part question: One, do they just write you a check or is it a graduated thing, are there procedures to be followed when rebuilding? And the second part of the question is can you just take that money and walk away?

Lorraine Love
Well, that’s a good question.

Alex Cohen
Both of them are great questions. In a first party insurance claim meaning a claim that you file against your own insurance carrier. They have to write you a check for the undisputed damages when they know they owe it. So, yes they have to write you a check. There is no release accompanied by that. Like when you’re filing a third party action which is against any negligent party.

Lorraine Love
Right.

Alex Cohen
Here we don’t have that. So in insurance claims the insurance carrier has to write a check for that undisputed damage without a release, and then that check if you have a mortgage holder on it, is going to also list your bank on it,  and if a bank signs off on it, then you have the cash. You can do with it what you want. It’s your property. You may choose not to do the repairs right now. You may hold off on repairs and do it subsequently. But that claim is open for a certain period of time.

Lorraine Love
OK.

Alex Cohen
There is a statute of limitations. You have to know how to calculate that which is another reason why an attorney has to get involved in these type of situations to consult. But if you do construction on your cost of repairs is in excess of what you’ve been paid. You want to alert the insurance company that this is costing me more and you make a supplemental claim to the insurance carrier so that you can get paid additional money on the damages that you were out-of-pocket.

Lorraine Love
I have a quick question, with that in mind. So if there’s a mortgage on the house, if you owe let’s say you owe $400,000. Does that get paid off or does the mortgage continue to go just like normal?

Alex Cohen
Mortgage continues to go as normal. But the banks because they have to Lien on their property, the mortgage Lien, they want to make sure that the property is repaired.

Danny Abir
OK, Dave does that answer your question?

Dave
Can I do a follow-up question on that?

Danny Abir
Sure. Of course.

Dave
Suppose that you cleared with a mortgage, your house burned down and you decide I don’t want to do this anymore I’m going take the money and just go away, can you just do that?

Alex Cohen
You can do that. But you still have your mortgage. You still have your mortgage that you’re responsible for and you’re on the hook for. Are you saying if the mortgage paid off?

Dave
Yes.

Alex Cohen
If the mortgage is paid off and you’re getting paid for the structure and you don’t want to rebuild anymore that’s your prerogative.

Dave
Ok, that’s great!

Lorraine Love
So you have a piece of land.

Danny Abir
Florida here we come.

Alex Cohen
Yeah, you will have a piece of land, unimproved land. And you can sell your land if you want to. And you know, that you got paid for the structure. That’s fine.

Dave
OK, great. Thank you.

Lorraine Love
Does that answer your question, Dave?

Dave
It sure does.

Lorraine Love
Perfect. Thanks so much for calling in.

Danny Abir
Thank you. Hope you have a great weekend.

Danny Abir
So let’s go back to Terry. I’m trying unless you haven’t noticed, I’m trying to maximize our use of Terry in this case, on this show, because we don’t get to have him here very often.

Lorraine Love
I know.

Danny Abir
So when it comes to construction defects that’s one of the things that a lot of people don’t know right now is what do they do. Under what circumstances is considered construction defect. What statute of limitations they have to deal with. How far back they can go. What are some pitfalls or things that people should know about that will empower them in situations where like that and we have two minutes before the show is over so you have one minute to answer.

Lorraine Love
No pressure Terry.

Terry Bailey
Well much like Amy was talking about a moment ago with insureds. Don’t be passive if you are a homeowner in Los Angeles you have undoubtedly spent a great deal of money for your home. Probably the single biggest investment of your life. Be proactive. So, for new construction at the very outside there is a statute of repose of 10 years for what are called latent defects. That means you have up to 10 years to bring an action forward for Latent Defects as opposed to Patent defects. Patent defects you generally have three to four years depending on the circumstances, and if you discover a Latent defect is obviously something that’s hidden it could be faulty grading that four or five years after you purchased the home, your home starts to shift or sink or move. It could be a leaking roof, leaking decks, leaking windows, which in Southern California it rains about once every eight years so you don’t really know that you have those problems until we get some significant rain. But to point something that’s critical to pay attention to with respect to the 10 year statute is you only have three years from the date you discovered the latent defect so if you discovered the latent defect in year 5 you cannot wait until year 9 to pursue an action you only have three years from the date of discovery. We refer to that as the rule of discovery.

Danny Abir
Or alternatively, come Monday morning everywhere pick up the phone and call Terry for questions because we have the time, we have two things one is #GoSeeAlex and yes we have Call Terry for questions regarding construction defect. I want to thank Amy Bach as our guest attorney who came on board from United Policyholders to help us with some us on the topic. I want to thank Terry and Alex for taking time on Saturday to come in and talk to us about insurance and construction defect and want to thank Lorraine as usual for being my co-host of the show. This is Danny Abir and I’ll talk to you guys next week.

Lorraine Love
Perfect. Thanks for joining us today of the ACTS law hour. Knowledge is power and power is knowledge and I hope we’ve empowered you today. Tune in every Saturday at noon to hear more from our friends at Abir Cohen Treyzon Salo the ACTS LAW hour. For more information from our stellar team of lawyers you can find them at ACTSlaw.com that’s A C T S LAW. Thank you to Danny Abir our host and thank you for you for listening to us. We hope you have a wonderful rest of the weekend. I’m Loraine Love and you’re listening to TALK RADIO KABC 790.