A Look Into California’s Wildfire Insurance Denial Problem

Wildfire Damage Lawyer Los Angeles

About 26 million residents in the states of California and Arizona are under red flag warnings because of the recent wildfires in the area, according to CNN’s most recent coverage of these events. These fires have scorched acres of natural, residential, and commercial land and continue to threaten thousands of California homes as they spread.

While these blazes pose severe threats to human life and properties, some insurance companies may be backing off their services for residents in the state. Know all about these fires and why insurance claims for them are being denied.

State of the Wildfires

As of late November, there have been 6,402 wildfires in California for 2019. Here are the most significant ones in the year.

  • The Kincade Fire – This was the state’s largest wildfire in 2019, with over 77,758 acres of land razed in Sonoma County, and destroyed or damaged more than 120 structures. It started in late October and was declared 100% contained in early November.
  • The Maria Fire – This started in late October and burned 9,999 acres of land. The Ventura County Fire Department contained it on November 7th.
  • The Tick Fire – The Tick Fire charred 4,615 acres of land in the Santa Clarita area and raged from October 24th to 31st. One of the properties it completely destroyed was a family farm. The owners were only able to save 20 animals from their burnt-down property.
  • The Cave Fire – This brush fire in Santa Barbara County has threatened several residential communities, prompting evacuations. It has been mostly contained by rain and the efforts of the fire crews. At the time of this posting, it is still ongoing, and has already damaged 4367 acres.
  • The Getty Fire – This started in late October and took eight houses in Los Angeles. The Los Angeles Fire Department fully contained the blaze on November 5th, after it burned 745 acres of land.

Denied Claims

Despite eight wildfires ravaging the state this year, causing an estimated $80 billion worth of damage, a lot of Californians are still having their insurance claims denied. A report by CBS News found that insurance companies refuse to protect over 350,000 property owners in the state.

And the 33,000 people who were successfully insured before were barred from having their contracts renewed.  Insurers don’t want to provide coverage because they deemed the properties as too much of a fire risk.

These conditions are unacceptable, especially if you’ve lost thousands of dollars in property, or worse, your loved ones in a wildfire. This is why it’s crucial to hire a law firm that handles wrongful death and bad faith insurance claims. Companies that may have unwittingly started some of the fires with their equipment ,and insurers who deny claims or protection from wildfires must be held accountable.

Conclusion: The Way Forward

Wildfires are often unavoidable natural occurrences. As such, people who live in wildfire-prone areas must have their properties insured. Those who were denied coverage are now getting the Fair Access to Insurance Requirements (FAIR) Plan to protect their valuable homes. FAIR was explicitly created for individuals who are denied insurance because they live in high-risk areas. While this plan is only seen as a last resort, it gives owners peace of mind knowing that they’ll receive compensation for the items and properties they may lose in the event of another fire.

Get the Compensation You Deserve

If you’re one of the residents or business owners whose wildfire insurance claims were denied, speak with an experienced lawyer immediately. Haffner Law provides representation for those who were injured, lost their loved one, or had their property destroyed because of other people’s negligence. We offer our legal services in Los Angeles and neighboring cities.

Contact us at 1-844-HAFFNER or 213-514-5681 today for a free, no-obligation case review from an experienced lawyer.

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What You Need To Know About Contingent Beneficiaries for Life Insurance

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Like a will, a life insurance policyholder needs to keep documents updated to reflect changes in circumstance and to avoid problems with claims when the time comes. For the policyholder, the beneficiary designation requires checking to ensure those nominated are still legible and relevant.

When a primary beneficiary cannot or will not receive the insurance benefit, for whatever reason, secondary nominees become eligible to receive the payout. When filling out your beneficiary designation, you have the option to name contingent beneficiaries to accommodate this situation.

Read more to find out.

 What are contingent beneficiaries?

Contingent or secondary benefits are people, organizations or other entities identified by the policyholder as beneficiaries if the primary beneficiary refuses, cannot be located or is ineligible.

Minors can be named as contingent beneficiaries. However, they will need an appointed legal guardian who will receive and manage any payout until the child reaches 18 or 21, depending on state law. The policyholder can also extend the guardian’s management of the benefit until a later age.

 When can contingent beneficiaries receive the benefit?

Primary beneficiaries may become ineligible to claim life insurance benefits for many reasons. Out-of-date information, such as significant life changes of the primary beneficiary, including marriage, divorce or birth, can compromise their claim.

Another example is if the primary beneficiary is directly involved or is an accomplice to killing the policyholder to receive the benefit. Most insurance policies cover death by murder. This means beneficiaries still receive the insurance benefit if the policyholder was murdered, provided that they died after a two-year contestability period. However, if the primary beneficiary was directly involved or is an accomplice to the murder, then the insurance benefit will go to the contingent beneficiary.

 How many contingent beneficiaries can be assigned?

As with the number of primary beneficiaries, a policyholder can list multiple contingent beneficiaries. If the primary beneficiary does not receive policy payments, the named contingent beneficiaries will share the death benefit. Each recipient receives a percentage of the total sum as determined by the policyholder or the court.

A contingent beneficiary receives the death benefit as stipulated in the insurance policy for the primary beneficiary. For example, if the policyholder wanted the primary to receive a monthly sum for ten years, then the contingent beneficiary will receive it the same way.

 What to do for denied life insurance claims

Insurance providers may deny a claim for several reasons, including out-of-date beneficiary designations or if the contingent beneficiary is a minor.

If you have any concerns or find yourself denied what appears to be legally yours, seek a life insurance lawyer to assist you. The lawyer will review your policy, determine your eligibility and help you in your next steps.

Haffner Law is a trusted law firm in Los Angeles. We have helped countless people in their fight against wrongly denied insurance claims. If there is evidence that the death benefit of your partner or relative was wrongly denied, we can help you file a complaint.

Get a free consultation today. Call us at 1-844-HAFFNER (423-3637).

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Bad Faith Claim: Should You File for Tort Damages?

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When your insurer refuses to accept your claim after conducting an improper investigation on your property, it’s only right to sue them for bad faith. But while bad faith claims are usually contract damages, you may also get compensation for tort damages, such as emotional distress and economic losses. Here’s what you need to know about tort damages in Los Angeles and when you should file for it.

Your Responsibility as a Policyholder

Bad faith laws vary from state to state, but no matter where bad faith occurred, the policyholder is often asked to prove two things, according to legal information website FindLaw: that the insurance claim was withheld and that the reason behind it was unreasonable. You should have documentation regarding your insurance claim and papers or history pointing to how it was denied.

Work with a bad faith insurance lawyer to reinforce your claim that your insurance provider misinterpreted facts about your policy, failed to investigate according to set standards, was unable to respond to your claim within a reasonable time, or failed to give a proper explanation on why your claim was denied.

What the Research Says

A recent study called “Does the Threat of Insurer Liability for ‘Bad Faith’ Affect Insurance Settlements” showed that bad faith claims filed as tort yielded higher settlement amounts and reduced the likelihood of a claim being underpaid compared to non-tort cases. It found that the first time a court allowed the application of tort liability was in 1973, as part of the case Gruenberg v. Aetna Insurance Company. The California Supreme Court ruled that third-party claims and first-party claims are “two aspects of the same duty.”

From here, states who implemented tort liability soared through the early 70s and stagnated in the early 90s. Only a few places like New York, Virginia, and Minnesota haven’t applied bad faith tort yet.

The review, published in The Journal of Risk and Insurance 2014, analyzed automobile insurance claims for accidents in the U.S. from 1972 to 1997. It compared settlements before and after selected states like California enforced tort-based bad faith regimes. The results after tort-based regimes were enacted were significantly positive, according to the researchers. The percentage of claims settled under bad faith tort rose from just under 20% in 1973 to around 80% in 1997, according to the paper’s figures.

The researchers showed that being able to sue for tort damages gave policyholders more power when they’re going against large insurance corporations. It’s a viable option for the insured to take to get proper compensation from the damages caused by the denial of their insurance claim.

Should You Sue for Tort Damages?

If you’ve lost income from not getting treatment on time because of claim denial, sue for tort damages on top of your bad faith claim. However, you’ll need an experienced lawyer in Los Angeles to help you get the compensation you deserve.

Haffner Lawyers has experience in insurance negotiations and filing bad faith claims. We help clients recover bad faith damages like economic losses and emotional distress. We’re ready to work tirelessly to give you the value you’re owed according to the law.

Call 1-844-HAFFNER or 213-514-5861 now to get legal representation.

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Bad Faith: It Doesn’t Suffice to Simply Pay Policyholders What They’re Owed

Bad Faith Insurance Attorney Los Angeles

Can policyholders sue an insurance company for bad faith over the extent of coverage?

Generally, they shouldn’t be able to.

However, a recent decision demonstrates how an insurance company can still be held liable for bad faith over long durations of negotiations and stalling in the claim and payment process – even after it has voluntarily paid nearly all of what it owes the policyholder.

What Gives Rise to Bad Faith?

As we have discussed in a previous post, bad faith happens when your insurance company provides inauspicious responses to your claims. To brush up on our insurance bad faith knowledge, unfavorable responses to claims may include:

  • Failure to conduct a proper investigation
  • Unreasonably denying a valid claim
  • Providing an unrealistically low settlement amount
  • Rescinding (cancelling) your policy after you made a claim
  • Delaying the claiming process unreasonably

Some laws require insurance companies that act in bad faith to pay basic damage to the victim for having a claim denied. Given that the claim has been investigated properly and handled immediately, bad faith typically shouldn’t be part of the picture.

In some cases, it doesn’t suffice that an insurance company pays out compensation that covers compensation that addresses the damage. If the jury finds that the claim had been investigated poorly, or that the insurance company has failed to explain the process and its calculation of payments as well as complete payments in a timely manner; it may still be liable for bad faith.

Case in Point: Charter Properties, Inc. v. Rockford Mutual Insurance Co.

Szechwan Gardens was a restaurant operating within a rented Charter Properties-owned building. The building collapsed, causing Szechwan Gardens to be out of business for almost 49 weeks. Charter Properties’ insurance provider, Rockford Mutual Insurance Co., stipulated that the policies covered the collapse, but disagreement arose over the amount of the loss and lost rental income.

Rockford paid about $1.1 million to Charter Properties, but the latter sued, alleging that the actual losses were higher by about $600,000. While a jury agreed that the costs were indeed higher, but just by about $150,000. Rockford paid the rest of the amount awarded by the jury.

Almost six years after the loss, a separate trial was held on Charter Properties’ bad faith relief claim. This was because the plaintiff claims that it encountered unnecessary difficulties as Rockford withheld policy benefits. Rockford was said to delay and fail to complete its investigation, provide the policyholder with a loss calculation, and even unnecessarily delay the payments.

The court agreed Rockford’s stalling tactics, long negotiation duration, and delayed payments were unreasonable and vexatious conduct. This was after the insurance company has voluntarily paid almost 90% of what it owed.

The case teaches an important lesson: policyholders are entitled not only to fair payment but also to be paid promptly and given timely communication and investigation by the insurance company.

Is Your Insurance Company Acting in Bad Faith?

When your insurance company refuses to act in good faith, seek help from Haffner Law. Our seasoned bad faith insurance attorney based in Los Angeles will help you recover the full value of what you are owed.

Contact us at 213-514-5681 today or fill out the form below to receive a free, no-obligation case review.

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What is Insurance Bad Faith and What are the Grounds for a Lawsuit

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Insurance is intended to give you peace of mind. But when the tables turn and your insurance provider becomes the source of your distress, do you have a right to file a lawsuit?

When you file an insurance claim, the law states that your insurance provider owes you a duty to act in good faith. This means that the insurance company must not, in any way, attempt to escape its obligation to pay you or look into a claim, as these actions constitute bad faith.

Delving Deeper Into Insurance Bad Faith

Bad faith claims and corresponding lawsuits may stem from any or a number of actions or inactions made by the insurance company.

An insurance company’s applicable duties vary depending on whether the claim is considered “first party” or “third party.” A common example of a first-party claim is when an insurer writes insurance on a property that later on incurs damage. In such case, the company is required to look into the damage, determine whether the policy covers the damage, and pay the appropriate value for the damaged property.

In first-party contexts, bad faith happens when the carrier refuses to acknowledge the claim or has improperly investigated and valuated the damaged property. In rarer cases, bad faith can arise in personal insurance policies or life or health insurance.

In third-party contexts or with liability insurance, specifically, the carrier has two distinct duties. One, the insurance provider must defend a claim even when most of the lawsuit is not covered by the policy. The default rule is that the carrier must cover all defense expenses regardless of the actual coverage limit.

Two, the carrier has a duty of indemnification. This refers to the duty to pay a judgment obtained by a plaintiff against the policyholder, up to the coverage limit, given that the judgment is for omission or a covered act.

Dealing with Bad Faith Insurance: When is a Lawsuit Due?

Bad faith covers a broad range of transgressions. Here are some of the most common reasons insurance companies face a lawsuit for bad faith:

  • Unwarranted denial of coverage
  • Refusal to pay the claim without an investigation
  • Failure to conduct a reasonable investigation
  • Failure to come to a fair settlement when liability is established
  • Offering significantly less money compared to the true value of the claim to settle
  • Failure to confirm or deny coverage promptly
  • Failure to deny or pay a covered claim promptly

Bad faith litigation may result in an arbitration decision, a settlement with the insurer, or a verdict. Keep in mind that every case is unique. This is why when dealing with bad faith insurance practices, it pays to have the professional assistance of a reputable law firm that understands how insurance negotiations work.

Haffner Law has years of experience in navigating this complex area of the law. Let us help you take the necessary steps to recover the full value of your claim.

Schedule a free, no-obligation evaluation of your case. Call us at 1-844-HAFFNER or 213-514-5681 today.

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