Property Damage and Insurance: What Businesses Can Do About It

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Last Christmas, California experienced a wave of “smash-and-grab” crimes, with thieves making off with expensive goods in brazen nighttime raids. One instance in Los Angeles found at least 18 people breaking into Nordstrom Department Store and stealing thousands of dollars worth of merchandise.

For these and similar cases, businesses have no choice but to recover lost products and address property damage so they can get back on their feet. This is where the importance of insurance becomes even more apparent. With the help of an experienced lawyer, you can make the most out of your property damage claims.

Property Damage and Insurance

Property damage refers to physical damage to tangible property, such as chemical leaks on commercial real estate and car damage due to a collision. Whoever owns the property can file a claim against the person or organization liable for the damage—as long as it’s covered by your insurance, of course.

Most business insurance policies include the following:

  • General Liability Insurance – It covers third-party damage claims.
  • Business Auto Policies – It covers third-party damage claims on business vehicles.
  • Flood Insurance – It covers roof, plumbing, and equipment damage that leads to flooding within the property.
  • Commercial Property Insurance – It covers property damage due to unexpected events like theft and fire.

When getting or updating an insurance policy, it’s best to take the time to consider all possible financial losses. Evaluate the risks and costs carefully, then weigh them against the insurance premium you plan to get. Remember that your insurance coverage will help you recover faster from incidents that may endanger your property and employees as well as affect your profitability.

Why Claims Get Denied

Denied claims are common in the insurance industry, and the reasons for denial don’t necessarily necessitate bad faith insurance litigation. Some of these reasons are:

Underinsured Property

Your coverage must be enough to pay for the damage to make the claims valid. If the property has insufficient coverage, you can only claim its average worth. On a related note, if you’re eyeing property expansion, coordinate with your insurance company for possible policy revisions.

Failure to Comply

Failure to comply with policy terms and conditions can jeopardize your claim. For example, you stated that you have an alarm system to protect against theft, but you failed to turn it on, which led to a robbery or vandalism. The insurance company can then deny your claim.

What Actions to Take

If your property damage claim is denied, here are some actions you can take.

Prepare a Response

Consult a legal professional, and ask them to review the claim denial letter. After learning why your claim was denied, you can get a lawyer to assist with filing an appeal. They can help you prepare a response with compelling arguments and evidence.

File a Civil Action

If you feel that the denial is in bad faith and you’re positive that your case falls within the policy, you can file a bad faith insurance lawsuit against the insurance company. You can also file a tort claim and be eligible for punitive damages.

Hire Skilled and Experienced Lawyers in Los Angeles

Haffner Law provides legal advice and representation to help you with your property damage claim. Call 213-514-5681 to schedule a free consultation about your case today.


Four Common Types of Property Damage Claims

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You never have to pay the full amount of property damage when it’s caused by a natural disaster, an accident, an intentional action, or negligent behavior. You can always file a claim for residential property damage, commercial property damage, motor vehicle damage, or personal property damage.

Haffner Law breaks down the different types of property damage claims you can get compensation for.

Residential Property Damage Claims

It’s relatively simple to get compensation in the event of a natural disaster, like a mudslide or fire; your home insurance policy should cover this. If the property damage resulted from an individual’s intentional or negligent actions, you might have to go to court for it.

As long as you can provide strong evidence, the court is likely to award you with the difference in your home’s market value right before and immediately after the damage occurred. Alternatively, the court can appoint a reasonable cost of repair for the property damage.

Commercial Property Damage Claims

Business insurance protects you from a wide range of damages, including general liability and business interruption. Commercial property coverage is typically included in this. But there are cases when the insurer doesn’t hold up their end of the deal, especially if the damages are costly.

It’s best to talk to an experienced attorney about the cost of restoring your commercial property to its pre-loss conditions, and how much you can get out of your insurance policy.

Motor Vehicle Damage Claims

California traffic fatalities decreased by 5.1% from 2018 (3,798 fatalities) to 2019 (3,606 fatalities). Still, motor vehicle damage claims remain one of the most common property damage claims within the state.

The responsible party is obligated to pay you the current market value of your vehicle, or the total amount of repair costs. Otherwise, your auto insurance should include property damage liability coverage. Call your lawyer if the responsible property or your auto insurer won’t pay for the total cost of vehicle damage.

Personal Property Damage Claims

Home, establishment, and vehicular damages aren’t the only types of damage you can file a claim for. You may file a claim for any personal property that has been damaged or destroyed.

Before filing your claim, gather photographic or video evidence of the damage. It’s also best to leave the damaged property untouched until after it has been inspected by your insurance provider. From there, you should have an attorney to help you settle your claim and ensure maximum compensation.

Until when can you get compensation for property damage?

You’re entitled to compensation for the repair or replacement cost of damaged property, whether it’s real estate property or personal property. You can still claim compensation even after you’ve addressed the situation, but it has to fall within California’s statute of limitations.

The state has a three-year filing deadline for property damage claims, regardless of the type of property. This applies to cases when someone unlawfully enters your real property and/or causes damage to the structure or the physical land. It also applies to the loss or damage of any personal property.

You can file your claim within three years from the date the damage occurred. Any later than that, and you’ll have low chances of being awarded monetary compensation. An extension is possible if the person you’re filing a claim against is out of the state anytime within those three years, or if you were under 18 or lacking the legal capacity to make decisions at the time the property damage occurred.

Get legal counsel regarding property damage claims

In most cases, property damage claims will be between you and your insurance provider. Whether this is the case, or if you plan to sue the individual who caused the property damage, the best course of action is to seek legal counsel. A seasoned property damage lawyer makes sure you get every dollar you’re owed.

Haffner Law is always ready to handle your property damage claims and ease your legal burden. Call us today at 1-844-HAFFNER.

Understanding “Loss of Use” in CA Property Damage Claims

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Property damage in California is not always physical. The infamous case of Sombrero v. Scottsdale demonstrates this perfectly: Thee Sombrero, a nightclub venue, filed a “loss of use” property damage claim against its security provider’s insurer, Scottsdale Insurance Company.

The ruling of the appellate court on this lawsuit became a landmark case for property damage lawyers in Los Angeles and the rest of California.

Summary of Thee Sombrero, Inc. v. Scottsdale Insurance Company

When Sombrero’s security company committed a lapse that resulted in a fatal shootout inside the nightclub, the city revoked Sombrero’s conditional use permit (CUP) to operate as a nightclub. The business was forced to get a modified permit, this time to operate as a banquet hall.

Sombrero generated more income as a nightclub than as a banquet hall. Additionally, the venue suffered a diminution in value, i.e., the property’s market value went down because of the shooting that took place.

When Sombrero first filed the claim, the trial court ruled in favor of Scottsdale, agreeing that the losses Sombrero referred to are economic losses and aren’t covered by the insurance company’s policy.

Sombrero appealed, and it’s here that the appellate court reversed the initial ruling. The court stressed that the damages stemming from the loss of use of personal property refer to the business’s inability to use the venue as a nightclub, thanks to the shootout that resulted in the revocation of its CUP.

The court adds that the language used in the insurance policy contributed to its decision:

  • Scottsdale’s definition of Property Damage included “…loss of use of tangible property that is not physically injured.”
  • “Loss of use,” in the contract did not mean, “total loss of all uses,” which was the definition that Scottsdale used to justify their refusal to provide insurance coverage to Thee Sombrero.

The appellate court also ruled that the diminution of the venue’s market value can be used to measure the damages sustained from the loss of use of the nightclub.

Other Examples of Loss of Use Claims

For more context on how loss of use can work in property damage claims, read these examples:

– A coffee shop owner hired an electrician to repair a broken refrigerator. Unfortunately, the electrician accidentally knocked over and damaged the cafe’s espresso machine. Now this machine is a unique model and its parts take months to order. The cafe owner can calculate how much they could have earned if they were able to sell espresso-based drinks in the days when the espresso machine was out of order. The total is the measure of damages the cafe owner can file claim for.

– A drunk driver crashed into a tall tree one night. The tree got knocked down and fell right in the middle of the street. The next day, authorities closed the street while waiting for a removal company to clean everything up. Businesses along this road all had lower sales that day because the street was closed off to motorist customers. Owners can estimate their losses and file a reimbursement claim against the drunk driver’s insurance.

Consult LA-Based Property Damage Attorneys for Loss of Use Damage Claims

If you or someone you know incurred financial losses because of property damage, get in touch with our property damage lawyers in Los Angeles. Haffner Law’s seasoned attorneys can advise you on what to do, and whether you have a good chance at winning a loss of use claim.

Get fierce representation for your property damage claim. Book a consultation with Haffner Law today.

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Types of Property Damage Insurance Claims and Possible Benefits

Types of Property Damage Claims in Los Angeles Area

Property damage claims in California are tried in small claims courts. They cover a broad range of situations and property types, and they can progress from a simple insurance claim to litigation in court. When you are a customer who pays premiums for property insurance, you are entitled to file a claim when it sustains damages from causes that are covered by your policy.

Here’s a quick rundown of the property damage claims that are commonly filed in Los Angeles and the rest of California:

  • Damage to homes
  • Damage to businesses
  • Damaged vehicles
  • Personal properties (also known as “chattel”)

If the mediation or trial ends in your favor, you may receive a reimbursement on the cost of the repairs on your damaged property or receive a brand-new replacement. Your property damage claims attorney can explain each of these outcomes to you in further detail.

Properties and Inclusions You Can Include in Your Claim

Before you buy a policy and pay for its premiums, your agent should have discussed in detail the properties and events it covers and the other benefits you can enjoy.

Insurance companies often offer insurance plans specific to a type of property. For instance, you buy separate insurance policies for your house, car, jewelry, and business property. If you have a policy that has broad coverage, you may enjoy double benefits.

So when you seek compensation from your insurance company, or against those responsible for the damage to your property, you can either file a real property claim or a personal property claim.

  1. Real property claims – These involve insurance claims for damages to real estate and structural property (e.g., your house, business establishment, land, crops) covered by your insurance. Property insurance policies typically cover damage due to natural causes, vandalism, accidents, and acts of terrorism.
  2. Personal property claims – These are claims for all non-real properties, which may be tangible (e.g., artworks, jewelry, cars, furniture) or intangible (e.g., trust funds, investment shares, and stocks).

You should also review your policy and check if you’re entitled to receive benefits such as:

From homeowners’ insurance:

  • Compensation for additional living expenses
  • Debris removal
  • Compensation for repairs and parts replacement
  • Compensation based on your property’s actual cash value
  • Water and fire damage coverage

From auto insurance:

  • Alternative transportation service or rental reimbursement
  • Towing and road service
  • Medical treatment and hospitalization coverage
  • Coverage for theft, vandalism, windstorm, flooding, etc.

Against Whom Do You File a Property Damage Claim?

There are two possible scenarios in a property damage claim: you can file a claim from your insurance provider or against the insurance company of the people responsible for the damage to your property.

If it comes to light that the damage to your property was caused by negligence or malicious intent, you can file for the highest possible compensation from the other party’s insurance company. If the cause of the damage is natural calamities like a hurricane, tornado, sinkhole, or flood, your insurance company is the one that must step in and make good on their promises.

Unfortunately, insurers are also entrepreneurial entities: they look out for their business’ welfare. Their primary focus, therefore, is to try to get you to settle for a low reimbursement. You can also expect that they will look for reasons to deny your claim.

From Property Damage to Bad Faith Insurance Claims

When insurers begin to act in bad faith, you’ll need an experienced Los Angeles attorney specializing in insurance bad faith cases. Insurance companies in California can be intimidating to policyholders who are not satisfied with the claims benefits they receive. Therefore, you need an attorney who is just as fierce and will assert your right to receive the amount you’re entitled to get based on your policy.

Improve your chances of achieving a good outcome from your insurance claim. Get in touch with Haffner Law if you need assistance in both property damages or bad faith insurance claims. Call us at 213-514-5681 and receive a free consultation with our experienced lawyers.

(This is an attorney advertisement by Joshua Haffner)