A team of attorneys and consumer advocates will be in place by week’s end to investigate complaints by hundreds of victims of last fall’s Southern California wildfires that their insurance companies underestimated repair costs or haven’t provided timely payments.
State Insurance Commissioner John Garamendi said April 26 that a “strike force” will review complaints to determine whether the companies are violating the state Fair Claims Practices Act, which is intended to guard against unfair insurance practices.
The team will order audits of company records that show patterns of questionable practices, he said.
Garamendi said the team is a response to complaints raised at three public meetings he held last week in San Bernardino, Ramona and Scripps Ranch.
A fourth meeting, at an El Cajon church campus, drew about 275 people on April 26, many of whom lost homes in Harbison Canyon, Alpine, Pine Valley and Lakeside. Garamendi urged them to file formal complaints with his department so that the new team could investigate.
He said other steps include expansion of a mediation program, created after the 1994 Northridge earthquake, to help fire victims process claims.
That program will now include the issue of underinsurance, in which a policy’s monetary limits for replacing a home fall short of actual replacement costs, Garamendi.
“I believe we’re going to find agents who purposely underestimated the cost of reconstruction, computer programs that mistakenly underestimated the cost of replacement, and we’re going to find computer programs that did not properly estimate the cost of inflation,” Garamendi said.
Don Halte, 64, of Crest, lost a 2,000-square-foot home he built himself in the 2003 wildfires. He said he’d had five adjusters on his claim. The first one came from Oklahoma, he said, and seemed helpful until he received the adjuster’s replacement figures.
“I thought maybe the gentleman from Oklahoma thought I was going to rebuild in Oklahoma,” Halte said. “I thought the replacement meant replacement.”
Representatives from insurance companies urged the angry homeowners to talk to them after the meeting.
“We do want to hear what you have to say. We are here to listen,” said Mark Toohey, assistant vice president of Farmers Insurance Co. “It hurts for us company representatives to sit back and hear the stories that you tell.”
Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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