October Wildfire Survivors File Class Action Suit Against Insurance Companies

May 5, 2004

A class-action lawsuit was filed on May 5 against
four major insurance companies who write homeowner’s insurance in
California. The lawsuit filed against State Farm, Allstate, Farmers
and Safeco, alleges that the insurance companies acted in bad faith,
committed fraud and engaged in unfair and unlawful business
practices by charging their insureds a full renewal premium for
their homes and personal property that burned in last October’s
Wildfires and no longer exist.

The lawsuit was brought by: Lavonne Luscombe-Schwab, a State Farm
insured; Pamela Gardner, an Allstate insured; Peter Gaffney, a
Farmers insured; and Robert Fine, a Safeco insured; all residents of
San Bernardino County and John Caliri, an Allstate insured, a
resident who lost two homes in Los Angeles County.

The plaintiffs are represented by attorneys from four of
California’s top plaintiff and insurance bad faith law firms:
Michael Bidart and William Shernoff of Shernoff Bidart & Darras LLP;
Jerry Ramsey of Engstrom Lipscomb & Lack; Tom Girardi of Girardi &
Keese; and Harvey Levine and Richard Huver of Levine, Steinberg, Miller
& Huver, who have been volunteering at fire victim outreaches all
over Southern California to provide highly sought after answers
about insurance policies and coverage.

“In effect, the insurance companies are selling snake oil-coverage
on homes they recognize no longer exist,” said Claremont attorney
Michael Bidart, who has been working with Los Angeles and San
Bernardino county residents

“It’s bad enough that we can’t get the insurance company to pay our
claim in a timely manner so we can rebuild our house, but for the
insurance company to charge us again to cover a home that isn’t
there-that’s just not right,” Gardner said.

Attorneys Harvey Levine and Richard Huver, who represent many fire
survivors in San Diego County, have heard that some agents threaten
and cajole policyholders into paying the full insurance
premium. “Some agents have basically told these already victimized
families to either pay the thousand-plus dollar premium or risk
complete cancellation of their homeowner’s insurance policy,” Levine said. “These tactics represent another layer of unlawful and
fraudulent conduct being perpetrated against policyholders by
certain insurance companies.”

The lawsuit, filed under California’s Business and Professions code
section 17200, was filed as a class action on behalf of all
California residents who have suffered a total loss of their home
and personal property and have been charged an insurance premium for
their home, personal property, and loss of use coverage for 2004
through 2005, at a time when the structure and property no longer

“These insurance companies are punishing fire survivors by charging
full premiums on their homeowner’s insurance when their homes don’t
exist and at a time when they need the extra money to rebuild their
lives,” said attorney William Shernoff.

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