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Insurance protection sought for wildfire victims

Thursday, October 25, 2007

Consumers Union Supports Emergency Insurance
Regulations in Wake of Southern California Wildfires

Consumer Group Offers Tips For Homeowners For Filing Insurance
Claims And Hiring Contractors To Repair Damaged Property

LOS ANGELES, CA — Consumers Union, the nonprofit publisher of Consumer Reports, urged California Insurance commissioner Steve Poizner today to adopt emergency regulations to prevent insurers from refusing to issue or renew homeowners insurance policies based on claims for losses stemming from natural disasters like the wildfires raging in southern California.
“Many California homeowners may have a tough time getting insurance or renewing their policies as a result of these latest wildfires,” said Elisa Odabashian, Director of Consumers Union’s west coast office. “We need to make sure that insurers treat Californians fairly and that homeowners have access to the insurance they need to protect their most valuable asset.”
In 2004, California lawmakers attempted to pass legislation to prohibit this practice following a series of wildfires in San Diego in 2003 that destroyed nearly 2,500 homes. Many homeowners affected by the fires lost access to insurance when their policies came up for renewal. The reform measure passed the Senate, but it was defeated in the Assembly as a result of intense opposition from the insurance industry.
Similarly, following hurricane Katrina, some insurers refused to renew policies in coastal areas of Florida and other states. Homeowners had to find other coverage, generally at higher rates. Despite the flood of claims related to the hurricane season a couple of years ago, studies show that insurance companies’ earnings are at all-time highs.
Consumers Union also published an online resource list and guide for homeowners affected by the wildfires with tips for handling insurance claims and working with contractors to repair damage to homes and other property.
For homeowners who have experienced a loss, Consumers Union recommends:
• Call your insurance company immediately to file a claim for damage to your home or automobile.
• If you can’t remember who insures your property, call your mortgage lender or bank for this information.
• Prevent further loss to your property. Insurance companies may not cover damage that occurs after your loss if you have not taken reasonable steps to protect your property.
• Document your losses by taking pictures and creating an inventory of your damaged or destroyed property and possessions. Keep this documentation in a safe place.
• Ask your insurance agent or company representative to assist you with your claim. Don’t be afraid to ask too many questions. Your insurance company will assign an adjuster to help you with your claim, at no charge.
• Do not throw away any damaged property until your adjuster says it’s OK to do so.
• Do not repair or replace your loss until your adjuster gives you authorization to do so.
• Be sure to keep careful notes of all of your conversations with your insurance company or anyone working for them. Note the date, time, name of the person you spoke to and what was discussed.
• If you have a question about your insurance policy or a problem with your insurer, contact the California Department of Insurance at 800 927-HELP.
For homeowners who need to hire contractors to make repairs, Consumers Union recommends:
• Avoid door-to-door salespersons who are peddling their services. It’s best if you initiate the contact with a potential professional you might choose to hire.
• Don’t rush into repairs. Consider all of your alternatives before repairing or rebuilding your property.
• Make sure you deal only with a licensed contractor. Verify a contractor’s license by requesting to see the contractor’s “pocket license” and by calling with the Contractors State Licensing Board at 800 321-2752, or visiting their web site at www.cslb.ca.gov to check on the contractor’s status.
• Make sure the contractor you choose has the proper insurance to protect you in the event that the contractor or any of the contractor’s employees are injured on your premises while performing under the contract.
• Get at least three bids from qualified contractors. Make sure the bids are for like services and materials.
• Get references from contractors who are interested in selling you their services. Call the references to make sure the homeowners are satisfied with the contractor’s work.
• Once you decide to work with a contractor, make sure that you get a written contract that details every aspect of the work to be performed, the type and grade of materials to be used, the dates for completion, the payment amount and when payment is due.
• Be aware that the down payment on a home improvement contract cannot exceed 10% of the contract price or $1000, whichever is less.
• A consumer has a 3-day right to cancel a “Services and Repair Contract,” but that right expires when work begins. Check your contract to verify whether you have a “Services and Repair Contract” or whether you are signing a regular contract.
• Make sure you keep all of your receipts and records of payments for work that was done.
• Before you give your contractor final payment for the work that was done, make sure you are satisfied with the job and that the building department has signed off on the work that was completed. Verify that all subcontractors and material suppliers have been paid.
• For more tips on dealing with contractors following a natural disaster, visit the California Contractors State License Board web site: http://www.cslb.ca.gov/
Norma Garcia or Elisa Odabashian: