December 12, 2007

1. SoCal 2007 Wildfire
SoCal 2007 Wildfire
Roadmap to Recovery:
Roadmap to Recovery:
Legal Issues & Scopes of Loss
Legal Issues & Scopes of Loss
December 12, 2007
December 12, 2007
Rancho Bernardo Community Presbyterian Church
Rancho Bernardo Community Presbyterian Church
www.unitedpolicyholders.org

2. Disclaimer:
The information provided here is intended for general
educational purposes and should not be construed as
legal advice.
Today’s speakers are invited speakers volunteering their
time as educators.
Neither United Policyholders nor the Rancho Bernardo
Community Presbyterian Church endorse or warrant the
presentations or services of any volunteer speakers.

3. Underinsurance 101
If the dollar limits in your policy will not cover the cost of
putting you back where you were before a loss,
you are underinsured.
As many as 90% of those who suffered loss in Firestorm
2007 may be underinsured in one or more categories
(dwelling, contents, ALE, other structures, etc.)
Strategic negotiation and litigation are your two main
options.

4. Underinsurance is a challenging problem
and there is no “one size fits all” solution
It is such a common problem after large- scale disasters
that UP has an entire section of our website devoted to
the subject.
UP’s Executive Director is in active discussions with the
CA. Ins. Comm’r, private attorneys and insurer
representatives to help 2007 wildfire survivors who are
underinsured.
Go to the "Claims Tips“ section at www.uphelp.org and
find "Underinsurance Help“

5. Your policy is a legal contract
It gives you and your insurance company rights
and responsibilities
Cooperation, documentation, investigation
Do not do any of the following without first
checking with an attorney who has experience
representing policyholders:
1) Sign "releases" or waivers
2) Give a recorded statement
3) Submit to an Examination Under Oath

6. Your goal is to be effective in
claim settlement negotiations
Insurance policies are contracts written by insurance
company lawyers.
Legal arguments can strengthen your negotiating
position.
Read the CA. Fair Claims Regulations and/or consult
with a lawyer to develop a strategy, and then use legal
advice and arguments to convince your insurance
company to change its position without getting involved
in a lawsuit.

7. Pace yourself and resist being
rushed or pressured
Insurers frequently extend policy deadlines and relax requirements
for proofs of loss
By law you have up to 24 months of ALE (LOU) benefits
The CDI may help you get time extensions if your insurer unreasonably
refuses
You may feel frustrated and powerless at times, but you are NOT.
The laws that protect you give you power.
A catastrophic insurance claim can take two plus years to get fully and
fairly settled

8. Create a paper trail, even if it’s
not your normal “m.o.”
Confirm representations and agreements in writing despite the hassle
Use your insurance CLAIM DIARY. Record everything between you
and the insurance company.
Write short, to-the-point letters to your adjuster outlining issues that
need to be resolved that are delaying settlement of your claim.
Put reasonable deadlines in your letters telling the insurance company
when you expect a reply. (i.e., “Please respond no later than fourteen
business days from the date on this letter).
Refer to the CA. Fair Claim Settlement Practice regulations as often
as they apply

9. Go up the chain of command
Write letters to your adjusters’ supervisors, their
supervisors, and even the President or CEO of the
insurance company. Follow up by phone.
Read the wording of the specific exclusions or limitations
that the insurance company is relying on.
Read the whole policy and whatever brochures or sales
materials you can get your hands on. You may find words
that show they promised or owe more benefits than
they’re offering.

10. Scope of Loss
WHAT: Defines, describes, details “as it was” dwelling loss
WHY: A foundation for settling dwelling claim
HOW: Should be independent/objective
- A scope of loss is not the same as an estimate
- A scope of loss should allow estimates to be prepared
and compared “apples to apples”
- A scope of loss is the basis for an independent, credible
repair/replacement estimate

11. Get independent estimates and
opinions on repairs
If insurance company adjusters or contractors
offer to settle based on computer-generated or
“lowball” estimates, get independent estimates
from qualified local builders or construction
professionals and read our FAQs.
Aim for estimates that can be compared side by
side with your insurers’ estimates.

12. Xactimate: Machine vs. Man
Most adjusters use Xactimate to generate
dwelling loss estimates and settlement
offers
Pricing often low, too generic
Estimates look good on paper but are
often inaccurate
Computers don’t build houses

13. Our heartfelt thanks to:
Tonight’s speakers
UP Mentors and Sponsors
The Rancho Bernardo Community
Presbyterian Church

14. Reserve slides

15. Did you know?
Under CA. law, your insurance company cannot require
you to use a specific professional to repair/replace your
property? Reg. 2695.9
Under CA. law your insurance company must give you
copies of estimates and other documents in your claim
file? Ins. Code sec. 2071 and Reg. 2695.9 (d)
Under CA. law your insurance company must respond to
your calls and letters within 15 days? Reg. 2695.5

16. Contractor scams are very
common after disasters
Before you hire a contractor, check their
customer references and their license
status online with the Contractors State
Licensing Board www.cslb.ca.gov
or call: 1-800-321-CSLB (2752)

17. Six basic steps if you suspect or
know that you're underinsured:
Step One: Calculate the total scope and amount of your losses in each major category: (Dwelling, Contents, ALE,
Other Structures, and Debris Removal). If your insurer sold you a “replacement cost” policy, your total losses are
what your coverage limits should have been.
Step Two: Remember and reconstruct as best you can the history of how your limits were set.
Step Three: Consult with previous disaster survivors and at least one experienced policyholder attorney with the
goal of getting a realistic assessment of your chances of convincing your insurer to pay more than your stated
policy limits.
Step Four: Choose your words carefully. Consult with an experienced policyholder attorney before allowing
your insurer to interview you, take your recorded statement or examine you under oath. Your own words can
unintentionally harm your chances of getting paid in full. Go to "Find Help" at www.unitedpolicyholders.org as a
starting point to find the right lawyer.
Step Five: Make a clear, written demand that your insurance company honor the promises it made to put you
back where you were before a loss.
Step Six: Go on record. File a complaint with the California Department of Insurance. Keep your complaint
simple and general. Don't go into specifics about your dealings with the agent/broker/insurance company. Identify
your company and the approximate amount of the shortfall.

18. Underinsurance RX “to do” recap:
Network with others insured with your same company
Visit “Underinsurance Help” at www.uphelp.org
Start at the “Find Help” section of www.uphelp.org to find
qualified professional help
Pursue all avenues to get the insurance company to
cooperate informally
If you have a strong case, use our civil justice system –
it’s a cornerstone of our democratic system.
If you do not have a strong case, pursue alternatives

19. Wildfire Presentation
Introduction to Gafcon
19

20. Competitive Bid Estimating
Litigation Support Estimating
20

21. Preparing a Scope of Loss
Estimate and Why
21

22. Documentation
22

23. Check List of Finishes for a Single Family Residence
EXTERIOR FINISH
Did/Does the exterior of the home have any siding?
If yes, what locations?
If yes, what species or composite (Wood composite, Cementitious, redwood, cedar or spruce)?
If yes, what style of siding (Totem, tongue and grove or lap siding?
Did the exterior of the home have stucco?
If yes, what locations and dimensions per elevation?
Did/Does the exterior of the home have any veneer installed over stucco?
If yes, what type - Brick, Stone, other?
If yes, what locations?
Does the exterior of the home have any wood trim?
If yes, what widths and lengths?
If yes, is the wood trim over stucco or siding, is it around windows and doors etc?
23

24. Quantity Survey
24

25. Develop Unit Costs
25

26. Smith Residence Date: January 1, 2008
1234 Front Street Estimated Cost of Replacement
Description QTY Unit Unit Cost Total
Wall Framing 2" x 4" Wood stud wall, exterior 2,750 SFSA $1.95 $5,363
2" x 4" Wood stud wall, interior 1,845 SFSA $1.95 $3,598
Blocking 4,595 SFSA $0.25 $1,149
1/2" CDX Sheathing with shear nailing 2,750 SF $1.30 $3,576
8" x 8" Exterior post 10 LF $15.25 $153
Subtotal-Wall Framing 2,731 SF $5.07 $13,839
26

27. Smith Residence Date: January 1, 2008
1234 Front Street Estimated Cost of Replacement
Description QTY Unit Unit Cost Total
Landscaping Amendments/Top soil 2,500 SF $0.60 $1,500
Ground Cover 500 SF $1.25 $625
Sod 2,000 SF $0.70 $1,400
1 gallon trees/scrubs 1 EA $15 $15
5 gallon trees/scrubs 100 EA $30 $3,000
15 gallon trees/scrubs 4 EA $125 $500
Specimen trees, 24” box 11 EA $300 $3,300
Specimen trees, 36” box 3 EA $750 $2,250
Specimen trees, 48” box 4 EA $1,500 $6,000
Sub-Landscaping $18,590
27

28. General Requirements
28

29. Smith Residence Date: January 1, 2008
1234 Front Street Estimated Cost of Replacement
Description QTY Unit Unit Cost Total
General
Requirements
Supervision Superintendent, part time 5 MO $3,250 $16,250
Safety & Fire First aid locker 1 EA $75 $75
Control
Safety equipment & supplies 5 MO $50 $250
Fire extinguishers 2 EA $150 $300
Subtotal - Safety & Fire Control $625
Temporary Temporary electricity 5 MO $150 $750
Utilities
Temporary telephone 5 MO $200 $1,000
Temporary construction water 5 MO $100 $500
Temporary Toilet 5 MO $175 $875
Temporary hand washing station 5 MO $200 $1,000
Sub-Total Temporary Utilities $4,125
29

30. Overhead
Profit
30

31. Building Plan Check and Permit Fees
Architectural and Engineering Fee
31

32. The American Society of Professional Estimators - ASPE
Forensic Expert Witness Association - FEWA
Forensic Consultants Association - FCA
American Association of Cost Engineers - AACE
32

33. Contact Maryssa Ptacnik with any questions at 619.231.6100 ext 1251
or email at mptacnik@gafcon.com
SAN DIEGO IRVINE LOS ANGELES
701 B Street, Suite 1600 San Diego, CA 92101
33
www.gafcon.com