Tag: property damage

Expert WitnessInsuranceWildfires

Camp Fire Disaster Causes Insurance Company Liquidation – Expert Witness

on December 7, 2018

Now that the fire is out, I expected to be done writing about this topic for the year. Alas, there has been another casualty of the fire, it is the Merced Property & Casualty Company.

Insurance companies receive premiums from their customers (policyholders) to insure against property loss, damage and other risks. Some victims of the Camp Fire, the worst wildfire in California history, will not have those claims fulfilled by Merced Property & Casualty Company.

According to the LA Times, as of December 3, 2018, a Merced County court, “gave California Insurance Commissioner Dave Jones permission to seize and liquidate the company’s assets. Now, the company is in the process of handing over policy and customer information to the California Insurance Guarantee Assn., or CIGA, which processes and pays claims on behalf of insolvent insurers.”

My understanding of the liquidation process is as follows: Merced Property & Casualty Company realizes they are in deep trouble, decide to skip bankruptcy, and ask the court to hand their operation over to the California Insurance Commissioner to clean up their mess. Per the LA Times, they have assets of roughly $23 million, but are expecting to pay out nearly three times that amount.

After policyholders fulfill their duty of paying premiums, they should expect to be insured against covered losses. As is often the case in mass disasters, insurance companies are ill-prepared and lack capital to fulfill their part of the bargain. Luckily for Californians, the taxpayers protect against such insurance company failures.

I reached out to one of our California insurance expert witnesses to get a better understanding of this insurance company liquidation.

Insurance Expert Witness Richard Masters

Richard Masters, CPCU, CIC, ARM, AAI, has more than 40 years of experience in the insurance industry. He is an expert on all aspects of property and casualty insurance and has testified in more than 200 trials in state and federal courts.

If you have a policy with Merced Property & Casualty Company, we hope this helps put your mind at ease. As I commonly do, I asked Mr. Masters several questions about the liquidation and he provided responses.

Nick: What happens when California regulators take over an insurance company?

Mr. Masters: They can either liquidate it or try to rehabilitate it. Rehabilitation usually involves getting another insurer to assume the book of business with the backing and help of CIGA. In the case of Merced I do not think it will be rehabilitated. First, I urge all customers of Merced to contact their insurance broker and immediately get a new insurance policy with a different carrier going forward.

Nick: Merced Property & Casualty Company didn’t even file bankruptcy. They claimed insolvency and are liquidating the company. What happens to the claimants?

Mr. Masters: The claimants will continue to make their claims with Merced and they should also contact CIGA to make a claim for benefits. CIGA can be contacted at 818-844-4300 or assistance@ciga.org. Make sure you have your homeowners or dwelling policy available. If you need to, contact your insurance broker to get copies of your policies.

Nick: There is some information that the California Insurance Guarantee Association. Is this like an FDIC for insurance companies?

Mr. Masters: Yes, that is a reasonable analogy. CIGA has three separate funds that they operate. The Merced collapse would involve the Homeowners Personal Lines fund. A liquidator will be assigned by CIGA and will administer the funds.

Nick: Will the claimants receive fractions of their claims as a result of this regulatory takeover?

Mr. Masters: Generally, CIGA will pay up to $500,000 for each claim but this depends on the terms of the policy and other factors determined by CIGA.

Nick: Any other information to provide to the public about the claims process through CIGA?

Mr. Masters: The claim process through CIGA is cumbersome and takes a LOT more time to complete. Claimants will need a lot of patience when dealing with CIGA.

In related news:

The ABA Journal reported today, “two law firms known for their class action practices have filed a new lawsuit that blames Pacific Gas and Electric Co. for the November fire that killed at least 88 people in Northern California and destroyed the town of Paradise.” Seven plaintiffs are jointly represented by The Edelson Law Firm and Lieff Cabraser Heimann & Bernstein.

This is just one of several suits blaming PG&E for negligently maintaining equipment which resulted in wildfires. It appears the plaintiffs have hit PG&E with a variety of claims including inverse condemnation, trespass, negligence, nuisance and more. One of the plaintiffs claims to be suffering from PTSD as a result of being stuck in traffic, while trying to flee the fire, and embers from fire-engulfed trees were hitting his car. He feared he “would be burned alive.” I might be suffering serious emotional distress as well.

Let us not forget, PG&E has already publicly stated that they may have to declare bankruptcy if it is determined they were responsible for the Camp Fire.

This is the last I will be writing about the Camp Fire for this year. However, given the continuing legal implications of this catastrophe, I expect issues of import will develop in the New Year.

Crisis ManagementInsuranceWeather

Hurricane Florence: Recommendations from Construction & Meteorology Expert Witnesses

on September 10, 2018

Hurricane Florence has rapidly expanded in Category 4 hurricane, with a strike expected to make landfall on Thursday. How can those in the path of the storm prepare?

If you’re like me, you are always a little skeptical of meteorological reporting. With that said, I live in California and have never experienced truly catastrophic weather, so I’m not a good “barometer” for the appropriate response. I would likely be the person on top of my house because I didn’t listen to the warnings — and, for that, I apologize in advance to search and rescue for my foolishness.

Do not let that happen to you!

The 2018 Atlantic Hurricane Season is upon us. According to several reports, there are a few hurricanes brewing in the Atlantic Ocean. The one to be aware of at this moment, is Hurricane Florence. The Weather Channel has excellent coverage for those who may be in the path of the storm.

As of this writing, The Weather Channel is advising citizens to Prepare Now: Florence Explodes from Cat. 2 to Cat. 4 in Just Hours. This post did not mince words. It warns that as of today, Florence is massive and dangerous, stating “Hurricane Florence has rapidly intensified into a Category 4 major hurricane southeast of Bermuda and is likely to lash the East Coast later this week with life-threatening storm surge, destructive winds and massive inland rainfall flooding in one of the strongest strikes on this part of the East Coast on record.”

It is true, that this may change and the storm may turn and remain at sea. From everything I read this morning, now is the time to prepare and anticipate Florence making landfall, rather than count on it remaining at sea.

As we have done before, I have contacted Experts.com members and asked them for some preparation input for those facing the storm. Forgive the brevity of some of these answers, but both of these members are on the East Coast and busy preparing for the impending hurricane.

General Contractor & Construction Expert Witness – John Minor

John G. Minor, President of Complete General Contractors, is a third-generation Contractor and licensed instructor certified by the North Carolina Department of Insurance. He is a recognized expert on the costs and applications necessary to repair buildings damaged by manufacturer, builder liability, water damage or intrusion, mold, or asbestos. Mr. Minor will be on the ground with the University of Florida Hurricane Research team. You can learn more about his practice at teamcomplete.com.

My questions to Mr. Minor were as follows:

Nick: What steps should property owners take to prepare for the landfall of Hurricane Florence?

Mr. Minor: Understand that if they choose to shelter in place they must have a strong residence or shelter that will not flood. Sage advice is to hide from the wind run from the flood.

Nick: What are the most common types of property damage from a hurricane?

Mr. Minor: Wind and flood damage from this storm. As a strong cat 3 or easy 4, residential shingle damage (see Saffir–Simpson scale). If the storm lingers and pulls Atlantic waters into the Carolinas, major flooding for the Tar and Cape Fear Rivers in an already swollen river system. Know your floodplain.

Nick: Is there anything homeowner’s can do to limit property damage from wind, rains, storm surge?

Mr. Minor: Remove potential projectiles and board up your home. Understand safe generator use.

Nick: Are there any preparations one should take that will benefit them in the case of a future insurance claim? For example, should a homeowner take pictures or video before leaving their home?

Mr. Minor: Document roof interior, exterior, and contents, including contents in an off site storage, with pictures and video.

Nick: What are your top recommendations to help property owners prepare for a hurricane?

Mr. Minor: TADD (Turn Around, Don’t Drown). There will be a lot of desire to move around the area after the storm. Flooding is a dangerous thing.

I had to look up the TADD acronym submitted by Mr. Minor. Take a look at this video from the NOAA and National Weather Service.

Meteorology & Weather Expert Witness – Michael Mogil

H. Michael Mogil is a Certified Consulting Meteorologist (M.S. Meteorology) with over 40 years of experience, nearly 30 of them with the National Oceanic and Atmospheric Administration (NOAA). In addition to working for the National Weather Service as a forecaster, researcher, and severe storm program manager, he also provided satellite training to many governmental agencies and hundreds of TV meteorologists. To learn more about his practice visit: weatherworks.com.

Here are the questions and answers from our meteorology expert:

Nick: Today’s reports putting Hurricane Florence at a Category 4, what type of weather should be expected if it makes landfall as a Category 4 hurricane?

Mr. Mogil: Based on coastal angle of attack, huge storm surge and water push ashore to the north of the storm’s track.  To the south of the storm, with winds coming from land to water, water levels will actually drop.

Obviously, heavy to excessive rainfall in advance of landfall, with rain continuing across large parts of the Carolinas and southern Virginia at least through Sunday night (and likely into early next week).

Nick: In your experience, what are the most common types of property damage experienced with a Category 4 hurricane?

Mr. Mogil: From winds, depending upon the type and quality of construction, anything from the loss of many roof tiles or shingles to the actual loss of the roof. Poorly constructed building will be damaged the most. Windows or patio doors, not boarded up, could easily be damaged by flying debris or suffer water intrusion as water is pushed under tracks.

From flying debris (of any type), window or building damage.

Falling trees (due to wind and water-logged soil) a high probability.

Nick: For those in the path of the storm, what do you recommend they do to prepare for the potential landfall?

Mr. Mogil: Listen to instructions of local officials. If one lives near the coast in storm surge inundation area, LEAVE!!!!!!!!! (yes, all those exclamation marks). If one lives in a mobile home or other weakly constructed structure, LEAVE!!!!!!! (more exclamation marks).

Nick: Some reports have indicated the storm may turn and remain at sea as it climbs up the East Coast. Should a citizen still be prepared to evacuate?

Mr. Mogil: Yes, those reports, as of now, are not correct.  National Hurricane Center forecasts are the ones to follow.  Reliable media sources will convey the NHC forecasts.

Nick: From a meteorological perspective, is there anything you think the public must know as the 2018 Atlantic Hurricane Season heats up?

Mr. Mogil: Today (9/10) is peak day of the season.  There are 3 Atlantic storms right now, and only one seems likely to strike the U.S.  Treat each storm as its own entity.

Nick: Please feel free to share anything additional that is not covered by the questions…

Mr. Mogil: I’d also say that if people do leave, package important papers (insurance policies, birth certificates, passports) in sealable plastic bags (Glad, Ziplock) and take these as they evacuate or go to shelter.

  • Charge appliances (cell phones, etc) and get gas before leaving.
  • Let loved ones in other places know what you are doing.
  • After the storm, deal with insurance quickly…get an attorney (and have the attorney get one or more experts onboard, if a lawsuit or mediation seems necessary).

 

There you go! Listen to the experts. Prepare, prepare, prepare! Be safe!

 

Expert WitnessInsuranceWildfires

California Wildfires: Property Damage & Restoration Expert Witness Insights

on August 1, 2018

As of this writing, the Carr Fire in Redding, is considered the seventh most destructive wildfire in California history. It is just one of 17 active wildfires in the state.

In the past week, California has witnessed an intense round of wildfires. As I sit safely in my office reading the news about those being evacuated, or worse, I cannot help but empathize. The wildfires last Fall had the same impact on me. In fact, the concern for others dealing with disaster compelled me to write this piece last year. It covers topics  of evidence collection and insurance policy review, in the aftermath of a California wildfire. The only goal was to provide useful information to those impacted.

The same compulsion to provide helpful information is felt today. Smoke in the Central Valley has been an awful, constant reminder, that many are losing their homes, businesses, and lives. Just 200 miles North of our office, citizens of Redding California are experiencing the Carr Fire. Yesterday, according to USA Today, the Carr Fire was claimed to be the “seventh most destructive” fire in California history. Here is some further information about the Carr Fire from USA Today:

“Firefighters from 16 states are aiding the effort. The state Department of Forestry and Fire Protection – Cal Fire – reported promising headway Tuesday on the most devastating of the blazes: the Carr Fire in and around this city of 92,000. The death toll here is six, including two firefighters. More than 170 square miles have burned and almost 900 homes destroyed, making it the seventh-most destructive fire in state history.

While 10,000 people were allowed to return to their homes Monday, more than 25,000 people remain evacuated. And the fire was only 27 percent contained.”

According to the Cal Fire fire map, there are 17 active wildfires in California at the time of this writing. That number does not include contained fires. Firefighters throughout the state have a massive job ahead. Also, the last time I wrote about California wildfires was December, 2017, which means fire season has just begun.

These annual wildfires take an extensive toll on California. There is the emotional cost for those who lose homes, businesses, and loved ones. Before the grief subsides, individuals and families have to start putting their lives back together, and this involves significant time and financial costs. Many have to work with insurance companies and government agencies in order to rebuild their homes and businesses.

An article this morning, from the Sacramento Bee, indicated the Carr Fire destroyed “1,236 structures and damaged 225 more.” Additionally, “2,546 structures are threatened.”

I do not pretend to have answers for those dealing with catastrophic losses. What I have is a giant database of experts with whom I can consult and hopefully provide valuable information for those in a difficult position.

Seeing the number of structures destroyed, damaged, and threatened, I reached out to one of our property damage and restoration experts.

Brian Spiegel – Property Damage and Restoration Expert Witness

Brian Spiegel, of Spiegel Property Damage Consulting and Forensics, is a licensed general contractor and expert witness in property damage and restoration. He is a Master Fire & Smoke Restorer and a Certified Fire & Smoke Damage Consultant. Mr. Spiegel and his firm have addressed the aftermath of wildfires in Arizona, California, and Nevada. He has been in the property damage and restoration business for more than 40 years. You can learn more about his practice by visiting his website: spiegelexpertservices.com.

As in past publications, I have provided Mr. Spiegel with a variety of questions. Below, you’ll find the questions and Mr. Spiegel’s answers.

Nick: For those fire-damaged structures, what are the most common types of damage?

Mr. Spiegel: There are many specialized procedures for wildfire damages inside the home and outside the home. Roof damage, damaged / burned structure, electronics, all the personal contents. An engineer may be required for structural repairs. An experienced restoration contractor to evaluate what is salvageable and what is not for both structure and contents. Replacement costs; structure, painting, flooring, cabinets, landscaping, etc.

Nick: Is there a particular restoration process for structures that are damaged from a wildfire?

Mr. Spiegel: Generally speaking, wildfires can cause a variety of damages depending on the homes or commercial buildings that are in close proximity to the wildfire. Structures very close to the wildfire can burn to the ground with everything in them. Other structures will have partial burns and suffer from the smoke ash and toxic chemical residues to both the interior and exterior structure, hardscape, landscaping swimming pool and automobiles.

Other homes, miles away, can suffer from all the airborne contaminates created by the vegetation, trees, brush, etc. As well as the toxic chemicals and smoke contaminates caused by burning homes and automobiles. Smoke particulates will attach to airborne pollution particulates that were in the air previous to the fire. Wildfires produce heavy winds that also put a lot of dirt and dust into the smoke mix. I have been involved in wildfires that produced large airborne burning embers (projectiles) that will hit a roof far from the actual fire and take a house to the ground in about thirty minutes. You often see homes completely burned down and many other homes around the house that were not burned to the ground, however, the surrounding homes are impacted by all the airborne particles and will require diligent specialized restorative cleaning by restoration companies that specialize in this work.

Nick: Does a property owner have to hire a restoration company, or is that done through insurance?

Mr. Spiegel: The property owner has the right to choose whoever they want to perform the work on their home and contents. The property owner should seek an expert company to assess their damages and prepare a cost damage estimate, that expert should detail what the cost will be to return the structure and property to pre-damaged condition. This is not work the insured can do themselves or hire a maid service to do. It requires specialized equipment and expertise.

Nick: For those destroyed structures, what is the post-fire process before a property-owner is able to rebuild?

Mr. Spiegel: Obviously the insured should immediately report a claim to their insurance company. The property owner should photograph all the damage to document their damages and the impact to their neighborhood. The insured should seek a licensed contractor with fire damage experience that can determine what may or may not be salvageable.

The contractor will have to determine what the house and building materials looked like previously. This will include what the interior structure was comprised of, as the goal is to return to the home to its pre-damaged condition or establish that monetary value. The insured can help with those descriptions and if any photos are available. Often property owners try to clean themselves and do all the wrong things, such as not using HEPA filtered equipment. There are many wrong things that property owners attempt to do themselves which will make things worse.

Nick: Do you have any suggestions for those with a wildfire destroyed structure?

Mr. Spiegel: Insured should find and expert in these kind of damages as this is not just simple cleaning work. In looking for a restoration contractor find a licensed contractor with certifications and experience relating to this kind of damage. Specialized restorative cleaning requires an experienced expert and specialized equipment.

Nick: Do you have any suggestions for those impacted a by a wildfire, regarding dealing with their insurance company?

Mr. Spiegel: Again, thoroughly photograph and document all the damage to everything inside and outside the home or building.

Nick: Is there anything else the public should know? Feel free to elaborate…

Mr. Spiegel: Make sure you understand the totality of your damages. Make sure to check the credentials and experience level of people and companies rendering opinions regarding all of your property. If you receive an estimate of cost repairs from your insurance company adjuster it would be prudent for you to investigate the scope and method’s the adjuster prepared.

After answering the questions I provided. Mr. Spiegel went on to elaborate on a few additional concerns. He added a bold text to his additional information and I have provided it in full below:

IT IS IMPORTANT TO UNDERSTAND THE FOLLOWING

Dangerous emissions come from wildfires; wildfires are a conglomeration of a complex mixture of particles, liquids and gases a number of atmospheric pollutants, dirt and dust. Air pollutants in the air prior to the wildfire such as diesel & auto exhaust particles etc. which agglomerate into wildfire smoke particulate adding to the mixture that impacts homes in the path of wildfire smoke.

The smoke is comprised of particles, liquids, gases, polynuclear aromatic hydrocarbons (PAHs are carcinogenic) volatile organic compounds (VOCs)

Wildfire smoke is the worst airborne pollutant, even beyond fossil fuel emissions. Wildfires cause much particulate matter (PM) to enter homes than normal pollution. Wildfire residue can cause more air pollution in two days than an entire year of normal airborne pollution sources.

 

I hope this information is helpful to those dealing with active wildfires and the eventual aftermath. Stay safe!