House Burned Up -- Anyone Know about Insurance?

[CurlyDave]

My insurance company is moving at a snail's pace.

Someone pointed out that this was a public forum and I decided to not give away my strategy for dealing with the issues.

What I can say, is that the situation has become more complex. We got back the report from the fire investigator and he clearly states that the most likely cause of the fire was the candles lit by the real estate agent.

So, State Farm will have to pay me according to the policy and then they are going to sue the RE agent and she will turn this over to her insurance. Also, since the policy will not cover the total loss, I am going to have to make a claim against the agent, and this will also get turned over to her insurance company. I already started this process.

Her insurance has already denied the claim, but this is just legal maneuvering. I have talked to two separate lawyers and they both say that with the fire investigation report, the RE agent's insurance will have to pay unless they can find a legal reason not to, which I doubt.

But, in order to get them to pay, I need to have a lawyer sue. As a practical matter they are not going to pay unless I do that.

Right now the problem is that neither lawyer I talked to was willing to take the case as a contingency. Our economic situation is that I retired about 18 months ago, but DW is younger and her sentence isn't up for about another year. If I were still working, we would be able to pay up front for a lawyer, but between the stock market crash, my feeling that there is a lot of inflation coming, and the general recession, we just aren't willing to spend any more of our reserves on a lawyer where we might not get anything at all back.

We will get enough from State Farm to rebuild and sell the house, and are looking at anything we might recover from the RE agent as "replenishing our reserves".

The RE agent's insurance did tell us that the statute of limitations for filing a claim against them is 3 years from the date of the fire, which would be November of 2011. So there isn't a big hurry on getting a lawyer.

I am heading from CA up to OR tomorrow to take care of a few things there and chase any potential squatters out of our house there. Probably take care of my tractor withdrawal problem also, even if I just drive it around the property without actually doing anything.

When I get back, I will start looking harder for a lawyer. A consideration is that if we wait until State Farm pays on the policy, a lawyer working on contingency will only be able to charge a percentage of what we actually get from the RE agent's insurance, while if I get one immediately, he will want to charge a percentage of what both my insurance and the RE agent's insurance pays. So waiting until I get a settlement from State Farm has some logic behind it.

 

[2manyrocks]

....The RE agent's insurance did tell us that the statute of limitations for filing a claim against them is 3 years from the date of the fire

The first thing to do is to independently verify the SL with your own lawyer and not trust the RE agent's insurance co. They would like to see you miss the SL deadline. Or maybe the RE agent's insurance company will enter into a "tolling agreement" to hold up the running of the SL until a specific date.

Should be able to hire a lawyer by the hour for the suit against the agent cheaper than paying a contingent fee. Are they asking for 1/3?

Is there any question about the present or future solvency of the RE agent's insurance company?

The contingent fee agreement can exclude your settlement with your homeowner's policy. It's a matter of negotiation with your lawyer.

If you file suit today, when would the anticipated hearing date be in your location? If you wait 3 years to sue, when would the anticipated hearing date be? Do you still want to be in litigation at that point in your life?

 

[CurlyDave]

Should be able to hire a lawyer by the hour for the suit against the agent cheaper than paying a contingent fee. Are they asking for 1/3?

So far I haven't found anyone to work it as a contingency. I am anticipating that when I do they will want 1/3 if it doesn't go to trial, maybe 40%+ if it does. While it should be less to hire by the hour, there are two problems with that. First is that it might not be. I have hired lawyers before and at $250-300 per hour the fees can get right up there in very little time. If I agree to pay, I have to pay as the hours are incurred. If contingency, the payment is at the end and is from someone else's money. The second is, and I have personally experienced this, if a lawyer I am paying up front makes a mistake and it costs me money, I still have to pay him. Even if I get less that his costs. If he is on contingency, he doesn't make as many mistakes, because he loses too. And if he still makes a mistake, I never get a negative result.

My situation is that I can accept getting nothing, and it won't be a problem, but having a negative result will be a problem. Between the recent stock market problems, and the low-probability event of the house fire, my risk tolerance is nearly zero.

Is there any question about the present or future solvency of the RE agent's insurance company?

The way this usually works out in CA is that if an insurance company is about to go belly up, the state insurance commission strongarms another company into taking over the weak one. The company in question is Hartford, and just today one rating agency downgraded them.

Evidently, in our county, the courts have had a fast-track program for liability claims for for several years. They want the proceedings to be settled within 18 months of filing, and will bring strong pressure on insurance companies to do this. Think major league financial penalties.

I anticipate filing within 3 or 4 months, certainly in 2009, not 2010.

 

[rox]

Dave,
Thanks for the update. What I was wondering about though, is how did that adjustor work out for you. I had never even heard about a public adjustor before your thread so I was jsut kind of wondering if that went okay for you. To bad you don't have somehting to trade. One of our attrney's did a foreclosure for us with payment in olive oil. My husband used to swap gift certificates and dinner parties for plumbing work when he owned his restaurant. To bad you can't find an attorney who would like a rocket designed for him Seriously though if you have got somehting that you can trade attorneys will look at it, they all seem to fancy themselves as wheeler dealers. If you have something don't be shy at all about suggesting it. Good uck to you and let us know when your own insurance company finally settles up with you. I went and looked at your first post to check the date and in your first post you say this happened two days before Thanksgiving, you are over 3 months now I bet the whole process is starting (or has) become very annoying. If I were in your shoes I must confess I would be very impatient right about now.

 

[CurlyDave]

The public adjustor is still on the job and he seems to be working out well.

As far as the time goes, this is one of the ways the insurance company wears you down. Most people don't have the time to spend on their claim and end up settling for too little, just to get it over with. Since I am retired, I have the time to spare.

One of the things I did was to insist that they rent me a replacement house to live in while mine is being repaired. This is in the policy, so no matter how much they tried to get out of it, they couldn't. This is a very expensive area, so the rent is $3900 per month. Part of my strategy is that they are paying that every month and they know that a delay now adds to the time to rebuild, so they have an incentive to go faster.

 

[2manyrocks]

In Tenn., I think the SL would be one year to sue the realtor. You don't want to let the SL pass.

Sometimes to get people's attention, you have to file the suit and to really get their attention, also serve discovery immediately upon filing the suit so they can't just file an answer denying liability and continue to drag it out. The defendant's strategy is to drag it out as long as possible and then settle for as little as possible.

The level of willingness to take the case also depends on how big a recovery is anticipated. If the lawyer has to do months of work to recover $20,000 of which he gets $8,000 for example, some lawyers would rather take a bigger case.

What a great way to spend your retirement?

 

[ultrarunner]

Dave, my Brother and Sister in Law had a similar case where the insurance of the responsible party denied the claim... My brother and his wife spoke to several lawyers and those that were interested either wanted to be put on retainer or wanted up to 40% of the settlement.

My brother is a smart guy, but no legal experience. He paid a lawyer acquaintance of mine $250 for a consult and to help him prepare the filing against the responsible party.

My brother filed the suit in Alameda and lo and behold, all of a sudden the insurance company was contacting him... the same people that wouldn't return his calls before...

My brother told the insurance adjuster that he had always regretted going to law school and was looking forward to presenting his case to a jury of his peers and made a point to explaining how the insurance company had totally ignored him over the past 9 months... and was anxious to start discovery...

The insurance company settled in two weeks for 80k... the amount of the property damage...

Don't know if any of this will apply... the one thing my brother had going for him was his enthusiasm and the fact he was only spending his time as opposed to the other side paying lawyers and such...

Brother's total attorney fees: $250...

Other side, unknown, $250 probably didn't pay for an hour of their guys time....

 

[CurlyDave]

Well, bringing this thread back to life, I can now see light at the end of the tunnel.

My insurance company just sent a check for the "undisputed damages" , which ends up being only about $60k under the total I think I could get given policy limits and special coverages for this, that, and the other thing. They are also in agreement that building permit, architect/engineering, and code upgrades are their responsibility, so the real amount left on the table is down around $30k or less.

We are going to fight for maxing out what can be paid. They have adjusted the claim based on their belief that damaged structural members can be repaired by CO2 blasting and painting. The Town building department has issued a directive that "no charred or fire damaged building materials can be reused". Which essentially means tear down the entire house to the foundation and start again.

This is fine with me. Since I have the house up for sale I am going to have to disclose the fire and rebuilding. In some ways a new house on a 20 year old foundation is better than a completely new house. All the settling that foundation is going to do is well in the past.

Anyway, a major start to a new project.

 

[EddieWalker]

Dave,

Thats great news!!!! Did the adjuster accomplish this for you?

Eddie

 

[CurlyDave]

Thats great news!!!! Did the adjuster accomplish this for you?

Hard to tell, but I am convinced that without the Public Adjustor, I would have received only about half of the current settlement offer. Plus, we are going to go after every last penny available from the policy.