Southern Californians impacted by the mudslides that followed the devastating wildfires in Ventura and Santa Barbara may see some light at the end of the tunnel with the big question of whether insurers will cover their mudslide loss. Over the last few week Californians have lost their homes when the rains brought homes down from the mountainsides ravaged by fire. With the vegetation gone, the hills and mountains simply could not hold during the heavy rains and mud flowed downhill at 20 miles per hour at what witnesses can only call a “wall of mud” that consumed homes and lives within its path. For many, this meant losing all worldly possessions when their houses slid down the hillside and were buried in mud. Even the ability to rebuild in the area is a question for many.
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The buzz amongst policyholders about what insurance owe for additional living expenses due to the Northern California Wildfires is still going strong as Southern California braces this week for Santa Ana winds. With predicted gusts up to 70 mph, Southern Californians are in real danger of the potential for wildfires. Recently, I’ve received quite a few calls from victims of the Northern California wildfires asking what their rights are under their additional living expenses portion of their insurance policies. Most policies limit policyholders to one year of additional living expenses (ALE) or the reasonable time to rebuild. In the recent Northern California wildfires, California Governor Jerry Brown declared a State of Emergency which means that every policyholder with proper additional living expense coverage under their policy has an extension of an additional year for ALE.
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The recent fires in Napa Valley and Sonoma, California present numerous issues for homeowners and business owners alike when it comes to navigating insurance claims. Questions arise as to what coverages are provided under a given insurance policy, how determinations on what is owed are made, what are the options on rebuilding, loss of income

Insurance Codes are regulated by each state, but ask any insurance company representative in any state and they will tell you it is an insurance company’s duty to place the insured’s interest ahead of the insurance company’s interests; and the proper way to handle a claim is to find coverage wherever possible.
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I often hear the same complaint from clients: They feel the insurance company has undervalued their personal property after a loss and are frustrated by the insurance company’s valuation and rate of depreciation. The reality is that even when an insured has a “replacement cost” policy, the insurance company can depreciate personal property values because the majority of insurance policies contain language allowing insurers to depreciate the value and first pay out the “actual cost value,” which includes depreciation.
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Homeowners living in planned communities usually have governing documents that mandate the individual home or condominium unit owners carry their own insurance in the event of a property loss. While unitholders in these communities pay monthly or yearly dues so the main association (HOA) can take care of the common areas, part of those mandated payments usually go to the HOA for the purchase of a master insurance policy which ideally should insure everything maintained by the HOA. Rarely do individual unitholders in an association ask to see the master policy of their HOA. Nor do the individual unitholders ask their governing board to audit the master insurance policy to make sure it covers enough of the HOA’s potential responsibilities and liabilities. If the policy does not contain the proper coverage for the HOA, the HOA subjects its unitholders to a special assessment if a disaster occurs and major rebuilds that are costly. Planned communities risk inadequate insurance coverage if it purchases a master policy without understanding the needs to the community and discloses these needs to its broker or agent when purchasing its policy.


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While the rest of the country watches for hurricanes, Californians are wondering when the next large earthquake will occur. Unfortunately, there is very little time to prepare for an earthquake as there really are not sufficient warning signs that can allow homeowners and businesses to pack up or board up their breakable belongings. Although most California homeowners do not have earthquake insurance, for those who do, they will find that a few significant changes in the California Earthquake Authority (CEA) policy may require closer scrutiny of their policies to suit their needs. When purchasing an insurance policy, home and business owners should be vigilant to ask their broker or agent what changes are being made to their policy and what options are available to add coverage.


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