June 26, 2008

1. SoCal 2007 Wildfire
Roadmap to Recovery:
Legal Issues Revisited…Bad Faith, Insurance
Code Section 2051.5(c) (Replace vs. Rebuild)
and Underinsurance
Meeting 16: June 26, 2008
Rancho Bernardo Community Presbyterian Church
www.unitedpolicyholders.org
Karen Reimus
reimus1@aol.com

2. Mark your calendar for upcoming
Roadmap to Recovery meetings…
Thursday, July 17: (1) Interfacing with an HOA after a
total loss; (2) City of San Diego Code Upgrade Update
Thursday, July 31: Integrating fire-resistant
technology/techniques into your rebuild
August - Insurance interest group meetings only
Thursday, August 14
Thursday, August 28
Thursday, September 11: Pre-1st Year Fire
Anniversary Legal Issues

3. Additional Support Resources from United
Policyholders to Help You Navigate the
Catastrophic Property Loss Recovery Process:
Disaster Recovery Mentor Program
Previous catastrophic loss survivors are available to provide emotional
support and “real-life” insight about recovering from a catastrophic property
loss. For more information, e-mail Karen Reimus at
karen@unitedpolicyholders.org;
“Survivor to Survivor” Listserve
A restricted listserve for ‘07 Firestorm Survivors only. It provides a
convenient means of sharing valuable information with others who are
similarly situated. For more information, e-mail Karen Reimus at
karen@unitedpolicyholders.org;
“Ask An Expert” On-line Forum
A restricted on-line forum where 2007 Firestorm Survivors can easily obtain
answers to disaster recovery-related questions from experts in the field.
Forum participants can direct questions to: 1) an attorney, 2) a claims
handling professional, or 3) a previous catastrophic loss survivor. For more
information, e-mail Emily Cabril at emily@unitedpolicyholders.org.

4. Videos of Roadmap to Recovery
Meetings Now Available…
Previous Rancho Bernardo Roadmap to Recovery
meetings may now be viewed as videos at the
United Policyholders website
To view previous meetings, go to
www.unitedpolicyholders.org. On the homepage, at the
top left corner. It says, "'Roadmap to Recovery'
Watch and listen to live videos". Click on that verbage
and you will be directed to a page that lists the previous
Roadmap to Recovery meetings
From there, simply click on the meeting date/topic that
you want to view. Download time for the videos varies
depending on computer and internet connection

5. United Policyholders Website

6. Previous Roadmap to Recovery
Meetings Now Available…
Previous Rancho Bernardo Roadmap to Recovery
meetings may now be viewed from the United
Policyholders website;
To view previous meetings, go to
www.unitedpolicyholders.org. Once on the homepage,
look at the top left corner. It says, "'Roadmap to
Recovery' Watch and listen to live videos". Click on that
verbage and you will be directed to a page that lists the
previous Roadmap to Recovery meetings;
From there, you simply click on the meeting date/topic
that you want to view. Download time for the videos will
vary depending on your computer and internet
connection.

7. Thank you to the following for making
the online viewing possible…
Rancho Bernardo Community Presbyterian Church
Jann Hoff
TV Magic, Inc.
Stephen Rosen (2003 Cedar Fire Survivor – Scripps Ranch)
Scott Richison
United Policyholders Staff
Amy Bach, Executive Director
Stefanay Allen, Dragoon Studios
The Fire Relief Biotech Recovery Fund of the San Diego
Regional Disaster Fund
The California Community Foundation

8. The Fine Print…
The information provided in this program is intended
for general educational purposes only. It should not
be construed as legal advice.
The speakers at today’s program are volunteering their
time as educators.
Neither United Policyholders nor the Rancho Bernardo
Community Presbyterian Church endorse or warrant the
quality or services of any volunteer speakers.

9. Jan Rasmussen, RB United will distribute
Going home one step at a time
Celebrating along the Road Home:
Ideas and Encouragement for 2007 Fire Survivors
from Cedar Fire Survivors,
United Policyholders, and RBCPC

10. CHARLES S. LiMANDRI
• Native San Diegan
• Graduate of Georgetown University Law Center, 1983
• Member, American Board of Trial Advocates, National Board of
Trial Advocacy, District of Columbia Bar and U.S. Supreme Court Bar.
• Authored several articles on insurance coverage
• Has lectured to insurance professionals and attorneys locally, nationally,
and internationally
• Successfully prosecuted and defended numerous civil cases in State and
Federal court, including fire loss claims.
• Firm includes a licensed architect/attorney specializing in construction
related cases.
• The firm has handled hundreds of insurance coverage and bad faith
claims.
• Firm is located in Rancho Santa Fe, California,
http://www.limandri.com

11. INSURANCE BAD
FAITH
By: Charles S. LiMandri, Esq.

12. Three Tier Analysis:
1. Coverage
2. Bad Faith
3. Punitive Damages

13. Coverage:
1. Structures
2. Personal Property
3. Additional Living Expenses
4. Prejudgment Interest
(Liquidated Amounts)

14. Bad Faith Analysis:
1. Requires Coverage
2. Not Mere Mistakes
3. Unreasonable Conduct
4. Not Genuine Dispute

15. Bad Faith Damages:
1. Attorneys’ Fees
2. Emotional Distress
3. Punitive Damages

16. Punitive Damages:
1. Malice
2. Oppression
3. Fraud
4. Amount: 4 to 9 times Compensatory
Damages

17. Examples of Bad Faith:
1. Overly restrictive interpretation of policy
2. Wrongful denial of policy benefits
3. Failure to fully and fairly investigate claim
4. Delay in paying policy benefits
5. Failure to pay undisputed amount due
6. Unreasonable demands for Proof of Claim

18. STANDARDS FOR ADJUSTING CLAIM:
1. Respond to written inquires in writing within
15 days
2. Upon receiving Proof of Claim, accept or deny
claim within 40 calendar days
3. If claim is denied in whole or part, cite facts
and policy provisions applicable to denial

19. Duties Owed By Insurer:
1. Good faith and fair dealing
2. Prompt response to claim
3. Use of superior knowledge of policy and damages
4. Seek out and offer benefits
5. Timely investigation, decision and payment
6. Willingness to keep an open mind
7. Willingness to reconsider
8. Use of independent investigators
9. Misrepresenting coverage
10. Hostile attitude and threats

20. Insurer Defenses:
1. Contractual limitations period (tolling)
2. Statute of limitations
3. Effect of insured’s conduct - No comparative bad faith
4. Advice of counsel - Attorney as adjuster
5. Offer of appraisal
6. Settlement and release

21. Appraisal:
1. Not required in disasters
2. Determination of actual cash value
3. No coverage questions
4. Avoidance of bad faith
5. Prerequisites to appraisal
6. Obtain claim-related documents

22. Claim Related Documents:
1. Repair and replacement estimates and bids
2. Appraisals
3. Scopes of loss
4. Drawings
5. Plans
6. Reports
7. Third party findings on the amount of loss
8. Covered damages
9. Cost of repairs
10. And all other valuation, measurement, and loss
adjustment calculations of the amount of loss, covered
damages, and cost of repairs

23. Advice to Insureds:
1. Be truthful
2. Don’t overstate damages
3. Be courteous
4. Keep copies of all correspondence
5. Keep journal of all telephone calls
6. Do chronology of key events

24. Litigation With Insurer:
1. Duty of good faith and fair dealing continues
2. Low-ball settlement offers
3. Litigation conduct privileged
4. Use of claim file
5. Use of claims manual
6. Juror attitudes

25. Closing:
Thank you.
Law Offices of Charles S. LiMandri, APC
Website: www.limandrilaw.com

26. PROFILE FOR CHARLES S. LiMANDRI
Charles S. LiMandri is a native San Diegan who has been representing insurance
companies and insureds in coverage and bad faith litigation since graduating from
Georgetown University Law Center in 1983. He is one of a select few California
attorneys who are members of both the American Board of Trial Advocates and the
National Board of Trial Advocacy, as well as the District of Columbia Bar and the U.S.
Supreme Court Bar. He has successfully prosecuted and defended numerous civil cases
in State and Federal court, including fire loss claims. He is a member of the Board of
Editors of the California Insurance Litigation Reporter and the California Tort Reporter,
published by West Group. Mr. LiMandri has also authored several articles on insurance
coverage issues and he has lectured to insurance professionals and attorneys locally,
nationally, and internationally. His firm includes a licensed architect/attorney
specializing in construction related cases. The firm has handled hundreds of insurance
coverage and bad faith claims. Mr. LiMandri also represented the City of San Diego,
pro bono, in the highly successful Mt. Soledad Cross litigation. His firm is located in
Rancho Santa Fe, California, and can be visited at
www.limandri.com.http://www.limandri.com.

28. Roadmap to Recovery: June 26th, 2008
Follow the green (brick road):
We’re in California, not Oz
Amy Bach, Esq.
www.unitedpolicyholders.org

29. Q: I don’t want to rebuild. I want to max out
my insurance benefits and buy
elsewhere. What should I do?
A: Document and “prove up” the cost of rebuilding
your destroyed home with one of like kind and quality,
according to current building codes, via a well-prepared
scope of loss and rebuilding estimate, even though you
do not intend to rebuild.
Try to negotiate a settlement with your insurer for
the amount it would cost if – in theory – you were
going to rebuild. Ideally, you should be able to use that
settlement to buy elsewhere.

30. Q: But my insurer says I only get paid
replacement cost if I rebuild…
A: That’s not true. Under California law – if your insurer
sold you a replacement cost policy, it must pay you
the reasonable replacement cost of your dwelling,
including amounts owing under extended replacement
cost provisions/endorsements, regardless of whether
you replace it by rebuilding or buying elsewhere.

31. CA. law offers a special protection for those who
want to buy, not rebuild after losing a home:
Ins. Code § 2051.5 (c) was passed after the Cedar fire:
In the event of a total loss of the insured structure, no
policy issued or delivered in this state may contain a
provision that limits or denies payment of the
replacement cost in the event the insured decides to
rebuild or replace the property at a location other than
the insured premises.
However, the measure of indemnity shall be based
upon the replacement cost of the insured property
and shall not be based upon the cost to repair, rebuild, or
replace at a location other than the insured premises.

32. United Policyholders’ view:
It is our understanding that this section requires
insurers to pay RC policyholders an amount
equal to the full replacement cost of the
original, insured, destroyed dwelling (up to
policy limits, including all extended limits
provide via endorsements/riders) upon
reasonable proof of the policyholder’s intent
to rebuild or replace their dwelling, without
adjustment for lot values, realtor commissions or
amounts actually spent to buy elsewhere.

33. It can’t be that simple…right?
Right. This is a new, untested law
Insurance companies are taking differing positions on what
and how they will pay those who want to buy, not rebuild
The CDI issued a legal opinion stating its view
The CDI opinion did not address the issue of land values
At least one insurer is saying it will not comply with the CDI opinion
Specifics of the law will be tested in court
United Policyholders has been working for over six months to help
homeowners take advantage of the flexibility and protection this law
offers
Hiring a qualified policyholder attorney may be the best option for
those who want to buy not rebuild without being penalized financially

34. What did the CDI opinion say?
Extended RC provisions apply even if you
buy, not rebuild
You can’t buy a smaller/cheaper home
and pocket the difference

35. Can my insurer deduct the value of
the land @ the new location?
If your insurer has put wording in your policy that
specifically states it will deduct land value if you replace
by buying elsewhere, consult with a qualified attorney to
get his or her view on whether your insurer can enforce
the deduction given the wording of Ins. Code 2051.5(c)
Argue that it’s not “unjust enrichment” to allow you to
keep the old (devalued due to fire damage) lot plus a
new one b/c the new home is by definition lesser than
the old one b/c the new home plus a lot cost the same
amount as my old house cost on its own without a lot.

36. Are there any other arguments I can make to convince my
insurer to commit to pay my full RC benefits so I can
replace my home with an existing one?
A cash-out settlement will be in everyone’s best interest
The insurer’s reps unreasonably delayed payments,
responding to calls, letters, etc.
Document in writing and review:
Any abusive behavior by adjusters/company personnel
Lowball offers, lowball estimates
Company’s failure to advance ALE or contents funds
Any misrepresentations of policy provisions or limits
Failure to explain the process or provide necessary forms, instructions, etc.
Unreasonable requests for info/EUO/recorded statement

37. What does the word “replacement”
mean on Planet Earth”?
“A person or thing that takes the place of
another” Source: Webster’s New Universal
Unabridged Dictionary

38. What Does "Replacement Cost" Mean on
Planet Insurance Industry?
REPLACEMENT COST INSURANCE: DEFINITION Insurance
which replaces lost, stolen or destroyed property by paying current
market prices, rather than depreciated value.
www.investorwords.com
The term "replacement cost" is defined or explained in the policy.
Simply stated, it means the cost to replace the property on the
same premises with other property of comparable material and
quality used for the same purpose. This applies unless the limit of
insurance or the cost actually spent to repair or replace the
damaged property is less.
Refer to your policy for the exact definition and explanation of
replacement cost. Source: Allen Financial Group,
www.egggroup.com

39. 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 working closely with the CA.
Ins. Comm’r and his legal team, as well as private
attorneys and insurer representatives to help 2007
wildfire survivors who are underinsured.
UP is working to “depublish” a recent legal decision
Go to the "Claims Tips“ section at www.uphelp.org and
find "Underinsurance Help“ to learn more…

40. 2007 UP/RBUnited/RMHL Wildfire
Claim Status Survey results:
After 8 months, 46% of those surveyed had received a
dwelling claim settlement offer. Of these, one third said
the offer was enough to rebuild their home.
75% of respondents reported that their dwellings were
underinsured. The average amount of underinsurance
among those surveyed was $240,000.
Only 18% of respondents have complained to the
California Department of Insurance.

41. 2007 UP/RBUnited/RMHL Wildfire
Claim Status Survey results:
Less than 22% of respondents got the list of reimbursable
ALE items that insurers are required by California law to
provide.
Insurers had waived the requirement that every single
destroyed item be itemized/inventoried for 25% of the
respondents.
Underinsurance is less of a problem on personal property
and temporary living expenses than on dwelling coverage.

42. Other notable results:
The survey contradicts industry claims that nearly 90% of
the Fall 2007 disaster claims were settled by April, 2008.
Underinsurance remains a severe problem for
homeowners.
See http://www.iinc.org/articles/247/1/Majority-of-October-Fire-Insurance-
Claims-Resolved/Page1.html
Homes were insured for approx. $157 per square foot.
The actual cost of rebuilding is $220-$350 per SF.
Survey respondents were insured for as little as $31.20 per
square foot and as much as $425.34 per square foot.

43. Other notable results:
The most common reason given for not complaining to
the CDI was that the homeowner is still in negotiation
with their insurance company.
Almost 25% of people who hadn’t filed a complaint
believed it would do no good, would make matters
worse or were afraid of angering their insurance
company.

44. 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

45. CDI Consumer Hotline:
800-927-HELP

46. Our heartfelt thanks to:
The Rancho Bernardo Community
Presbyterian Church
David Shalinsky/Janis Rasmussen
All our UP Mentors and Sponsors
The speakers at tonight’s meeting

47. Mark your calendar for upcoming
Roadmap to Recovery meetings…
Thursday, July 17: (1) Interfacing with an HOA after a
total loss; (2) City of San Diego Code Upgrade Update
Thursday, July 31: Integrating fire-resistant
technology/techniques into your rebuild
August - Insurance interest group meetings only
Thursday, August 14
Thursday, August 28
Thursday, September 11: Pre-1st Year Fire
Anniversary Legal Issues

48. Break Out Sessions
State Farm : Dormer West
Farmers : Skylight West
Allstate : Upper Courtside East
USAA: Small room off lobby