Three separate lawsuits have been filed in Los Angeles County by fire victims alleging they were systematically underinsured which resulted in leaving them without sufficient money to replace or rebuild their homes after the Jan. 7 blazes. Two of the lawsuits filed in Los Angeles County Superior Court allege USAA, a Texas-based insurer that serves the military community, and two insurers affiliated with AAA for years underestimated the replacement cost of the homes, lulling the policyholders into buying inadequate coverage.
Additional lawsuits have been filed against the state insurer of last resort, The California Fair Plan Association, alleging they are not adequately handling smoke-damage claims arising out of the fires. In excess of 100 of the state’s licensed home insurers, including the CSAA, USAA and the Interinsurance Exchange, are defendants in a lawsuit filed in April accusing the companies of colluding to drop policyholders and force them onto the FAIR Plan in order to reduce their claims exposure. The plan’s policies typically cost more and offer less coverage than traditional commercial insurance.
The lawsuits filed, which are virtually identical except for specific details that pertain to different defendants, allege that the problem of underinsurance is “pervasive” and stems from “cost estimator software many insurers use to recommend coverage limits to insureds,” as well as “poor design choices, perverse profit and commission incentives, volume business, and other shortcomings.” The lead plaintiffs in the lawsuit filed against the two AAA insurers, James and Lisa Fulker, bought a three-bedroom, two-bathroom 1,850+ square-foot home in Malibu in 2020, according to the lawsuit.
The newly renovated Fulker home – which featured a kitchen with a center island, quartz countertops, high ceilings, a fireplace, an entertainment patio and a master suite with a walk-in closet and spa-like bath – had $713,000 in dwelling coverage and 125% extended replacement cost coverage, the lawsuit states. After the fires the couple learned their coverage was inadequate as they received estimates of $800 per-square-foot or more to rebuild which exceeded the $380 per-square-foot calculations of their insurer, the lawsuit states.
The lead plaintiffs in the USAA lawsuit, Ethan and Marijana Alexander, had a 2,100+ square-foot, four-bedroom, three-bathroom near-custom home in Pacific Palisades they bought in 2018, according to the lawsuit. The home had $584,000 in dwelling coverage and a 25% home protection endorsement of $146,000, the lawsuit states. Even with the additional coverage, the complaint alleges the couple don’t have adequate insurance to rebuild, with USAA calculating the cost at $342 per square foot and the couple receiving estimates at more than $850-to-$1,000 per square foot, the lawsuit states.
These appear to be cases where people trusted their insurance company to do the right thing and look out for their customers best interest. The end result of that trust is a continual revolving door or anger and a delay in returning to whatever their “New Normal” will be. We applaud these homeowners for retaining counsel and fighting for their rights. We will monitor their progress and report back.
We represent people injured as a result of the careless and reckless acts of others. At the end of the day your case can only be settled one time and you need to know all of the facts beforehand. Insurance companies have paid our clients hundreds of millions of dollars in compensation because we uncover the facts. When insurance companies fail to offer full compensation, we are not intimidated at the prospect of going to trial. We help with serious injuries that require serious representation. We are the Law Offices of Guenard & Bozarth, LLP. Our attorneys have more than 60 years of experience specializing in only representing injured people. Call GB Legal 24/7/365 at 888-809-1075 or visit www.gblegal.com
