Returning home from a day trip in the early hours of the morning to water everywhere set the stage for a rare positive email from Becky, a retired high school English teacher living in Visalia with her husband. Both are 85 years young and received what can only be described as exceptional customer service.

“Your article about the disaster restoration company and its dishonest customer got our attention, in part because we recently had our own horrible experience with a burst water pipe, and were so fortunate with the high degree of service provided both by our homeowners insurance claims adjuster and the damage restoration company.

“Our water pressure regulator failed, causing a section of pipe to explode. Water pipes coming into most properties in our neighborhood are huge — 2-inch diameter — which means that pressure is very high and you must have a regulator. Testing your home’s water pressure is so important and easy. A gauge costs less than $20. Eighty psi or under is what you must have, we learned.

“After shutting the main water valve, we phoned homeowners claims and in less than 90 minutes, two angels arrived: our claims adjuster and the damage restoration supervisor with his crew. It was 3 in the morning!”

An unexpected suggestion

“Our house was inspected, lots of photos were taken and the supervisor was thorough and took plenty of time in explaining how they find water damage by using high-tech cameras which see moisture behind walls, and under the floor, to help avoid mold issues down the road.

“We signed a number of contracts and other documents after our adjuster gave her approval. This was all new to us — you don’t have busted water pipes every day, if ever, and who reads a homeowners insurance policy before a loss?”

“And then, something happened which was completely unexpected and made a reality out the TV commercials which tell you how wonderful it is to have this or that homeowners insurance.

“Our adjuster asked us to sit at the kitchen table, and in such a reassuring tone of voice, told us the following:

“Fortunately, water appears to have run for just a few hours, not days, but it is still going to be a real job in drying your home and preventing mold. The drying process requires using powerful fans, and possibly opening up certain walls, depending upon where the water settled. This means noise, a lot of noise and real inconvenience, with the crew coming in and out, removing furniture, carpets, anything that got wet and needs to be dried.

“Your insurance has a very good additional living expense provision, so you do not have to remain here while work is being done. I will help you pack what you need right now, and book you into a nice hotel downtown. In fact, I’ve already reserved your room. We will cover food and other related expenses during the time your home cannot safely be lived in.

“Mr. Beaver, at that time, I began to cry. Our adjuster truly was the angel we needed right at that moment. It took about three weeks to repair the damage, and we just could not be more satisfied with the way everyone dealt with us. We heard from the restoration company often and always did what they asked of us to help put things back to normal. I know that you hear more complaints than compliments, but I’ll bet our experience is the rule and not the exception.”

Staying involved in the process leads to a better outcome

“Dennis, this is a great story, and your readers had such a positive experience, in part, because they were involved in the restoration process,” commented Tampa-based Pete Consigli, a friend of this column and a national authority in restoration and damage repair.

“The property owner has an obligation to their loss. Never just turn it over to the company and walk away. You must be involved, in the loop. It is your home and you need to stay involved in the process, at whatever level you feel comfortable, to assure that your property is restored back to pre-loss condition,” he observes.

“This story also illustrated something that happens every day, but does not get the attention merited. And that’s the important role of claims adjusters at times like this.

“In the 35 years that I have been in this industry, your reader’s experience truly is the rule, and not the exception.

“The most successful claims adjusters will be good communicators and have compassion for the insured. And the same thing can be said for the restoration crew that comes to your house, just like with Becky, at 3 in the morning.”

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post ‘Water everywhere — and then two angels showed up’ appeared first on Dennis Beaver.

In early September, I began hearing from readers all across the country who had the same question: “Should I drop my current policy with Farmers Insurance and go with some other company?”

This was the first time in decades that so many people had the same question about one insurance company. The last time was in the early 1990s, in reference to Executive Life Insurance Company in California and New York. They were among the largest failures of life insurance companies in U.S. history.

Prior to their crashes, I wrote a column about them, and to anyone who asked, my advice was to run.

But these recent calls were different, and of course, I wanted to know why. There had to be a common denominator. Now, you might think that it had something to do with the way Farmers’ claims adjusters were handling claims, but it wasn’t.

Every person who called had been the victim of identity theft resulting from a massive data breach that was not caused by Farmers. So, why was Farmers getting such negative attention? And why now?

“Julie” in Greenville, North Carolina, sent me the answer, an innocuous-sounding “Notice of Security Incident” from Farmers about the data breach.

Not so fast, fair and friendly

To paraphrase the notice (you can read it in full here): On May 30, 2025, one of our vendors informed us about suspicious activity of an unauthorized actor who accessed our databases that contained customer information. We conducted a review to determine what personal information had been obtained.

But it wasn’t just the data breach that was so upsetting. Farmers, whose motto is “Fast, Fair and Friendly,” waited almost three months — until the very end of August — to tell their policyholders about the May breach (which involved its third-party vendor Salesforce).

Typically, insurance companies will notify policyholders within 30 to 60 days of a data breach, depending on state and federal laws. California and New York require notification within 30 days.

Farmers would most likely drop you like a ton of bricks within a month of you missing a premium payment, and yet, it took almost three months for it to notify its customers of the data breach.

Adding insult to injury, the first sentence in its security notice begins with these galling words: “Out of an abundance of caution, we are broadly providing notice of a security incident that may have involved personal information of certain individuals.”

“Out of an abundance of caution…”? Three months after the breach was discovered!

One policyholder — a claims adjuster, actually — was furious. He told me, on the condition of anonymity to avoid reprisals, “In my job, I deal with a lot of people who get very angry. If my personal information falls into the wrong hands, both I and my family are at risk.

“The way Farmers handled this data breach is concrete proof of an uncaring, callous attitude and gross negligence bordering on intentional. If one of our insureds had done something like this, I would deny them coverage, as this behavior was so outrageous and isn’t just an oversight.”

He was not alone in feeling that way.

Why a breach of this nature is so dangerous

If you’ve had to deal with identity theft resulting from a data breach — or the fear of becoming an identity theft victim — then you know all about anxiety and sleepless nights. We entrust insurance companies with highly sensitive personal information.

For those impacted by a data breach, the risks often include, but are not limited to:

• Identity theft used to commit financial fraud by obtaining fraudulent loans

• Phishing scams developed from stolen personal information

• Criminal activities such as stalking

What you can do if a data breach affects you

Several class-action lawsuits have already been filed, one by Los Angeles law firm Kabateck LLP. I spoke with managing partner Shant Karnikian, who advises anyone who has been notified that they were affected by the data breach to:

• Enroll in the complimentary identity and credit monitoring service offered by Farmers

• Remain vigilant and regularly review your credit reports and financial statements for signs of suspicious activity

• Be alert for phishing emails or texts that refer to Farmers

• Enable a fraud alert/security freeze with the major credit bureaus — Equifax, Experian and TransUnion — for an extra layer of security

• Keep an eye on your credit report for suspicious activity. You can get a free report weekly through AnnualCreditReport.com

Far-reaching effects of the breach

It is important to bear in mind that the effects of the data breach can extend far beyond the 1.1 million Farmers policyholders whose personal information was stolen.

Beneficiaries of life policies, auto policies with lenders listed as a covered party, homeowners policies listing financial institutions, commercial properties where landlords are listed as additional insureds and many more people connected to the customers affected could also be at risk.

Time will reveal the scope of the damage and just how much could have been prevented if Farmers had acted quickly to notify its policyholders that their personal information had been stolen.

Dennis Beaver Practices law in Bakersfield and welcomes comments and questions from readers,
which may be faxed to (661) 323-7993,
or e-mailed to Lagombeaver1 – at – Gmail.com.

The post A ‘Fast, Fair and Friendly’ Fail: Farmers Irks Customers With Its Handling of a Data Breach appeared first on Dennis Beaver.

Picture yourself running your own little convenience store in a poor section of town with a large, highly superstitious, immigrant population.

It’s Christmas Eve, and normally lots of moms with their kids would be shopping, but now–fortunately — you are all alone.

Suddenly, a car crashes through the front door, headed to where you are sitting behind the cash register. Like a character from The Matrix, you perform back-flips and contortions, avoiding the car, but get one heck of a backache and nightmares.

Fortunately, the out of control car, your landlord, and your business have adequate insurance. Claims adjusters immediately arrange for repairs, so you’re only closed about a week.

But then something very odd becomes clear:

Many of your customers are frightened, some talking about a hex — a spell — on the building, and they have not returned, leading to a substantial reduction in sales.

You also sustained some type of a back injury, and have recurring, horrible nightmares, but have been trying to “tough it out” and not yet been seen by a doctor or psychologist.

To make matters worse, your own insurance company, which should cover lost income, announces that you only have 60 days to make a final claim. But at this time, how could anyone know what the loss will wind up being?

That real fact situation is currently facing Abe, our Central California reader. You and the Law has turned to Hanford attorney, Rissa Stuart for advice on how to deal with claims adjusters, and other steps Abe needs to take to prove his loss of income claim, beginning with good record keeping.

Good financial records +video surveillance evidence = solid proof

“Just as for an individual who may have been off work due to an accident and would prove lost wages with pay stubs from a employer, it’s the same for a business.

“Abe’s situation is unique and could greatly benefit by having more than daily till records and profit and loss statements. His store video surveillance system could play a critical role in proving these substantial losses by showing customers in the store over a period of months prior to the accident,” Stuart points out.

And once again, Abe was a lucky guy, as his video system has an enormous 8 terra bytes of storage, and had been running for almost a year. But what about this 90 day cut off limit?

’90 days to present the claim is unrealistic’

“An insurance company must allow adequate time for you to gather the facts and elements of proof which establishes your claim. Abe’s could easily require help from a forensic accountant, an economist and a cultural anthropologist to establish his present reduction of income and prove what could very well be a permanent loss of customers putting him out of business at that location.

“This 90 day limit to present his claim is unrealistic and sounds like bad faith. Abe is clearly being pushed around by a claims adjuster, likely an attempt to minimize what is paid out.

“That alone is reason to at least have a consultation with an attorney, but as there are three insurance companies involved in the incident, Abe likely cannot handle it by himself,” Stuart believes.

Toughing it our — delaying treatment — weakens the claim

Of course anyone going through something like this would certainly be affected, at least emotionally, and Abe could indeed have experienced some kind of a back injury.

“But if you are hurt, you see a doctor and you do this now. It’s the same thing with emotional injuries, as the longer you wait to be treated, the believability of your injuries can take a nose dive,” Stuart notes.

To superstitious customers the hex or spell is real

Just how serious, how real is the “hex” on Abe’s store and could this be the basis of compensation for lost business?

“It could be very real to his former customers,” anthropologist Dr. Phillips Stevens told us. He is associate professor of anthropology at the Buffalo campus of the State University of New York.

“In many communities all over the United States the belief in magic and the supernatural play a role in everyday life. If a belief in this ‘hex’ can be confirmed through interviews conducted by a cultural anthropologist, it would help to explain his loss of business,” Stevens believes.

Proving the reality of those fears to Abe’s former customers and others to whom the worlds of magic and the supernatural are real then raises one determinative question:

“If Abe cannot somehow convince his customers that it is safe to return, then what?”

In that event, it will be one of the most interesting cases that any lawyer will ever have.

Cross my heart and hope to die!

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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The proper smoke and carbon monoxide (CO) alarms can mean the difference between having a home to live in and employees not out of a job because the boss wasn’t one of the 80% of deaths from home fires that occur between the hours of 11 p.m. to 7 a.m.

“Anna” and “Danny” were not one of those statistics because they had a CO detector that went off early in the morning of Dec. 28, 2021.

“It was a smoldering, ceiling fire in our attic with little smoke, but which created carbon monoxide. Our Kidde CO detector woke us from a deep sleep, giving us time to call 911. Only a small bathroom and laundry area off of the kitchen were damaged,” Danny said.

“We would appreciate any guidance you can offer so we don’t do the wrong things with our insurance claim.”

Fire? What not to do

I ran Danny’s important question by friends of this column, Los Angeles-based retired homeowners claims adjuster Rachel Greenberg, and insurance broker/expert witness in insurance coverage issues, Karl Susman.

Rachel: Delay in calling 911 when you smell smoke or suspect there is a fire.

Consequences: This raises a suspicion of arson. Policyholders have a duty to mitigate (reduce) damages under the terms of the policy.

Karl: In addition to phoning 911, immediately report the claim to your insurance carrier. Delay in both instances makes the entire claim suspect and may affect payment even if legitimate.

Rachel: Fail to promptly begin making an inventory of what was destroyed or damaged. Be a hero and start co-it-yourself repairs.

Consequences: Homeowners policies generally provide replacement coverage, but you’ve got to know what was lost. Unless you have date-stamped photos–showing the structure and contents of closets and drawers – the further away from the incident, your memory will suffer and you will not be paid for what you can’t prove was in your home.

Karl: By starting to fix things yourself, you might not realize that the damage is far more extensive. If you do it on your own without approval of the claims rep, chances are that you may not be properly reimbursed.

These Things Are Giant Red Flags

Rachel: Have a bad attitude towards the adjusters!

Consequences: They might drag their feet instead of moving things along quicker. This is a time to be patient and cooperative. Their job is to help you. They aren’t your enemy!

Being a jerk, overly anxious and pushy will slow thing down. If you need that money and your need it NOW, there is usually a problem. Adjusters think, “Someone is in a lot of debt and sees the insurance claim as a quick way to get some cash to pay it off.”

Karl: How you react at the scene is important. Carriers receive copies of first responders’ reports. All of that information is passed on to the adjuster. They are trained to sniff out fraud, especially inflating what was lost. If a homeowner is pushy, this will make the adjuster suspicious – and a credit check will be done.

Don’t do it. Don’t pad the list of items destroyed. If caught, in some states, the insurance company can deny the entire claim.

Rachel: Abuse the “Temporary Living Expenses” section of your insurance policy by booking the Presidential Suite at the Ritz Carlton and for breakfast each day have room service bring caviar!

Consequences: “Can I stay wherever I want?” is a frequently asked question. You need to stay somewhere that is similar to where you were. This does not mean a million dollar mansion at Malibu unless that’s where you were living before the loss.

Approval from your adjuster — before renting an apartment or checking into a very expensive hotel — is required or you could face a denial of payments under that section of your policy. Often insurance companies have pre-negotiated room rates with very nice properties, so it is always important to give your adjuster a chance to find lodgings for you.

Karl: You will not be rewarded for extravagant expenses. If you did not order the most expensive item on the menu every day before the fire, you are not going to be reimbursed for doing so after it. “Is this how you and your family normally eat?” an adjuster will ask if presented with a mind-numbing bill for dining at fancy restaurants.

Thinking: “I have been paying my premiums for 20 years and you guys owe this to me! Now is my chance to get my money’s worth,” is not the way insurance works.

It is so important to use common sense before a fire or other loss. With expensive items of jewelry, clothing, anything of unusual value, let your agent know about it, and obtain an appraisal and possibly a rider for it.

Concluding our discussion, both Rachel and Karl stressed this final point:

“Don’t embellish, lie, rush, assume or guess. Do not create an adversarial relationship with your adjuster who is not your enemy!”

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post After a fire loss – dealing with your insurance company appeared first on Dennis Beaver.

A recent article dealt with the consequences of rejecting advice from professional tree trimmers to eliminate the chance of a giant, 75-foot tall eucalyptus tree causing significant property damage or death when it falls.

Fall it did in early September 2017, crashing onto a neighbor’s corral and injuring their horse. The tree owners turned the incident over to Farmers Insurance and another reason why claims adjusters have a reputation for unethical behavior would soon be evident.

Even when presented with multiple examples of their insured’s dishonesty, evasive behavior and being aware of the danger, adjuster Lindsay McCarty and supervisor Richard Osbun incredibly stated, “Our insured denied ever being told the tree was dangerous. We have to believe them. Claim denied.”

Among the many comments readers submitted, one was stunning. “Richard,” a retired Farmers adjuster stated, “When you have credible evidence that your insured are dishonest, you can’t believe them! This claim obviously should have been paid. Management is responsible for such disturbing, unethical behavior.”

Pay claims and you’ll never get ahead

Salt Lake City attorney Randall K. Edwards writes extensively on this topic and as a young lawyer worked in insurance defense, seeing first hand “how morally low claims adjusters can sink.” We asked him, “Do insurance companies seek out dishonest people to work for them?”

“I don’t think so,” he replied. “After all, who wants someone who is dishonest working for you? It’s more subtle than that. In my experience, dishonest, unethical adjusters are made, not born. Most new employees are simply trying to figure out how best to do their jobs and then move up in the company,” he stated.
The term “grooming” came to mind, and Edwards sees it that way also.

“Adjusters are groomed to make ethical compromises, which come gradually. This is how to hang onto your job and move ahead. Your goal is to protect the assets of your multi-billion dollar employer and cheating the insured or an injured party out of compensation is expected and rewarded.

“Soon, new adjusters realize that by paying claims they will never get ahead. As an adjuster’s supervisor got into that position by the same process, it becomes the corporate culture. Excuses to deny payment are manufactured, often by:

(1) Intentionally misreading the insured’s policy so that coverage is denied;

(2) Arguing that certain statutes do not apply;

(3) Dragging a case out until the insured or claimant simply gives up and accepts an unreasonable, low offer because they need the money and are stressed out.

(4) Just like your tree example with Farmers, adjusters will often reject clear evidence of fault, saving the company money, and their insured then winds up being sued by the injured party.

Adjuster and insurance company lawyers are caught in the middle

Despite all the comforting slogans; Allstate’s “You’re in good hands,” Farmers, “We know a thing or two because we’ve seen a thing or two,” or State Farm’s, “Like a good neighbor, State Farm is there,” Edwards says:

“The corporate culture of non-payment, fighting with policyholders over coverage and rewarding adjusters for trying to find loopholes is self-defeating. The public doesn’t trust their own insurance company to do right by them, and certainly doesn’t trust the insurance company of someone who has injured them to step up and do the right thing. Meanwhile, the adjuster gets caught in the middle.

“You can’t get ahead in the company without trying your best to pay out as little as possible, while at the same time trying to hang onto your sense of decency and self-worth,” he observes and has harsh words for defense attorneys.

“It’s nasty. In order to keep the insurance company sending them cases, insurance defense attorneys are often in a direct conflict of interest with the insured policyholders who have been sued and to whom they owe their primary duty of loyalty. This often results in poor legal representation for the insured policyholder.”

“I am aware of many lawyers and adjusters who finally had to decide between selling their souls and dignity and getting out of the insurance game,” he underscores.

“A necessary evil”

So, are there any “good” companies out there? Edwards isn’t optimistic: “Unethical behavior as a vital part of the insurance industry’s culture, the fact of the matter is that exceptions to this rule are few and far between, in my experience.

Even the best insurance companies can be thrown into the category of ‘the best of a bad lot,’ in my view. As things stand right now, insurance is a necessary Evil. And Evil, necessary or not is still Evil.”

And the takeaway from our story? No matter how friendly, adjusters aren’t your friend.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

The post Are unethical claims adjusters born that way or made? appeared first on Dennis Beaver.

Driving home, on the same road you’ve driven thousands of times, doing about 25 mph, suddenly, with no warning, a car pulls a U-turn right in front of you.

Attempting to avoid the accident, you veer to the right, but still collide, and next crash into a parked car.

The police come out, take statements and file a report which assigns 100 percent fault to the driver who made the illegal U-turn, as one would expect.

Sustaining “soft tissue,” whiplash injuries, a short course of physical therapy is prescribed. Your car is deemed a total by your insurance company.

“OK, Beaver, so where’s the meat? I don’t see a story,” you might be thinking right now, and if the insurance company for the at-fault driver were ethical and acted in a fair manner, there would be no story.

But that’s not what was to happen, for even with no evidence that you had done anything wrong, the insurance adjuster claimed that you were (1) speeding; (2) failed to take evasive action; and (3) “failed to maintain a proper lookout.”

If you ever thought that insurance companies were a big brotherhood and watched out for each other, playing nice among themselves, guess again.

Rather, it’s “no honor among thieves,” as this company refused to accept liability, forcing the matter to “Inter-Company Claims Arbitration,” which, just like the police, found 100 percent fault. Later an accident re-construction expert and police officers from two different cities would find you completely fault-free.

Still, they maintained that you were 50 percent at fault!

We’ve seen their funny ads

Without naming the company, you have seen their funny ads — at a cost of over 500 million dollars a year, close to 5 percent of premiums.

But what the cute commercials don’t reveal is a return to some of the worst claims practices seen since California had third party bad faith — meaning you could sue an insurance company for acting in bad faith when handling a claim.

That amazing window of time was David and Goliath, with insurance companies running scared, often over-paying claims out of fear, and it lasted from 1979 until 1988. Then, under great political pressure, the California courts took that right away from us all, and the cockroaches crawled out of the cupboards, insurance settlements becoming a fraction of what was fair.

“Your client should have anticipated the accident”

The most maddening justification for making a low-ball settlement offer was this comment from the adjuster:

“Your client failed to maintain proper lookout and should have anticipated the accident.”

“You mean, my client is required to be a mind-reader??” the lawyer replied. “How can you know someone is going to make an illegal U-turn???”

“If they maintained lookout, there would not have been an accident,” the charming adjuster repeated.” (At that time, your lawyer opened his desk drawer and removed a Voodoo doll, grabbing a handful of pins. He also reached for his emergency bottle of scotch.)

“But the courts define lookout as observing things in plain view, which are easily seen. It means being diligent, such as keeping a safe distance from other cars. If you don’t look, are fiddling with the radio or texting, sure, then you are not maintaining a proper lookout.

“And they don’t even remotely suggest that you have to anticipate someone making an illegal U-turn. How can you blame my client when your driver suddenly pulled right out in front and made the U-turn?  Tell me that, please,” begged the attorney.

It was a conversation that went nowhere, and so, your lawyer asked to be connected with her supervisor who promised to have the entire matter “round tabled” with new adjusters. And their findings?  Identical. Speed, failure to maintain lookout, and so on.

Get you and the law involved

“Beav, I need your help — Have I got a story for you,” was the call from your lawyer.

We contacted the Media Relations department of this insurance company and asked if they now have a “mind reading” requirement for anyone involved in an accident with their insured.

“We will have the matter looked at by a regional supervisor,” was the reply.  And that’s exactly what took place, but did it change anything?

You bet your crystal ball! Without addressing the mind reading issue, an acceptable settlement offer was made.  Nothing extravagant, just a fair offer.

The voodoo doll was put back in your lawyer’s drawer and the bottle of Johnny Walker remains unopened to this day.

Moral to our story: Even if you are handling your own auto accident case, when the adjuster is a colossal jerk, escalate the matter, speak with a supervisor and, if need be, the supervisor’s supervisor.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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When disaster strikes, we first worry about health and safety. Then concerns of financial loss and damage come to mind.

Many commercial insurance policies contain clauses that protect a business in the event of a disaster–including biological, such as the coronavirus–which has led to governmental intervention, shuttering companies across America. Typically, these policies provide coverage on an “all risk” basis. That means all risks of loss and damage are covered unless explicitly, expressly, and unambiguously excluded.

For example, expense incurred to decontaminate and protect your premises should be covered. Losses from the interruption of your business due to government mandated closures in this viral pandemic may be covered. However, some insurance companies are instructing their claims adjusters to use obscure contract interpretations and deny certain business interruption claims which are indeed covered.

Readers who have business interruption insurance need to know how to protect themselves, and how to respond to a possible denial of coverage by a claims adjuster.

If this happens to you, here is an insight into what you need to know about Business Interruption insurance coverage and claims from two attorneys specializing in insurance bad faith, Chicago attorney Michael Childress, and Brian S. Kabateck from Los Angeles. They have a combined total of 70 years of experience handling insurance bad faith cases.

Your Agent is Not Required to Offer You Potentially Needed Coverage

Kabateck: Most people are completely unaware of the fact that an insurance agent only owes you a duty to obtain the type of insurance you tell him to. Your agent is like a pizza order taker; if you don’t say that you want pepperoni, it will not be offered.

Childress: I call it The Don’t Ask, Don’t Tell Policy. If you don’t ask your insurance agent for specific types of policy coverage, they have no obligation of suggesting it to you. Many insurance agents are motivated to not offer certain types of coverage, to keep what is called their loss ratios down.

They want to keep losses down so the ratio of losses–claims that are paid–to premiums received from policyholders is not high, keeping the insurance carrier happy.

For example, one area where a claim could cost the company dearly is with “business crime insurance,” which is not generally part of many commercial insurance policies, or at very low limits of coverage.

This covers crime-related loses, such as theft or embezzlement. But a business owner can ask for it, in varying amounts of coverage. Unless the business owner specifically asks for business crime insurance to be added to their commercial policy, it will likely not be suggested.

Your broker is not the person to ask if you have coverage that your business needs. Many are just salespeople and do not understand what it is they are selling. I know that sounds strange, but it is true. It is always best to have a lawyer who is experienced with commercial claims help you determine the coverage your business needs.

Steps to Follow – Get a Full Copy of Your Insurance Policy

Kabateck: It is stunning how many people who do not have copies of their insurance policy. They may have the Declarations Sheet but not the body of the policy. You need both in order to evaluate whether there is coverage. The Declaration Sheet often does not identify additional coverages, optional coverages, or extensions of coverage that reside in the body of the policy.

Oftentimes you will need to ask your broker for that policy. You may hear, ‘Why do you want it?’ You simply say that you want to know the kinds of coverages you have in the event of a claim.

Childress: Well before a loss you want to have your full policy.

Some Policy Forms Exclude Coverage for Virus

Kabateck: Some policy forms exclude coverage for virus. ISO (The Insurance Services Organization) has a form used by many insurance companies with an endorsement at the back of the policy that specifically excludes loss for virus and bacteria. If you policy has that, you are out of luck.

However, under the standard ISO form there may be coverage, including contamination or the impact of governmental authority. With that ISO form, consider yourself lucky!

To complicate matters even further, many insurance companies have their own policy forms that do not follow ISO and so the devil is in the details. You’ve got to read the policy. You need to know what is covered and what is not.

The Governor Shut Down My Business! What Must I Do Now?

Kabateck: In the event of a loss, before you so much as speak with your insurance company, have someone experienced with commercial claims read the policy so that you are clear on what coverages you actually have. After that:

Set up a separate account for your extra expenses for due to the virus loses.

There are usually two kinds of loses, for example, cancelled bookings and lost profits. Other loses include extra expenses that you are incurring to help your business survive. For example, if customers can’t dine in your restaurant, then you will incur the added expense of outfitting your business for delivery and carry-out.

Childress: Consider decontaminating your facility in the event that any of your employees come down with the virus. You may need to hire a company that specializes in this type of remediation. It is important to make a time line – a log – of when you first became aware of it, having someone experienced with business interruption claims interview employees.

If possible, determine the source and how long it might be there on your business premises. If you have this type of an impact on your facility, your chances of coverage for this expense is much higher.

Kabateck: There are two roads to finding coverage under an insurance policy and one is direct physical loss and damage, such as a tree falling on your roof. But damage does not have to be visible. It can be an odor or microscopic, such as fungal spores and viruses. If you have someone with the virus in your facility, then you probably have damage, and as just mentioned, will need to take steps to eliminate it from your business premises.

The other road to finding coverage is being shut down by the government or local municipality. Most of these shut down orders contain language which triggers coverage, by explaining that the action taken is to prevent spread of the virus, i.e. biological damage.

When Speaking with a Claims Adjuster – Follow These Steps

From watching television police shows, we all know about the Miranda warnings or “What you say can and will be used against you in court.” Both attorneys caution that the same applies when speaking with a claims adjuster, and list these steps to follow:

–Before you present your claim–before your first conversation with the adjuster–schedule an appointment with an attorney who handles business interruption claims to evaluate your policy so that you will know what is covered and what is excluded. You do not want to make a claim for things which are not covered, as this harms your credibility.

–Keep a log of all of your conversations with the adjuster.

–If the adjuster tells you, “We are denying the claim,” it is critical to reply, “Please put that in writing,” as this triggers the statute of limitations – the time limit – for a possible lawsuit against the carrier.

–Business interruption claims are complicated. There are multiple avenues to finding coverage which benefit from a consultation with an attorney who handles these types of insurance claims. You may not need to retain the attorney, but given the stress you will be under, to level the playing field, time spent discussing your rights with a lawyer is an important step to take.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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The ferocious storms that continue to pummel California and much of the nation have resulted in massive insurance claims by thousands of business and property owners.

Often, this is the first time they have ever been faced with filing such claims, says Los Angeles-based Karl Susman, an insurance broker for over 30 years, expert witness in lawsuits involving coverage and agent malpractice issues, and a friend of this column.

He phoned my office, concerned that a great deal of false and misleading advice on how to deal with claims will result in substantial delays, and asked if we can list steps to take from the moment it’s clear you have suffered a loss.

I could not say yes quickly enough.

The do and don’t of it

(1) Start with the assumption that your insurance company is going to do right by you. Do not rush out and retain a lawyer!

But if turns out that they don’t, then ask for a claims manager or supervisor, and if that is still not satisfactory, then consider retaining a public adjuster if you feel they are not being reasonable, and if that still is not satisfactory, then and only then do you want to hire an attorney.

(2) Hiring an attorney prematurely or unnecessarily for the typical loss slows down the process of resolving your claim and can add considerable expense as lawyers will typically be paid a percentage of the settlement.

For the typical storm-related loss, hiring an attorney is the absolute last thing you want to do, as it takes your claim to a completely different insurance company department. As there are fewer adjusters who are trained to deal with attorneys, this will cause delay sometimes lasting months and even years with no benefit.

(3) If I file a complaint against my insurance company with the insurance commissioner’s office over valuation or handling of my claim, will this help me?

Generally it is a zero-sum game. They will send a letter to the insurance company that says, “Please justify your actions with this customer’s complaint.” Your carrier answers the complaint with the same documents they gave to their customer. It seldom accomplishes a thing, but again, we are talking about the average claim. The exceptional bad-faith case is a different story.

(4) Public adjusters — is it worthwhile hiring one? I hear they have a bad rap.

The typical cartoon character public adjuster shows up at your business or home after it has been destroyed and quickly signs you up, and takes a piece of the insurance settlement, leaving you with much less than your own insurance company would have offered you.

“Propaganda,” says Susman, adding, “just as all lawyers aren’t crooks, there are good and some very poor public adjusters. In my experience, the main reason people are often dissatisfied with having retained a pubic adjuster is that the expectations of what a PA can do are not often met and the settlement process can be slowed down considerably. I have seen instances where it took years to resolve a claim and the insured got nothing different than what the company first offered.”

(5) Insurance companies need the justification to pay claims, so put on your claims adjuster hat and ask yourself, “If I was the adjuster, what would I need to see in order to pay this additional money?”

“The public often thinks that hiring a public adjuster will in some way force the insurance company to do more. But that is not how insurance functions.

(6) On national television, we saw RVs at an RV park swept into California’s Santa Clara River. “One was my home business and I have insurance, so what should I do?” a reader emailed.

Susman replies: “If you have a total loss like that, I would ask for policy limits. What often happens is that when people have a total loss and they realize they didn’t have enough coverage, instead of taking policy limits, they want to fight and get more.

“It is a zero-sum game, the worst thing to do. The message is simple: If you have a total loss, don’t try to collect more than your policy limits. It is a waste of time, money and will reward you with heartache.”

(7) One of the people whose RV was shown falling into the river said, “I want to sue the RV park instead of claiming under my insurance because 15 years ago something similar happened and they should have warned me to move my vehicle. That is why I want to hire an attorney and pay on a contingency.”

Susman: “15 years ago? Give me a break! Unless you can prove the park ownership was on notice that the river was about to suddenly flood again, you can’t blame them. That is why you have insurance.

“It is a matter of how far into the future we think we can peer. As these storms have shown, the answer is, not very.”

Some final, important recommendations

(1) Please, don’t forget that claims adjusters are just people. Their job is to hear from folks who are always at their worst! Something bad has happened. Try to have a little sympathy, a little empathy. Be polite!

(2) Don’t threaten with attorneys or public adjusters. Explain and justify your position. The adjuster would love to give you what you want if you can support your position.

(3) Don’t exaggerate. Don’t lie! This can nuke your entire claim.

(4) Don’t forget that adjusters are paid to settle your claims, not reject them. Help them help you.

(5) Think of technology as your friend when claims people are pulling their hair with so much to do. By providing good photos and videos of your loss to your adjuster this will help speed the process.

(6) Yearly, review your insurance needs with your agent or broker.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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Slowing down, about to stop for a red light, perhaps doing one or two miles an hour, Patricia’s 2007 Toyota Camary was rear-ended in December 2011, leaving “the rear bumper scratched and pushed in slightly,” her email to You and the Law stated.

“While the damage wasn’t all that visible — repair charges only $710 — my daughter and I did feel a ‘jolt’ and I noticed an odd tingling in my right arm along with very slight discomfort in my lower back. That is why we saw our chiropractor, just to be checked out. He immediately referred us to an attorney friend.”

Now, let’s fast forward to June of 2012. This incredibly minor auto accident has generated close to $60,000 in chiropractic, physical therapy, MRIs and expensive “pain management” M.D. treatment bills. It was simply an insurance scam, taking advantage of trusting patients.

“We had never been in anything like this before,” Patricia told us, “and now realize that the doctors and our lawyer were having us going through all of these procedures just to run up a huge bill. We feel so bad, because our lack of knowledge helped them!”

Of course, it’s bad enough realizing you have simply been a money-making tool for unethical health care professionals and the lawyer they work with. As you’ll see in a moment, what Patricia and her daughter didn’t know at the time was the damage this incident may yet cause them, years from now.

‘No concern for the patient’s best interest’

“This happens all over the country, and your reader fits the pattern of the perfect victim who is in an extremely minor auto accident with little or no property damage or injury,” states Frank Scafidi, spokesman for the Des Plaines, Ill.-based National Insurance Crime Bureau.

“We want the public to be aware of what an insurance scam looks like, how greedy people in the health care and legal professions find their victims, to realize this is a fight over money and not what is in the best interests of the patient/client. Also, it is so important to understand the risks faced personally by being associated with insurance fraud,” Scafidi states.

“It’s the auto accident with little or virtually no property damage and injury that invites fraudulent claims. You need to use common sense and good judgment, and listen to that little voice which tells you things are not right.”

Scafidi outlined some of the red flags:

1) You have a minor accident and are approached at the scene, or later contacted, and urged to see a certain doctor or lawyer. This is a huge red flag and the first step in what we refer to as “engineered fraud,” where you become a portal through which excessive and unnecessary treatment begins.

2) There is a well-established connection between property damage and bodily injury. If you are in a truly minor accident and basically feel fine and yet are being referred to specialists and scheduled for expensive tests and treatment, something is wrong.

3) If you are encouraged to continue treatment as a way to get a higher insurance settlement, this is trouble with a capital “T.” There is a distinction between a person who has been victimized and one who is part of the fraud. You could face prosecution if you are a knowing player.

4) We know real claimants get caught up in these things and do what they are told to do. If and when at some point things do not seem right, just out of self-protection, make an inquiry. Speak with your own insurance agent or claims adjuster.

Finally, if you think you may be the victim of insurance fraud,  please call our hot line — 800-635-6422 or TEL-NICB. Also, look at our website: www.nicb.org.

Patricia now has a C.L.U.E.

Patricia and her daughter are facing long-term consequences from being involved in what is clearly insurance fraud, even though it would certainly appear they are innocent of any wrongdoing.

Their names are in a national database known as the Comprehensive Loss Underwriting Exchange. This is the 500-pound gorilla of personal information — claims history — used by insurance companies to “reduce risk and liability by assisting the underwriter in predicting future claims,” as its website states.

CLUE takes a seven-year look backwards at accident claims, with information submitted to it from insurance companies all over the country. On the condition that we not reveal her name, one fraud investigator for a major auto insurance company told You and the Law that someone in Patricia’s situation “will be looked at like ‘The Boy Who Cried Wolf.’

All it takes is one highly questionable claim for a later accident — even a real accident — to be seen in a very different light.”

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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I was in an auto accident on our way to visit Lassen Park in Northern California. I admit this was not a major accident, and, frankly, I really felt fine at the time, but two days later saw an ad for a chiropractor that offered a free exam. We went camping after the accident, and I had no trouble hiking or rock climbing.

The damage to the car I was in was barely visible and no repairs will be made. My reason for writing you is that the chiropractor feels that I did sustain an injury and will need several months of treatment. He said auto insurance on the car I was in will pay all of his bills. He had me speak with a lawyer who felt I had a great case and he could guarantee me a nice settlement — several thousand dollars — even though I told them that, really, I felt fine and doubted if I needed treatment.

Both the chiropractor and the lawyer warned me that if I did not get treatment, I could suffer long-term significant back problems.

What do you recommend? My mom — who reads your column every week — tells me that I should get away from these people as soon as possible, but some friends from college say that I should get the treatment and let the lawyer handle the case, as it is a chance to collect some money I really do need for college expenses.

New concept to learn — It isn’t worth it

When this e-mail came in from a reader in Northern California, at first I wondered if it was a joke. Only it was no joke, as I learned when calling my reader. I phoned him back immediately, and got both him and his mom on the phone. “Mothers usually know best,” I said. “And this time, her advice will help you in ways you can’t even begin to imagine,” I said. My reader had a gut feeling that he was doing something wrong, and he was correct. It is called insurance fraud.

Typical victim

“Your reader is the typical victim/potential co-conspirator in auto insurance fraud cases. If he was in good enough shape to go rock climbing after the accident, and doubts that he’s hurt, then common sense should dictate his decision. Fear tactics, such as you’ll never be the same unless you get treatment now, is absolute nonsense,” I was told by Frank Scafidi, Director of Public Affairs at the National Insurance Crime Bureau (www.nicb.org), based in Palos Hills, Illinois.

“If you engage in any fraudulent activity, such as reporting injuries that did not occur, or helping others bill for unnecessary treatment for such non-existent injuries, you are, on the face of it, part of a conspiracy to commit insurance fraud,” Mr. Scafidi told me.

“California vigorously prosecutes these cases, and sends people to prison for up to 5 years in addition to huge fines. What your reader described is the typical case that generates thousands of dollars in unjustified and unneeded medical bills, chiropractic and physical therapy bills and attorney fees, and of course it’s paid by all of us who have auto insurance,” the former FBI Agent and now Spokesman for the NICB told me.

“Discovery of the fraud can easily have far reaching consequences — such as being dropped by your auto insurance company, or facing greatly increased premiums for both home and auto insurance. This industry maintains a data base of suspect claims, known as The Questionable Claims Data Base. When a suspicious claim comes in to an insurance company — picked up by an adjuster or medical payments staff — it will be reported to their Special Investigative Unit. You do not want your name on their list,” Mr. Scafidi stressed.

Long-term consequences

There are other, far-reaching consequences of making a suspect claim, even where fraud is not suspected. “For a college student, just getting started in the real world, you don’t want to damage your most important possession: Reputation,” the former FBI agent concluded.
In my general law practice, we have handled hundreds of personal injury cases over the past

25 years. While there are a lot of people who literally walk away from accidents and take Tylenol for a few days, preferring to get back to work and make no personal injury claim, there are just as many who think they have won The Big Spin. It is the Lottery mentality — I got in an accident, Great! Free Insurance money!

“That free money can come at a high cost,” a retired Farmers claims adjuster told me. “All insurance companies have an index of claimants — in most cases, just routine information, but in some cases, flagged for further study. If your name comes up too often, it is like the “boy who cried wolf.” Even legitimate claims may tend to be denied, as statistically, there is something that just does not make sense.”
The insurance industry knows more about us than we know about ourselves. Insurance is not intended as a way to make a quick buck. It is intended to guard against legitimate, unanticipated loss, to help us through tough times, to fix our car, pay our medical bills, fix our house or help replace the economic loss of a spouse or parent.

Lawyers or any health care professional who sees it otherwise deserve to lose their license to practice.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.

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