The Old Fire Recovery Group Of San Bernardino Valley Return to Disaster Survivor Network

This information is provided with the intent to share knowledge.  We do not benefit from you using their services, nor do we have any control over how they conduct themselves.  Always use caution when working with an unfamiliar organization.

Identity Theft and Protecting your privacy

I am putting this on top, because it is not the first thing people think about after a disaster.  Please be aware that you may be at increased risk for this and be extra aware of the danger.  Here is additional information

• Privacy Rights Clearning House
• Information from a "survivor" of Identity Theft
• Free Credit Report Kit and Privacy Survival Kit
• Protect Your Credit: Identity Theft Resources

Insurance

• CARe is a non profit organization dedicated to providing free disaster recovery information.  George Kehrer and his wife Pat have been supporting our meetings regularly since November 2003.
• United Policy Holders has good insurance information on their web site as well.
• Disaster Prepared is run by a former insurance adjuster.
• FEMA Info is run by a disaster survivor in the DC area

California Department of Insurance

• California Department of Insurance (CDI) and the Fair Claims Settlement Regulations
• What is the CDI?
• CDI Residential Property Claims Guide
• CDI Don ’t Get Burned After a Disaster
• CDI consumer information booklets in English or in Spanish
• File an Request for Assistance with the CDI English or Spanish
  • Or download, print and mail in our "short form" RFA
  • Number of RFA's reported to the CDI as of:

Feb 25, 2006	869
May 31, 2005	824
Apr 30, 2005	819
Mar 20, 2005	811
Feb 27, 2005	807
Jan 30, 2005	792
Dec 31, 2004	779
Nov 28, 2004	763
Oct 31, 2004	730
Sep 26, 2004	661
Augt 29, 2004	623
Jul 25, 2004	521
Jun 27, 2004	445

count updated by Dian Black

• Info on California Department of Insurance Mediation Program

• If considering going into mediation you will still need to get copies of your a) Agent file b) Underwriting file and C) claims file
• Look up a public adjuster or insurance person's licence activity (search by name)
• Consumer Complaint Study published by the CDI

Insuring your home

• Do's and Don'ts when insuring your home by United Policy Holders
• Are you Underinsured? (PDF format) by the American Business Index

Your adjuster

• Cat Adjuster - Do you want to see how adjusters talk to each other to try to figure out how to adjust claims? This link is interesting.  The first post I read was adjusters telling each other how to exclude things and even turn "hard wood floors" into "abandond underlayment".  Is this Legal?  I'm not sure, but it's all there in 0's and 1's.

Filing a claim

• Policy Ensurance a book by Tony Braga.  Topics covered include (click to read about the book):  If you are an area leader where a disaster has struck, Mr. Braga is offering bulk discounts on the book.  Click the above link for a printable flyer as well as information about the discount.
• Inside the Claims Game by an Expert Witness on Insurance Claims
• CLUE Database - This is something like the credit reporting agencies for insurance claims.  For more information on CLUE, visit Privacy Rights Clearinghouse.  For a recent article regarding legislation about CLUE visit the Insurance Journal's website for:
  • Article 1 (on recent security breach)
  • Article 2 (legislators try to understand CLUE)
• Information on getting a copy of your CLUE report as given by Policyholders of America (scroll to very bottom of page) :

  CLUEis a national database that tracks types of homeowners' claims filed. When you apply for home insurance, your insurer will request a CLUEreport to determine whether you, the buyer, or the home seller have filed any claims during the past five years.

  You can get a free copy of your CLUE report if you are denied insurance due to information contained in your CLUE report. If you have a dispute with an insurer about the one-sided information in the report, you can ask that your account of the events be included in the report. If you are simply curious about your home's history, you can order a copy from the company that owns the CLUE database (ChoicePoint).

  Here's how to order:

  You can order a copy of your CLUE report for under $13.00 by calling (866) 527-2600 or via the Internet at its Web site, click here.

• Insurance industry information and help for claims holders. http://disasterprepared.net/

Dwelling

• Have a professional contractor do a Scope of Loss on your lost dwelling.  Many people in our fire used Bob Rettig.
• To do an initial estimate of your rebuilding fees, you can try this calculator by BH Gold Insurance, but it seems to forget overhead/profit, architect fees and general conditions (such as temporary electicity, security fence and a port-a-poty) which can account for at least 35-40% of rebuilding costs.  This is NOT a replacement for a Scope of Loss by a licenced professional, but it is something to start with.
• What is Replacement Cost? by Rapid Survey Group
• How does replacement cost differ from new construction? by Rapid Survey Group
• Why does it cost more to replace an older home? by Rapid Survey Group

Examination Under Oath (EUO) or Recorded Statement

• The author of http://disasterprepared.net had this to say in his January 2005 newsletter

  An examination under oath is an entirely different procedure than a recorded statement, is formal in nature, and is supported by insurance policy language. A recorded statement is often conducted informally over the phone and is not a requirement supported by policy language. Also, some authorities advise policyholders that they must cooperate with their insurance company in the settlement of any claim and must submit to a requested recorded statement with no policy language to support that statement. That advisory is misleading and inappropriate to direct either to insurance companies or policyholders.

  He gave THESE references to court cases regarding EUO's and recorded statements.

Insurance Related News Articles

• Wildfire Victims Question Industry's Cost Calculator Associated Press
• Homeowners Come Up Short on Insurance NY Times
• Action urged as deadlines near Riverside Press Enterprise
• Payments gratifying to residents, advocates San Diego Union Tribune
• After the Fires: Rebuilding & Insurance on KPBS's Full Focus
• Disaster Insurance on Sound Money radio show
• "Underinsured" an interview with a San Bernardino couple on CBS Evening News. One thing the reporters left out is that there is a way to fight this underinsurace issue which we have been learning at our Insurance Clinics.
• "Having Insurance Doesn't Mean You're Covered " Tennessee, Jackson Sun, May 2, 2004
• Rising From a Wildfire's Ashes LA Times
• October Wildfire Survivors File Class Action Suit Against Insurance Companies

Personal Property Inventory

Personal Property Inventory has become a hot topic since the fire.  CDI as well as the State Sentate of Insurance is encouraging insurance companies to not require a detailed inventory and sited AAA of So Cal as an examle.  Since then there have been many sources on the internet of example "inventory sheets".  We encourage everyone who has a loss and is still required to do a detailed inventory to look at as many of these sheets as possible to help jog your memory as to what you had.  Do not use any one of these as a definitive listing of what might have been in your home, but just a starting point to complete your inventory.  Remember, just because a form (including one given to you by the adjuster) has 6 or 10 columns of information about each object doesn't mean that you need to fill in each blank. Look at your full policy and see what is required by the insurance copmany. Also, don't forget small objects.  I have yet to see a published list that includes q-tips, band-aids, tampons or condoms yet most every home has items such as these and were covered in your policy.

• Blank Personal Property Inventory Database by Microsoft
• Free Personal Property Software "My Stuff"
• Personal Property Inventory Book.  Good information on how to get started by the University of Illinois.
• Personal Property Inventory Sheets.  By Fullmont Mutual Insurance Company.
• Personal Property Inventory Sheets by Liberty Mutual Insurance Company
• Use a service to do an inventory such as
  • Southern California Inventory Service in Long Beach
  • California Home Inventory 858-530-0737 which was started because of the wildfires as reported in the NC Times
  • Digital Home Shield

Legal Information

I read this sage advice in a recent (spring '05) Real Simple Magazine.  Although they are specifically talking about divorce lawyers, the same advice, I think, applies to finding an attorney dealing with home owner's insurance and bad faith.

"To A... Lawyer - This is one case in which asking friends for a reference may not be the best idea.  People often don't know when they've received bad legal advice, says Violet Woodhouse, a family-law specialist in Newport Beach, California, and the autor of Divorce & Money (Nolo, $35). Consult someone who deals with lawyers often, such as a banker or a real estate agent, she advises, and "run in the other direction if the lawyer says things liek 'We're gonna destroy him.'"  Look instead for grounded advice.  Then prepare for the meeting - lawyers' time is expensive, so you don't want to waste a minute.  At the meeting, expect to discuss finances, not to decide who was wrong, says Claudia Pott, an attorney with Ain & Bank, in Washington, D.C.  "The worst mistake is not gathering the... data you need," says Woodhouse.  "You have the legal right to that information and are much better off if you get it early on."

• "Hiring an Attorney for an Insurance Claim -- When, Why and How" By United Policyholders
• Legal description of why Underinsurance is a consumer fraud and not an error or omission written by Jerry Ramsey Esq and Brian Hefferman Esq. (Adobe Acrobat required)
• "Helping Handbook" for Individuals and Families Affected by the 2003 Southern California Wildfires
• Check an attorney's bar membership record
• "The Loss of the Certainty Effect" (Adobe Acrobat required)
  Abstract
  Recent changes in the commercial property-liability insurance business have made it unlikely that large claims will be paid promptly and willingly. The situation is not limited to asbestos, pollution, and medical product liability, though certainly evident there. The authors examine the situation from three economic and psychological perspecitives - option theory, asymmetric information theory, and prospect theory. All three indicate that if insurance were seen by customers as less than fully certain and reliable, the resulting discounting of its value - and hence buyers' willingness to pay for it - would be much deeper than one would expect. Although competitive and legal steps could be taken to head off such a disaster, none of them is likely.
• What is "Crunch Time" as described by CARe
• "Confessions of a Former Insurance Defense Lawyer" (Adobe Acrobat Required)
• "Ten Things About Your Insurance That Your Insurance Company May Not Want You to Know "
  

  Extracted from the Introduction:
  Whether an uninsured will recover for a legitimate claim at all, and if so, the amount he or she will be paid, depend largely on the policyholder's own knowledge of his or her rights and responsibilities. Policyholders are often at the mercy of their insurance company. The company wrote the policy, the company interprets the policy, the company evaluates the claim and the company holds the money.

• Look up your San Bernardino Court Case Online

Examination Under Oath (EUO) or Recorded Statement

• The author of http://disasterprepared.net had this to say in his January 2005 newsletter

  An examination under oath is an entirely different procedure than a recorded statement, is formal in nature, and is supported by insurance policy language. A recorded statement is often conducted informally over the phone and is not a requirement supported by policy language. Also, some authorities advise policyholders that they must cooperate with their insurance company in the settlement of any claim and must submit to a requested recorded statement with no policy language to support that statement. That advisory is misleading and inappropriate to direct either to insurance companies or policyholders.

  He gave THESE references to court cases

Financial Issues

Financial Planning: A Guide for Disaster Preparedness (2004)

Disaster Recovery: A Guide to Financial Issues (2003)

Tax Issues

Property Tax

• Property Tax Value of your land after a disaster (San Bernardino County)

• The following sections can be found in the California Revenue & Taxation Code:

  • Section 69 refers to the transfer of Proposition 13 values to replacement properties
  • Section 170 (titled Disaster Relief) refers to the reconstruction of properties
• San Bernardino County's tax assessor, Don Williamson is fighting to keep your Prop. 13 tax basis even lower.  See this article from the Riverside Press Enterprise for a good explanation.

Income Tax

• Sifting Through the Rubble, Disaster Losses & Gains, Lessons learned from the Oakland Firestorm by Anna Maria Galdieri, CPA, M.S. Taxation (Adobe Acrobat Required)
• Wildfire Victims Need Not Pay Taxes on Insurance Reimbursements
• Handout by Anna Maria Galdieri from our Sept 2004 tax meeting (Adobe Acrobat required).  This is a 11 page handout written in a Q&A format with theoretical examples.  It is much easier to read than the very technical version listed above.
• Each year the IRS puts out a casualty kit.  For 2004 you can download it HERE.  If you need it for a different year, simply search the IRS website for disaster losses.

Mortgage

Amount of insurance settlement held in escrow before rebuilding

• Generally, your mortgage holder (Lender) cannot hold any amount of insurance money in excess of the amount owed on your mortgage. Thing is, there are several different regulatory bodies for different types of banks and lenders.  Before you take the following as 100% gospel, please call the Office of the Comptroller of Currency (OCC) who can tell you who regulates your mortage holder and/or tell you the rules regarding your specific lender.
  
  So, assuming your lender cannot hold any amount of insurance money in excess of the amount owed on your mortgage let's say you have a mortgage of $100,000 and you receive $200,000 from your insurance to rebuild, the checks will come payable to both you and your Lender. You unknowingly endorse them and forward them to your Lender, who then puts them in an escrow account, the entire $200,000. You have the right to ask your Lender to return the extra $100,000 to you, and they must do it. They rarely, if ever, tell you this.
  
  Your insurance company should only issue checks payable to you and your Lender for the amount of the mortgage and everything else just to you. I found out about this after I received my insurance money to rebuild, but before I'd endorsed the checks over to my Lender, so I returned the checks to my insurance company and asked them to reissue with both my Lender's name and mine only on a check for the mortgage amount, which they promptly did.
  
• No matter who regulates your mortage holder you can do the following.  For the amount of money they do put in the escrow account, you should tell them IN WRITING to put the money in an interest bearing account.  Although many banks have the policy to do so, many times they "forget" to do it unless asked.  For even more safety, make sure you get a signature confirming the request.
  
• The Office of the Comptroller of Currency (OCC) is a good starting point when you have questions about your mortgage company.  From their front page, "The OCC's Customer Assistance Group is ready to help customers of national banks with questions or complaints they have about their financial institution."  and " The OCC charters, regulates, and supervises over 2,500 national banks and their operating subsidiaries... "
  
• The Office of Thrift Supervision (OTS) is the primary regulator of all federally chartered and many state-chartered thrift institutions, which include savings banks and savings and loan associations. 
  
  For example, they monitor WAMU
  
  Office of Thrift Supervision (OTS)
  Department of the Treasury
  PO BOX 7165
  San Francisco, CA 94120-7165.
  

Amount of interest paid on above escrow account

• If you have/had a mortgage and your insurance company probably made your structure reimbursement checks out to both you and your mortgage company.  From what I've heard they were only supposed to make the structure portion out to both you and your insurance company and also the amount of the check made out to both you and the mortgage company might even be limited to the amount of your mortgage (meaning that you can insist they cut two checks). 

Although each lender has different policies (other variables inlcude the amount of your insurance check, the value of the land and the amount of your loan), the mortgage company likely kept some of that money. 

Although the exact amount of money they're allowed to keep is still not exactly clear to us (see above) the amount of interest they are supposed to pay on this account has been discussed  on the San Diego Yahoo Group (which anyone can join or even just read the posts at http://groups.yahoo.com/group/cfrrg/).

Here is the latest post which I found most informative:

From: "Schahrzad Berkland"
Date: Wed Apr 20, 2005  5:26 am
Subject: Re: [cfrrg] Interest that mortgage companies are to be paying us

 

I researched this before. The only laws on escrow accounts is HUD's Real
Estate Settlement Procedures Act. It sets limits on the amounts that a lender
may require a borrower to put into an escrow account for purposes of paying
taxes, hazard insurance and other charges related to the property. In 1992 and
1993, legislation was introduced in Congress that would have required lenders to
pay interest on escrow account balances, but it never passed. Some states do
require interest to be paid on escrow account funds, but many do not. As you
noted, California is one state that does require interest be paid, and the rate
is 2%.

 

I e-mailed the Insurance Commissioner a few months ago, and noted that we need
similar laws for restricted escrow accounts arising from insurance
reimbursements. Perhaps a letter would have been better, because I did not get
a response. I was frustrated because my mortgage company was holding onto my
money and slow in disbursements. It felt like a tug of war. I wondered if they
can use our funds to increase their reserves, and thus increase their loans,
because they were so reluctant to make the proper payments. It was only after I
wrote a letter to the Office of Thrift Supervision that my disbursements were
quick.

 

These are the pertinent sections from the California Code, and they apply again
only to real estate transactions.

 

California Financial Code 854.1
854.1. Notwithstanding Section 10145 of the Business and
Professions Code or any other provision of law, but subject to the
limitations of Section 854, benefits accruing from the placement in a
non-interest bearing account of a commercial bank (including a
national banking association) of funds received by a real estate
broker who collects payments or provides services in connection with
a loan secured by a lien on real property under subdivision (d) of
Section 10131 or Section 10131.1 of the Business and Professions Code
shall inure to the broker, unless otherwise agreed in writing by the
broker and the lender or note owner on the loan. A borrower shall
receive at least two percent simple interest per annum on impound
account payments covered by Section 2954.8 of the Civil Code.

California Civil Code Section 2954.8

 

2954.8. (a) Every financial institution that makes loans upon the
security of real property containing only a one- to four-family
residence and located in this state or purchases obligations secured
by such property and that receives money in advance for payment of
taxes and assessments on the property, for insurance, or for other
purposes relating to the property, shall pay interest on the amount
so held to the borrower. The interest on such amounts shall be at
the rate of at least 2 percent simple interest per annum. Such
interest shall be credited to the borrower's account annually or upon
termination of such account, whichever is earlier.
(b) No financial institution subject to the provisions of this
section shall impose any fee or charge in connection with the
maintenance or disbursement of money received in advance for the
payment of taxes and assessments on real property securing loans made
by such financial institution, or for the payment of insurance, or
for other purposes relating to such real property, that will result
in an interest rate of less than 2 percent per annum being paid on
the moneys so received.
(c) For the purposes of this section, "financial institution"
means a bank, savings and loan association or credit union chartered
under the laws of this state or the United States, or any other
person or organization making loans upon the security of real
property containing only a one- to four-family residence.
(d) The provisions of this section do not apply to any of the
following:
(1) Loans executed prior to the effective date of this section.
(2) Moneys which are required by a state or federal regulatory
authority to be placed by a financial institution other than a bank
in a non-interest-bearing demand trust fund account of a bank.
The amendment of this section made by the 1979-80 Regular Session
of the Legislature shall only apply to loans executed on or after
January 1, 1980.

---

Submitted by Dian Black

May 4, 2005

So far, the bulk of the questions have been about Chase and Wells Fargo.  The best contact information for each bank as follows:

Chase:
Call Jennifer Fischer directly in the Escrow Administration office at: 614 422-7992.

Wells Fargo:
For customer’s who were affected by the fires, a specific numbers was set up.
If your account is with:
Wells Fargo Home Mortgage, call: 800-853-8516
Wells Fargo Home Equity /Wells Fargo Consumer Credit, call: 866-236-4184

You should know that your mortgage institutions should pay interest according to the applicable laws (to follow). Please note that there is no differentiation between the first lien and the subordinate lien; the code applies equally. The two above mentioned banks do pay interest on the money being held. If your bank says it does not pay interest, try digging deeper by calling a different department or asking for a superior.

Applicable California law regarding interest on an escrow account is as follows, although it is unclear if the same law applies for funds held for demand trust accounts, such as the ones for insurance funds held to rebuild a house. In any case, it seems like many people were able to get interest on this money if they asked for it in writing.

Ca. Civil Code, CCP §2954.8 (same as listed above)
Summary
All banks, including national banks, making loans secured by real property and holding money for purposes related to the real property, are required to pay interest on the amount in the “impound account” at the rate of 2% simple interest per year. Such interest is to be credited to the account at termination or annually whichever is earliest.

---

The following was posted on the CFRRG Yahoo! Group.

Citimortgage Inc. is an affiliate of Citibank and therefore under
OTS jurisdiction. Check with both OTS and CA Dept. of Corporations
about your mortgage institution.

Complaints can be faxed to OTS (attn. Consumer Affairs Dept) at
650-746-7001.

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Last Updated: February 15, 2011