So Cal Wildfires: Be Cautious of Third Parties Seeking Financial Gain from the Insurance Claims Process

LOS ANGELES - If your home was damaged or destroyed in the Los Angeles area wildfires, be cautious of third parties, including some public adjusters, who prey on the insurance claims process for their own financial gain. Public adjusters are independent businesspeople who have no relationship with the insurance company or agent.

"The Los Angeles area wildfires have left thousands of people grappling with catastrophic property damage or the complete loss of their home or business. The entire insurance industry is focused on helping our policyholders recover by deploying all available resources to work with customers to process claims quickly," said Karen Collins, vice president of property and environmental at the American Property Casualty Insurance Association (APCIA). "Following large-scale natural disasters, predatory third parties often flock to hard hit areas to take advantage of homeowners in vulnerable situations and profit off the insurance claims process. Don't be victimized twice. We encourage homeowners to protect themselves by being informed and cautious of anyone claiming to help with insurance claims, including services for no out-of-pocket cost."

When a homeowner hires a public adjuster, any settlement check the homeowner receives will typically be made out to both the homeowner and the public adjuster and may require signature by both parties before it can be cashed. The California Department of Insurance issued a press release warning about potential scam artists and making sure Southern California wildfire survivors understand that public adjusters' fees are paid by the policyholder and are typically a percentage of the settled claim, which means it may reduce the funds a policyholder has available to rebuild or recover. Consumers should make sure they understand what the cost is and give a description of the services they are paying for before signing a public adjuster contract.Hiring a public adjuster could also add extra time and delays in settling homeowners' claims.

Before hiring a public adjuster, consumers should take time to get informed and know their options. Below are key tips:

• Try settling your claim directly with your insurance company before hiring a public adjuster.
• If you decide to hire a public adjuster, make certain the adjuster is licensed. You can contact the California Department of Insurance (CDI) for licensing verification at 1-800-967-9331 (CDI License Bureau). Also, ask the public adjuster to provide references and call those references to verify they were satisfied with the service provided.
• A contractor's license number can be checked by calling the Contractors State License Board (CSLB) toll-free automated telephone number at 1-800-321-2752 to verify that the license is valid, or log onto the internet and access their website at www.cslb.ca.gov .
• Consumer complaints and a scam tracker can also be found on the Better Business Bureau website at https://www.bbb.org/local-bbb/bbb-of-los-angeles-and-silicon-valley .
• Be wary of individuals who solicit business by going door-to-door with aggressive sales tactics. Insurance laws also prohibit public adjusters from soliciting policyholders until 7 days after the conclusion of an evacuation order.
• Ask public adjusters and other third parties about their fees and get a written contract outlining the details of any work arrangement.
• Be careful about authorizing anyone to work for you without fully understanding what you will receive. An authorization to review a policy may be a contract for service.
• Watch for potential conflicts of interest that may incentivize a public adjuster to delay the claims process or recommend specific vendors.
• Avoid public adjusters who misrepresent themselves as being part of a government agency or being sent by your insurance company or agent.

"While third party vendors play an integral role in the building and repair process and most are legitimate, these precautions will save you time, money, and headaches, so make sure you are an informed consumer before involving a third party in your insurance claim and always talk with your insurer first if you have concerns," added Collins.

Insurers are devoting extensive resources to ensure the claims process is smooth and efficient for their customers. The insurance claims settlement process is thoroughly regulated by California law. Insurers must comply with specific timelines and there is a complaint process available through CDI if there is an issue that cannot be resolved between the policyholder and the insurer. In addition, California law gives consumers rights and provides for a dispute resolution process if they are unhappy with their insurance claim process or settlement.