YOU DON’T HAVE TO ACCEPT YOUR INSURANCE COMPANY’S EVALUATION OF YOUR PROPERTY DAMAGE CLAIM

Most insurance policies will state that they will pay the reasonable cost of repair or replacement of damaged or stolen property, without deducting any amount for depreciation, up to the amount of coverage.

It is not uncommon for an insurance company to limit its investigation into the extent of your property damage. Your insurance company has a duty to fully investigate your claim at the earliest possible opportunity. Don’t allow your insurance company to get away with underestimating the cost of repair by conducting a limited investigation.

Insurance companies have a duty to act reasonably in handling claims. Insurance companies have to give equal consideration to your interests as well as its own.

You don’t have to accept your insurance company’s decision to deny your claim. Call us for a free consultation with a partner of our firm. We will fight for everything you are entitled to.

IN CALIFORNIA UNLESS THE INSURED INTENTIONALLY STARTED A FIRE , ARSON IS NOT EXCLUDED UNDER YOUR FIRE POLICY UNLESS ARSON IS DEFINED AS A FORM OF VANDALISM

In 2015 the California Court of Appeals in Ong v. Fire Ins. Exchange ruled that unless arson is defined as vandalism under the vandalism coverage, the vandalism vacancy exclusion does not exclude coverage for a fire caused by arson.

Often time vandalism is defined in the standard California fire policy as malicious mischief. Unless your fire policy defines malicious mischief as fire started by arson, arson is not a form of vandalism.
Typically the vacancy exclusion in fire policy are contained in the vandalism coverage of the policy.
You don’t have to accept your insurance company’s decision to deny your claim.

Call us for a free consultation with a partner of our firm. We will fight for everything you are entitled to.

YOU DON’T HAVE TO ACCEPT YOUR INSURANCE COMPANY’S DECISION TO DENY A FIRE CLAIM CAUSED BY ARSON UNDER THE VACANCY EXCLUSION CONTAINED IN YOUR FIRE POLICY

Insurance companies are in the business of paying the least amount as possible on losses. Do you own rental property? What happens when your rental property is vacant and there is a fire? The first thing your insurance is going to do is get the fire department report. Frequently the report will list the cause of the fire as undermined. That’s not the end of the investigation for your insurance company. The next step is for your insurance company to hire an expert, someone they have a working relationship with. The expert will investigate the loss and determine the fire was caused by arson.
Once the insurance company has a report from their expert that the fire was caused by arson the denial letter goes out to the insured. Your insurance company will quote the malicious mischief definition under the vandalism coverage in your policy to support its decision that arson is a form of vandalism. Your insurance company will then deny the claim under the vacancy exclusion contained in the vandalism coverage because the property has been vacant for more than 90 days.
In 2015 the California Court of Appeals in Ong v. Fire Ins. Exchange ruled that unless arson is defined as vandalism under the vandalism coverage, the vandalism vacancy exclusion does not exclude coverage for a fire caused by arson.
You don’t have to accept your insurance company’s decision to deny your claim. Call us for a free consultation with a partner of our firm. We will fight for everything you are entitled to.

ARSON IS NOT VANDALISM UNDER CALIFORNIA LAW UNLESS YOUR FIRE INSURANCE POLICY DEFINES ARSON AS A FORM OF VANDALISM

For years insurance companies in California routinely would take a position that your rental property left vacant for more than 90 days would not have coverage for a fire if the fire was caused by arson. In 2015 the California Court of Appeals in Ong v. Fire Ins. Exchange ruled that unless arson is defined as vandalism under the vandalism coverage, the vandalism vacancy exclusion does not exclude coverage for a fire caused by arson.
Arson caused by the insured is always excluded under policy.
You don’t have to accept your insurance company’s decision to deny your claim. Call us for a free consultation with a partner of our firm. We will fight for everything you are entitled to.

Farmers Insurance must exclude arson as a form of vandalism in policy

CALIFORNIA LAW NOW MAKES IT CLEAR THAT IF AN INSURANCE COMPANY WANTS TO EXCLUDE FIRE AND/OR ARSON THAT OCCURS WHEN THE STRUCTURE IS VACANT IT MUST SPECIFICALLY EXCLUDE THOSE RISKS IN THE INSURANCE POLICY
In Ong v. Fire Ins. Exchange, (2105) 235 Cal. App. 4th 901, Second District Court of Appeals finds that a vacancy exclusion in a fire insurance policy for a loss from vandalism or malicious mischief was limited to vandalism and malicious mischief. If the insurance company wanted to include fire or arson as a form of vandalism or malicious mischief it could have listed fire or arson as an excluded risk under the vandalism vacancy exclusion. By not listing fire or arson as a form of vandalism and or malicious mischief there was coverage for the loss under the fire coverage of the policy.
The Appellate Court’s reasoning was focused on the insurance company’s ability to include fire or arson as risks that could have been specifically included under the definition of vandalism and/or malicious mischief. Many policies specifically exclude damages caused by thief, sprinkler leakage, glass breakage, and water damage under the vacancy exclusion contained under the vandalism coverage in the fire insurance policy. If the insurance company wanted to exclude fire and/or arson as a risk occurring during the period of vacancy it should have specifically identified those risks in the insurance policy.
The Appellate determined that the vacancy exclusion contained in the vandalism coverage was ambiguous as it pertained to fire and arson as a risk that was excluded. “As drafter of the policy, the insurer is responsible for any ambiguity therein.” (See Crosky et al., Cal. Practice Guide: Insurance Litigation, supra, ¶ 4:407, p. 4-70)

Farmer’s Group Failing to Pay a Fire Claim

Our firm is currently handling a case against Farmers Group, Inc. for failing to pay a fire claim on a rental property.

Rackohn & Rackohn files lawsuit against Fire Insurance Exchange and Farmers Group, Inc. for wrongful denial of a fire claim under a landlord protection package policy of insurance

Date: November 22, 2013

Syron v. Farmers Group, Inc. Los Angeles Superior Court, Stanley Mosk Courthouse

Plaintiff’s trial law firm Rackohn & Rackohn filed a wrongful denial of insurance benefits lawsuit on behalf of Joseph Syron against the Farmers Insurance Group, Inc. and Fire Insurance Exchange. The case was filed in Los Angeles Superior Court in downtown Los Angeles.

The suit alleges that Famers Group Inc. and Fire Insurance Exchange wrongfully denied paying a fire claim by relying on its vandalism vacancy exclusion, and intentionally disregarded evidence that supported paying this claim. That Farmers Group, Inc. committed a fraud by not specifically defining arson as a form of vandalism in the policy, knowing that for years it has been denying arson claims by relying on the vandalism vacancy exclusion.

Attorney Craig Rackohn stated: “The purpose of this lawsuit is to prove that policy holders have rights pursuant to the terms of their insurance policy that they have paid for and are entitled to. Policy holders are entitled to their insurance benefits when there is a covered fire claim. Farmers Group, Inc. and the Fire Insurance Exchange should not be allowed to collect premiums knowing that if there is a fire claim caused by arson Farmers Group, Inc. and its companies are not going to pay the claim if the insured dwelling has been vacant longer than permitted under the vandalism vacancy exclusion contained in the policy.

Rackohn & Rackohn specialize in wrongful denial of insurance claim cases. Information about the firm, can be found at www.rackohn.com

Homeowner’s Claims Not Getting Paid?

HAS YOUR INSURANCE COMPANY REFUSED TO PAY YOUR HOMEOWNER’S INSURANCE CLAIM?

Your insurance policy is a contract that is enforceable under the law. Once you suffer a covered loss under the policy your insurance company is under an affirmative obligation to investigate your claim, and to timely pay your claim pursuant to the terms of your policy.

As an insured you are responsible for cooperating with the insurance company’s investigation. You must timely report the claim. You must provide a proof of loss to support your claim. If requested you must provide a statement under oath. (Jordan v. Allstate Ins. Co. (2007) 48 Cal. App.. 4th 1062, 0178.) Prior to proving that the insurance company delayed paying your claim you first must prove that you have cooperated and that there is coverage for your loss.

Withholding of benefits can occur when the insurance company outright denies your claim and or pays you less than you are entitled to. (Mariscal v. Old Republic. Ins Co. (1996) 42 Cal. App. 4th 1617, 1623; Egan v. Mutual of Omaha, Insurance Co. (1979) 24 Cal. 3d 809, 820)

Intentional delay in the payment of your insurance benefits: It is not uncommon for insurance adjusters to delay their investigation or continue to ask for additional information prior to paying the claim, and then paying less than your claim is worth. (Waller v. Truck Insurance Co. (1995) 11 Cal. 4th 1, 36)

These are just a few examples of unreasonable conduct that insurance companies may engage in when investigating homeowners claims. Our firm will aggressively fight for the insurance benefits you are entitled to.

Insurance Claims & Pleading Punitive Damages Under California Law in Federal Court

Under Federal rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The Rule 8 pleading standard does not require detailed factual allegations, but “[f]actual allegations must be enough to raise a right to relief above the speculative level.” Raisin Bargaining Ass’n v. Hartford Cas. Ins. Co. 715 F. Supp. 2d 1079, 1084 (E.D. Cal. 2010), citing Bell Atl. Corp. v. Twombly, 550 U.S. at 555. Twombly explains that mere labels and conclusions or a formulaic recitation of the elements of a cause of action will not do; rather, there must be “enough facts to state a claim to relief that is plausible on its face.” Id. In other words, the “complaint must contain sufficient factual matter, accepted as true, the state a claim to relief that is plausible on its face.” Ashcraft v. Iqbal, 556 U.S. at 677.

“A claim has facial plausibility when the plaintiff pleads factual content that allows the Court to draw the reasonable inference that the defendant is liable for the misconduct.” Iqbal, 556 U.S. at 678. Iqbal and Twombly make clear that the plausibility standard is not akin to a “probability requirement,” but it asked for more than a sheer possibility that a defendant has acted unlawfully. Id.

The Ninth Circuit has summarized the governing standard, in light of Iqbal and Twombly, as follows: “In some, for a complaint to survive a motion to dismiss, the non-conclusory factual content, and reasonable inferences from that content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v. U. S. Secret Serv., 572 F. 3d 962, 969 (9th Cir. 2009) (internal quote omitted). Apart from factual insufficiency, a complaint is also subject to dismissal under rule 12(b)(6) where it lacks cognizable legal theory, or where the allegations on their face “ show that relief is barred” for some legal reason. Raisin Bargaining Ass’n, 715 F. Supp. 2d at 1084, citations omitted.

There is no question that under California law, plaintiffs in insurance bad faith cases are legally entitled to seek punitive damages. “The availability of punitive damages [in bad faith cases] is thus compatible with recognition of insurers’ underlying public obligations and reflects an attempt to restore balance in the contractual relationship.” 20th Century Ins. Co. v. Superior Court, 90 Cal. App. 4th 1247, 1265-1266, 109 Cal. Rptr. 2d 611, 625-626 (2001), Citing Egan v. Mutual of Omaha Ins. Co., 24 Cal. 3d 809, 820, 169 Cal. Rptr. 691, (1979).

In Clark v. State Farm Mut. Auto Ins. Co., 231 F.R.D. 405, 406-407 (C. D. Cal. 2005) the court denied the insurer’s motion to strike the plaintiffs’ punitive damages allegations in a bad faith case as too conclusory under state law standards, explaining:

While California law governs plaintiff’s substantive claim for punitive damages under California Civil Code section 3294, the Federal Rules of Civil Procedure govern the punitive damages claim procedurally with respect to the adequacy of pleadings. See Bureerong v. Uvawas, 922 F. Supp. 1450, 1480 (C.D. Cal. 1996) See also, Clark, 106 F. Supp. 2d at 1018 (“Where state law directly conflicts with applicable provisions of the Federal Rules of Civil Procedure, federal courts must apply the Federal Rules-not state law.”); Jackson v. East Bay Hosp., 980 F. Supp. 1341, 1353-54 (N.D. Cal. 1997) (“[D]espite section 3294’s specific requirement that a pleading alleging oppression, fraud, or malice, these may be averred generally’”) (, quoting Fed. R. Civ. P. 9(b)). Clark v. State Farm Mut. Auto .Ins. Co., 231 F.R.D. at 406-07

The Clark court noted that whether the plaintiff would ever be able to prove the allegations made in the complaint and recover punitive damages was a wholly distinct inquiry from whether the complaint properly sought the remedy. (Id, at 407). Here plaintiff’s allegations of malice, fraud or oppression in support of her punitive damage meet the standard set forth in Clark, and are sufficient under rule 9(b).

Don’t Settle For Less on Your Homeowner’s Insurance Claims!

Your homeowner’s insurance policy provides coverage to replace damaged property to its pre-loss condition. Oftentimes your insurance company will pay to repair a covered loss rather than replace the damaged property to save money, even though California law requires replacement if the repair cannot restore the damaged property to its pre-loss condition. As a policy holder you are entitled to “replace the property with like kind and quality within a reasonable time after the loss.” (In Fire Ins. Exchange v. Superior Court, 116 Cal. App. 4th 446, 459)

For example if your hardwood floors have a beveled edge that provides a distinct appearance, yet the insurance company wants to sand the floors as a repair, if the sanding takes away the beveled edge you are entitled to replace your floors. Don’t settle for less!

Vandalism and Vacancy

UNDER CALIFORNIA LAW  VANDALISM-MALICIOUS MISCHIEF ADDITIONAL COVERAGE DOES NOT SPECIFICALLY INCLUDE FIRE OR ARSON AS VANDALISM

Under California law there isn’t one reported opinion that interprets fire as vandalism.  For obvious reasons fire is a covered peril under the standard fire policy.  (Insurance code section 2071)

In Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2012) 6B-26-27 it states:

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