The Douglas Family
On July 27, 2014 a fire caused major damage to the home owned by the Douglas family in Brentwood California. The Douglas family lived in the home for several years and it was insured under an owner occupied homeowners insurance policy. Prior to the fire, the Douglas family moved out of the home and rented it to their Son and his wife and children. Mr. and Mrs. Douglas moved into a new home about three miles away.
Prior to our involvement, the insurance company authorized the pack-out of much of the personal property inside the home to restore it from the smoke and water damage. When the insurance adjuster learned that the home was rented out, she abruptly stopped the pack-out process and sent out a reservation of rights letter advising the Douglas family that there may be coverage issue.
In order for there to be coverage for personal property under a homeowners policy, it requires that the Insured “reside” at the home listed under the policy. The insurance adjuster took a recorded statement from Mrs. Douglas who told her that she did not live in the home that caught on fire and that her and her husband rented it to her Son and his family about 2 years prior to the fire. After the recorded statement the insurance adjuster send the Douglas family another ominous letter advising that the coverage was under review and that the insurance company was reserving their right to deny to claim for the personal property.
The Douglas family contacted IPA after they received the second reservation of rights letter from the Insurance company. We immediately reviewed the policy language with regards to the coverage for the contents and we began to build our case that Mr. and Mrs. Douglas did in fact “reside” at the home at the time of the fire.
To build our case that Mr. and Mrs. Douglas resided at the home that was insured, we collected some of the mail that they still received at the house including the letter from the insurance company for the premium billing. We discovered that Mr. and Mrs. Douglas has some of their personal property inside the home and that they often spent the night there to babysit the grandchildren. Since the policy did not define the word “reside” we built our case that on this evidence. We drafted a letter with supporting documentation to make our case that the Insured resided at the insured location at the time of the fire even though they also shared residency at the other home three miles away.
Within two weeks of our (IPA) involvement the insurance company committed to full coverage of the claim for ALL of the contents. IPA also disagreed with many of the items that the insurance company was trying to clean instead of replace and we were able to get full replacement cost. We completely handled the adjustment of the dwelling and obtained an excellent settlement. We also found coverage for the loss of rents.
This case study is an excellent example of why anyone who has a large fire loss should hire a public adjuster immediately and not wait. What may seem to be simple and innocent question asked by an insurance adjuster can be disastrous if you don’t understand how your policy works.
Fortunately, we were able to turn things around for the Douglas family. If you are reading this because you have suffered a large property loss, please don’t make the same mistake as the Douglas family made and hire IPA immediately instead of waiting.