Re: Insurance Money

Payment of the insurance claim on the Lobato fire is dependent on a lot of things.

The named insured has to file a claim with the insurance carrier. In some cases the named insured has a year to do this, but most policies require the named insured to file a notice of claim immediately upon discovery of the loss. The named insured has a responsibility to notify the insurace carrier of the loss in a timely manner to protect their coverage under the policy terms.

The named insured has the responsibility of "preserving the loss" so that the insurance carrier/underwriter can inspect the loss prior to the start of repairs. The named insured has the responsibility to mitigate the damages so that additional damage does not occur. The policy gives the insurance carrier/underwriter the authority to order out their own independent cause and origin inspection of the loss in addition to an inspection by their own adjuster. If the insurace carrier issues a reservation of rights letter to the named insured, things can go south.

The insurance carrier often uses their own C/O inspection to determine the specific cause and liability for the loss. They do so in order to recover their costs where possible from a defective product, the party that caused the loss, etc. This is called subrogation in some cases. If the cause was due to negligence on the part of the named insured, they do not pay the claim. The entire process can take years or months to settle the claim. In some cases the damaged property has to be rebuilt before all or part of the claim is paid. Claims for policy limits usually settle faster if the cause is obvious.

The proceedings from previous commission meetings illustrated that they were knee deep into the claims process despite being underinsured. If the insurance carrier was backing up on payment there would have been a reservation of rights letter issued and that does not appear from the records available to have occurred. Likewise there is no evidence of an independent cause and orgin investigation initiated by the carrier. Usually this happens automatically if arson is suspected or involved.

Insurance payments sometimes do not happen until the repairs are started. Repairs started is generally defined as materials ordered, repair cost estimate approved/accepted, etc.

Given that the commissioners backgrounds are what they are, I would give them a lot of credit for understanding the claims process and proceeding in the manner that they are. I deal with insurance claims every day, some in the high seven figures. Getting paid on a claim is the first consideration for any named insured or contractor participating in a job involving an insurance claim.