Along with everyone else in the country, I watched the flames consume Southern California and was glued to the footage of the horror.
Unfortunately, I know firsthand that the real disaster begins after the flames have died. Bad as losing a home or business to fire is, dealing with obstructionist insurance companies can be worse.
Oh, California, brace yourself.
To understand why, you need to grasp string theory: Everything is connected. A butterfly sneezes in Brazil and causes a tsunami in Taipei. A fire at one end of town makes insurance representatives form a group huddle, then run to the last three places on Earth where there’s no cellular service.
Two years ago my husband and I awoke to the surreal news on our radio alarm that a store located at the same intersection as our car-repair business was on fire. Wait, it was our store!
We made a pajama-clad dash to find our business insurance policy. Whew! We had fire liability coverage, contents coverage, plus business interruption.
Silly us. We didn’t realize that insurance protection is to real security what duck-and-cover drills are to nuclear attacks.
For reasons that remain unclear, our insurance company didn’t pay for this loss. This is a head-scratcher because we’d been paying $500 a month for fire insurance. Worse, for five months, the company kept assuring us we were covered. We have a tape-recorded message left three months after the fire saying the check was on the way. Only it wasn’t.
See, behind the scenes paper-pushers were poring over the 15 pages of fine print attached to our policy’s cover page – the loophole language. This language is so confusing that only six people in the country can read and write it. These same people can read the same policy, disagree on what it says, and get paid a lot. Meanwhile, we lost the business.
Six months after the fire, an insurance company attorney wrote a letter saying, uh, actually, there wasn’t coverage. Then two other attorneys read the policy and said there was. Then everyone got quiet for a long time and sent lots of letters.
Now an overworked judge in Denver, who at this very moment wishes he’d gone into art history, is slogging through a 2-foot stack of attorney-generated “briefs” to determine whether we had coverage. His verdict will mean I either get to pick up where life dropped my family like a hand grenade two years ago, or I’ll be writing about apartment living.
But back to string theory and Brazil’s butterflies. Because of one errant spark in a roof at 5 a.m., money that could have gone to my basement project, or the kids’ college fund, or a vacation, or to a spa makeover, which I could sorely use, has instead funded lawyers, whom we have been paying frequently via armored car. As a result, a flock of attorneys was recently sighted vacationing in Brazil, causing a rash of butterfly sneezes.
Marni Jameson is a nationally syndicated columnist who lives in the Denver area. You may contact her through .
Good policy for policies
According to the National Association of Insurance Commissioners, three-fourths of Americans insure their homes against fire, theft and other damages. The California fires should make us all take another look at our protections and fill any gaps. Follow these tips from the NAIC:
Ask what your policy doesn’t cover, says NAIC spokesman Scott Holeman. If flood or earthquake damage, expensive antiques or artwork aren’t covered, ask your agent about extending coverage. Whether you’re insured for replacement cost or cash value also factors in. (Replacement coverage costs more.)
Get everything in writing from the insurance company right away, including what they will cover and what they won’t cover and why.
Carry insurance on anything that matters: home, life, car, health, jewelry, business. Just know that insurance is not assurance. As my lawyer says, insurance companies are experts at collecting premiums, then finding ways to avoid paying claims. According to a recent New York Times article, the property insurance industry reported more than $450 billion in policy sales last year and a record profit of $65 billion.
Reduce your premiums by installing smoke detectors or burglar alarms, having good credit and combining home and auto policies for a multipolicy discount.
Beware of scams, particularly fraudulent agents selling fake policies. Check with your state insurance commissioner to see whether the company is legitimate. If a company acts in bad faith, contact your insurance commissioner. You can also find consumer support on the NAIC website, .
Keep your perspective. It’s easy to get cynical. Many insurance companies bank on burning you out. Don’t let them win. Lawyer up, and fight. Fires and floods happen. Things you count on, like insurance, disappoint. But while you wait out life’s curves, live, love and be grateful for what you do have. As a wise old bookkeeper I once worked with used to say said: “Be glad it’s a problem money can solve.”
Indeed. Good luck, California.
