Beware of Fraudsters, Says California Insurance Commissioner –

The Insurance Commissioners Office in California is putting out a fraud warning, following the devastating fores in the Los Angeles area recently;

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Following devastating wildfires which damaged and destroyed homes, businesses, and vehicles in the Los Angeles area, Insurance Commissioner Ricardo Lara put the California Department of Insurance on alert for potential fraud and illegal actions targeting survivors. The Department has posted “Don’t Get Scammed After a Disaster” tips in English and Spanish urging consumers not to rush into decisions and to report any suspected illegal actions by unscrupulous contractors or public adjusters.

Commissioner Lara also issued a Notice to public adjusters reminding them of the laws that are in place for how and when they may contact those affected by wildfires and warning them to comply in order to protect survivors. Public adjusters do not work for insurance companies, but rather work directly for policyholders who hire the adjuster for a fee to settle their insurance claim. Public adjusters’ fees are paid by the policyholder and are typically a percentage of the settled claim, which means it comes out of the funds used to rebuild or recover. Consumers should make sure they understand what is charged and the services they are paying for before signing a public adjuster contract.

“As Angelenos begin the challenging journey of recovery from these devastating fires, it’s crucial to take the time to carefully evaluate your options before hiring a public adjuster or contractor,” said Commissioner Lara. “State law prohibits public adjusters from soliciting business in disaster areas for at least seven days, providing a buffer to protect residents from any high-pressure tactics, especially under such stressful circumstances. My Department is here to support you every step of the way and can assist in navigating the recovery process to ensure you are protected and have the information you need to make informed decisions.”

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Under existing law, insurance companies are required to provide an adjuster to assist consumers with their claims. The Department of Insurance urges consumers to begin the claims process by contacting their insurance company or agent and try to settle their claims before contacting a public adjuster or a lawyer. If consumers have questions or concerns about their claim, what their insurer is telling them, or settlement offers, the Department’s consumer services team is prepared to assist — there is no charge for that assistance.

Commissioner Lara also announced free two-day insurance support workshops on January 18 and 19 in Santa Monica and January 25 and 26 in Pasadena to help survivors understand their insurance policies and the claims process, while also providing information about available resources for rebuilding and recovery. This workshop is open to all those impacted by the recent wildfires. Call 800-927-4357 to schedule a one-on-one appointment with a Department of Insurance expert.

The law limits how and when public adjusters may solicit business after a disaster. For example, public adjusters are prohibited from soliciting business from disaster victims until seven days after the conclusion of the loss producing event. Existing California law prohibits a public adjuster from soliciting a policyholder for employment or initiating any contact with a policyholder between the hours of 6 p.m. and 8 a.m., unless requested by the policyholder.

Also, a public adjuster may not solicit a policyholder while an evacuation order is still in effect. Further, since these fires are considered a catastrophic disaster, a public adjuster must wait until seven calendar days have passed from the conclusion of the evacuation order before they can solicit their services. Since most fire areas still have evacuation orders in place, the seven-day waiting period has not yet started in these areas. All public adjusters must comply with California’s Public Insurance Adjusters Act relating to licensure and consumer outreach, among other requirements. All public adjusters have been advised of these rules.

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Existing California law also limits how public adjusters are compensated and what they are required to have in their contracts for service. Some public adjusters may insist on a contract that includes payment to the public adjuster based upon the entire amount paid to the policyholder by the insurer, including amounts paid to the policyholder before the public adjuster contract was signed. Anyone who experiences this issue is urged to contact the Department for assistance.

The Department has resources for disaster survivors and strongly encourages consumers to check out these resources, including how to avoid scams after a disaster as there is often unscrupulous individuals who try and take advantage of disaster survivors who can be vulnerable during a challenging time. Consumers who have questions on their insurance or wish to file a complaint against a public adjuster can do so on the Department’s website or by calling 800-927-4357.

The Department urges consumers to check the public adjuster’s license and make sure they are properly licensed and in good standing by visiting the Department’s website or by calling 800-927-4357.