State Farm policyholders ought to pay attention to its firm’s water harm claims processes, as famous in State Farm’s Water Protocol. After studying the information and allegations of a latest water declare denial, I’d recommend in addition they ought to be involved with alleged consultants offering opinions about the reason for water losses.
These are a number of the allegations of information that the policyholder reported earlier than the knowledgeable was retained: 1
[H]eavy winds and rains handed by Plaintiff’s Property. The heavy winds precipitated tiles to fall from his roof which allowed rainwater to penetrate into his house, inflicting substantial harm all through the Property. (PAF 5) Following the February 21, 2023 windstorm, Plaintiff seen massive quantities of water all through his house. Plaintiff promptly positioned towels all the way down to dry out all noticeable moist areas inside his house. He additionally contacted Glenn Herrara at Skyline Builders to cowl the roof openings brought on by the February 21, 2023 windstorm (PAF 6). Regardless of Plaintiff’s efforts to mitigate and clear up the water damages, he noticed water damages all through his house together with harm to the hardwood flooring, staining within the ceilings, harm to the French doorways in the lounge and primary hallway, and discoloration and water damages in and round his kitchen and cupboards, amongst different areas all through his Property. . . .
Previous to the February 2023 windstorm, there was no proof of any discoloration, cracking or another damages to the flooring, partitions, French doorways or kitchen areas. Plaintiff resided within the house since 2005 and would have realized these damages in the event that they have been current earlier than the windstorm. The damages, which have been something however minor, arose on or after the February 21, 2023 windstorm. (PAF 8). Plaintiff has at all times saved his Property properly maintained. He at all times promptly employed somebody to examine and restore any and all current damages. In 2017/2018, Plaintiff’s house sustained damages and he pursued a proper declare along with his insurance coverage service at the moment. Nonetheless, Plaintiff ultimately employed Mr. Herrera to restore these damages and paid Mr. Herrera out of pocket to repair the foundations of the house (re-supporting), repairing the cracks within the ceiling and partitions, and changing the flooring. (PAF 9). Following the repairs carried out by Mr. Herrera in 2018, Plaintiff by no means noticed another damages to his house till the February 21, 2023 windstorm occasion.
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Right here, the extreme windstorm allowed heavy rain water to penetrate into Plaintiff’s house. (PAF 5). The February 2023 windstorm occasion precipitated intensive, instant harm to the structural parts, together with the roof, flooring, partitions, doorways, framing and home windows. These damages arose after windstorm occasion, and weren’t pre-existing in nature. (PAF 8-10). This was initially confirmed by State Farm, who acknowledged that the damages to Plaintiff’s Property resulted from the wind/rain storm occasion on February 21, 2023. Extra particularly, State Farm’s personal adjuster inspected the Property and confirmed that the damages have been the results of the windstorm occasion, which invoked protection below the Coverage, prompting State Farm to concern a fee of $71,594.55, representing State Farm’s complete evaluation of the damages associated to the Water Harm Declare. (PAF 27). State Farm’s estimate and fee accounted for the water harm to the partitions, doorways, framing and home windows. (PAF 27-28). Thus, when fee was made to Plaintiff, protection was not in dispute. Nonetheless, given the numerous distinction between State Farm’s estimate of $71,594.55 in comparison with the estimate from Plaintiff’s contractor within the quantity of $760,340.21, State Farm “tried to reconcile” the estimates to find out if additional fee was owed and due. If reconciliation didn’t work, State Farm knowledgeable Plaintiff that it’ll rent a 3rd occasion to supply an estimate of repairs. (PAF 26). In different phrases, State Farm led Plaintiff to consider that the one concern in dispute was the worth and scope of the coated water damages between the 2 estimates.
As a substitute of reconciling the 2 estimates to find out the true worth of the scope of repairs for Plaintiff’s broken house, State Farm shortly switched gears and retained a ‘trigger’ knowledgeable. The one seemingly motive why State Farm would retain an knowledgeable to find out the reason for damages it had already paid for is as a result of State Farm realized that Plaintiff’s estimate was extra in keeping with the precise damages sustained within the Water Harm Declare and that it had underpaid and undervalued the damages to Plaintiff’s Los Angeles house. State Farm’s retention of Engineering Methods, Inc. (‘ESI’) was deliberately set as much as create a protection dispute. To no shock, State Farm’s retained engineer got here up with the acquainted causation protection of ‘pre-existing damages’ to defeat fee of what was initially a coated declare.
What does the policyholder argue about State Farm’s water harm trigger and origin consultants?
ESI inspected the property on October 24, 2023, eight months after the windstorm occasion and over 4 months after Plaintiff reported the Water Harm Declare to State Farm. (DAF 4, PAF 31). Six months after inspecting Plaintiff’s property, ESI submitted its report back to State Farm, setting forth their alleged opinions and conclusions as to the trigger and origin of the Water Harm Declare. ESI basically concluded that all the harm to the inside and exterior of the house was pre-existing and resulted from age, deterioration, deficiencies within the design and building of the house, lack of routine upkeep and repairs, amongst different issues.
All of ESI’s conclusions are based mostly on defective and inaccurate assumptions and/or are contradicted by substantial proof on this case. Particularly, whereas ESI concludes that the water harm noticed was the results of ‘age-related deterioration’ over a protracted time frame, conveniently omitted from ESI’s report is that it inspected the house eight months after the storm. In different phrases, whereas ESI assumes that the damages pre-dated the loss, ESI performed its investigation 8 months after the water harm loss occurred and did not seek the advice of with witnesses with private data of the pre-loss situation of the inside parts of the house, most importantly, Plaintiff himself. Had ESI communicated with Plaintiff himself, ESI would have realized that the alleged ‘preexisting’ damages and deterioration it noticed didn’t exist previous to the Water Harm Declare and as a substitute, Plaintiff noticed all of those water damages after the February 2023 windstorm occasion. All different damages had been well timed repaired.
ESI doesn’t determine case-specific proof of gradual results of wear and tear and tear and earth motion to the Property over time. ESI did not account for the truth that the windstorm occasion occurred eight months previous to the time the water intrusions occurred and thus, can not say when the harm occurred and didn’t carry out any analysis of how lengthy it could take for such alleged ‘pre-existing’ circumstances to look. Equally, there isn’t a proof that ESI had or requested for pre-loss images of the inside of the house. ESI didn’t converse with Plaintiff earlier than concluding that the damages have been brought on by lack of routine upkeep and repairs. ESI’s conclusions are additionally refuted by State Farm’s declare file which acknowledges proof of prior repairs to the house. (PAF 52). ESI’s conclusions are additionally refuted by State Farm’s declare adjusters who decided that the reason for the damages was the results of the windstorm occasion and the opposite adjuster, Mr. Thomas Jones, who agreed with Plaintiff’s flooring knowledgeable that the strong oak wooden flooring all through the house wanted to get replaced for a uniform look.
ESI recognized 4 doable causes of the damages however failed to clarify how any of them precipitated the harm or was the predominate reason behind damages to the house. ESI has no thought how a lot water entered the house on February 21, 2023 and if these water intrusions precipitated the damages noticed, but, summarily concluded that all the damages have been pre-existing and attributable to every part however the windstorm occasion.
On this case, the court docket declined to grant State Farm’s movement for abstract judgment, 2 indicating that the policyholder ought to be allowed to show the information and allegations in regards to the mistaken, biased, and final result oriented claims investigation and that discovery ought to proceed. So, there could also be extra to report about this case sooner or later. For all we all know, the ESI consultants and State Farm could also be completely proper.
Alternatively, many people are skeptical of consultants, and I famous and offered an instance 16 years in the past in Insurance coverage Firm Specialists Are Typically Biased And Consequence Oriented. The sentiment might greatest be described in my publish, The Plague of Incorrect and Insurer Worded Engineering Studies by Insurance coverage Firm Retained Engineers:
Right now’s weblog just isn’t going to endear me to HAAG, Rimkus, JS Held, and different usually retained forensic engineers working for insurance coverage corporations. These engineering and consulting corporations are massive enterprise. A lot in order that Sedgwick, a big impartial adjusting agency, has acquired a variety of these engineering corporations. I can think about a lot of you questioning how an adjusting agency representing the insurance coverage firm’s curiosity can acquire an impartial and trustworthy opinion below such circumstances.
Many skeptical public adjusters, contractors, and critics inform me that they don’t have to attend to know what the engineering report goes to say if a sure engineer has been retained. Not solely are the scientific findings adversarial to the policyholder, however the wording of the report additionally inextricably dovetails with the insurer’s exclusionary or limiting coverage language. It’s a lot simpler to show that an engineering report’s conclusion is mistaken than it’s to show that the errors and mistaken conclusions have been the results of bias or an outcome-oriented way of thinking.
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I not too long ago attended the Georgia Affiliation of Public Insurance coverage Adjusters assembly, the place an knowledgeable in hearth harm and remediation gave a rare admission in regards to the kinds of monetary stress positioned upon forensic consultants concerning their stories. He defined how his testing resulted in conclusions that infuriated the desk adjuster, who must pay extra on the declare. Slightly than ship his report back to the policyholder, it was buried. The desk adjuster employed one other knowledgeable who carried out totally different testing to reach at an inaccurate conclusion. Ultimately, the reality was uncovered. His level was that this was not an remoted occasion and that many adjusters, sadly, will not be searching for the reality however a report which results in much less paid on a declare.
One motive I wrote Supporting the American Policyholder Affiliation With Time and Cash Is an Obligation If You Are a True Policyholder Advocate, is due to the APA’s warnings about final result oriented stories. The engineering stories typically appear to dovetail with exclusionary language from the coverage. Policyholders have motive to be skeptical.
Once more, the findings of this lively case might be sorted out later. The teachings are that some insurers have claims processes designed to not pay sure claims and that skepticism is deserved when studying the insurance coverage firm’s knowledgeable trigger and origin report.
Thought For The Day
“Blinding ignorance does mislead us. O! Wretched mortals, open your eyes!”
—Leonardo da Vinci
1 Oakenfold v. State Farm Gen. Ins. Co., No. 2:24-cv-07455, [Doc. 32], 2024 WL 5337691 (C.D. Cal.).
2 Oakenfold v. State Farm Gen. Ins. Co., No. 2:24-cv-07455, 2025 WL 574629 (C.D. Cal. Feb. 14, 2025).
