S.F. Chronicle Article Details Problematic Insurance Company Practices for Smoke Damage Claims

The San Francisco Chronicle published an exposé Dec. 18 about how insurance companies use hidden cost-cutting restrictions to reduce required payouts for soot and ash damage.

According to the article, “These restrictions are spelled out in a patchwork of documents that state regulators do not routinely examine. When homeowners subpoena these records in court, insurers generally file them under protective orders, keeping them concealed from the public by characterizing them as proprietary.”

The newspaper’s reporters obtained hundreds of these behind-the-scenes rules from nearly every major insurance company, according to the article. They also interviewed dozens of adjusters and contractors and uncovered common insurance company practices, such as reducing estimates in small ways, which eventually add up to payouts that are reduced by 25 percent or more. Companies apparently attempt to avoid paper trails by communicating denials verbally, instead of in writing. They also often use the software Xactimate that underestimates costs, and they place restrictions on contractors, such as not allowing them to charge for protective gear, like gloves and hazmat suits.

About three dozen fire victimes were interviewed, and they shared that “insurance companies ignored government directives and doctors’ recommendations advising them to test for and clean homes of lead, drastically underestimated the cost of their repairs, and delayed one step of their recovery after another.”

The article can be found here.