Home insurance policies for homeowners – Radio Guesting Mar 2, 2022

Home insurance policies for homeowners – Radio Guesting Mar 2, 2022

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At FR Law Group, we approach the law from a business perspective, because we share your business mindset by representing hundreds of companies over decades. Our firm has the business acumen necessary to help your company create a sound budget, while avoiding the usual pitfalls. Get the benefit of our national level experience without the national level priced, FR Law Group, the right team to have on your site, Call 602-566-7425 or visit frlawgroup.com.


So welcome back, everyone. My next guest well,they have been on with me quite a bit, but let me just go ahead and introduce her. I have with me Rita Gara and she’s one of the partners of FR Law Group. Welcome to the show. First of all, I want you to get up on the mic so everybody can hear you and tell everybody a little bit about you and what we’re going to talk about today.


Sure. So like I said, my name is Rita Gara and I work with the FR Law Group. We are a smaller law firm, but big on experience.. We do a lot of insurance recovery work, we work a lot with construction companies and we do a lot of contract work. What I want to talk about today is kind of how those two converge.


Well, let’s talk about homeowners because normally they talk a lot about business and they talk a lot about construction people, but homeowners are almost everybody that is owning a home and who has bought insurance. The first thing before you even came on here is, you said, everybody gets insurance for their home, but they never look at it again. Let’s talk about some of the things that you wanted to talk about. Just for starting off there, everybody should really dust off your contracts with them?


Yeah, you think about the timeframe when you’re buying a house and you’ve got so many bigger things to think about. That’s kind of the home insurance policy, you gotta do it. You meet with your insurance agent, sign it, you trust them. Some of these provisions can be 40 to 50 pages. I think it’s the rare person who’s going line by line and making sure you trust your insurance agent. And I think the other thing is, when you’re buying a house and this is a big expense, you don’t necessarily also want to pay the most for insurance, you know? “What’s the one with a bigger deductible, so I get a lesser premium”. And then you walk out that door and I think a lot of people never think about it again, which can be a really big mistake that can affect you later on in the unfortunate circumstance that you may need to use it. So I think two main issues with insurance coverage to think about, so you don’t end up in a problem, is #1 Do you have enough coverage? Are the amounts that you have enough to cover rebuilding your home the contents that you have in your home? There are some surprises about how far that coverage goes that we can talk about later. And then the other thing is, which I don’t know that a lot of people realize is, it’s not just this insurance policy that gives me payments. You may have obligations to keep certain provisions in that contract viable. So you’re paying premiums. I’ll give you an example. So typically, a homeowner’s insurance policy is going to have a lot of different things that it covers, but we’re gonna talk about three main things when it comes to your home. So in the event you have some sort of damage, flood or earthquake, fire. You know what happens a lot?
Like lightning strikes a house and you get triple whammy. You get the lightning strike and you get damage. You have an ensuing fire and then you have the fire trucks coming in and dumping a lot of water on your home.


That’s damaging.


That’s damaging. It’s good you want that fire out, but you’re gonna have water damage, you’re gonna have smoke damage, you’re gonna have fire damage, you’re gonna have structure damage. So you’re going to be looking at primarily a couple different areas of coverage, the biggest one being your dwelling coverage. How much is it going to cost to rebuild that home and what kind of coverage do you have? So different insurance companies do it different ways and there are add ons you can purchase you or may have purchased. So let’s just say for example, you bought the house it’s $200,000 house and you want dwelling coverage of $200,000. If you don’t do anything with that insurance policy for 10 years, you think about it if you bought your home and lived in the Phoenix or Scottsdale area. If you bought your home 10 years ago, is that dollar amount going to rebuild your home today? Not a chance. And so are you covered in that instance? And if not, what can you do? So one of the things people do in a product that insurance companies offer will be these add ons or endorsements. So instead of getting the depreciated value of your home in benefit, you’re going to pay a little bit extra a month for a replacement cost. So that $200,000 home today costs $500,000. To fix, you’re going to get the $500,000. Great. However, those provisions often have obligations that you have to comply with that you may not remember.


What would it be? What would one be? Just as an example. What would be something?


Two big ones are, and it makes sense when you think about it, the insurance company wants to make sure they’re getting the premiums on that higher value of your home. So for example, you move into a brand new home— it might not be brand new, but brand new to you and the bathroom is from 1970 and you would like something a little more modern. So you upgrade the bathroom. There might be a provision in there that says if you spend more than $5,000 on improvements, you have to notify your insurance within a certain timeframe for that.


Now, how many people think about that? Probably mostly they don’t.


And think about the improvements you can do on your home that will total $5,000 real fast. You don’t want to be arguing with them in a time of need, that they didn’t really total $5,000.


So it comes down to this, and we’ve talked a lot about this with the FR Law Group, it’s all about the contract. It’s all about knowing your contract. Now, let me ask you this. Let’s say someone’s listening, and they want to call in and say, “hey, do I have enough coverage?” Why call an attorney? When do you come in?


That’s a great question. Throughout a process like this, if you have some home damage you could need to repair. There’s maybe several points that it would be really helpful to have an attorney. So I think the first thing in terms of whether your coverage is enough, you want to talk to your insurance agents and figure out what makes sense for you. Maybe have that conversation after the closing of your home is done when you have a little bit more time and space to think about what you really need. In terms of attorney involvement, where we see problems is, okay so now that the natural disaster has happened. Think about for a minute or two in that moment, all of the things you’re dealing with on top of worrying about insurance coverage. So on a base level, you’ve got a destroyed home and you and your family are displaced now. So you have to find a new place to live that’s appropriate, you have to figure out how that’s getting paid (which comes back to insurance coverage), and you have to go about. I mean, we see people who have to get abatement remediation to deal with the smoke damage, the water damage, you’re hiring a contractor and you’re signing contracts at a time when you’ve also perhaps lost your wedding album and you’ve lost, all of your clothes, your child’s baby book. So it’s overwhelming. It’s emotional and then you are signing contracts that perhaps you could really use the benefit of having an advocate.


Well, let me tell you. What you speak to me, I went through. Okay? Well, I lost my house in the Northridge earthquake. Now, did we have insurance? Yeah. But guess what? Everybody thinks that they’re here to help and they do. They sound like they have on television, they do. They sound like they’re gonna help. They don’t help. Okay? They don’t help. And by the way a big huge company, I’m not gonna bring them up, they were sued later on and it was devastating. I can understand what you mean when you say, when you lose your home. And I mean I’m telling you, that could be as bad as when you’re listening to what you’re saying, even when you have had a fire. A lot of people here get lightning that strikes their home? And boom, now you got all of this stuff going on and it’s very hard. I can relate.


Yeah and I think that, on top of that, you’re going to have issues which we see all the time. This is another area where engaging with an attorney can really help you in those initial stages when you’re overwhelmed, you’re dealing with all this, you’re going to have an adjuster from the insurance company and you’re going to have the contractor and they might be arguing about how much really needs to be replaced. The contractor is going to say, “we got to pull out this tile floor, it’s damaged and waterlogged and whatever and I’m not comfortable not replacing it” and your insurance adjuster is going to say that “you don’t need to do that.”


Then go to Home Depot. I know. Let me tell you here what we’re gonna do, we’re gonna go for a break. When we come back, we’re going to talk further. So interesting. It really does almost hit anybody who’s a homeowner here. It’s all about knowing your contract and having somebody that can help you. Especially if something’s going wrong right now, I’m sure a lot of people are, that you can call an attorney and have them stand by you and help you through that. Okay their phone number, it’s area code 602-566-7425. They do free consultations. That’s where you come in and sit down and talk to them and find out how they can help. Hang tight. We’re going to be back in just a second.


So welcome back everyone. We’re talking about our homeowners insurance and how when something goes wrong, that’s when we find out that we weren’t covered enough and it happens probably more than not. Right? Would you say that? Come up on the mic. And you also said you wanted to talk about delay. She had delay written in big letters. Well you know, every single time anything happens, there’s a delay. And it really could be very harmful but you could help with that. Let’s talk a little bit about what you mean by that


We can and I think everyone in these COVID times understands delay a lot more than we did before and there certainly are going to be some delays that we’re looking at that you can’t do anything about. If the products not there, the chip’s not there for your appliance—

You can’t complain about that.

You can’t do anything about it but I think that sometimes people maybe wait too long to get some help and something that they might be not sure how to negotiate or handle. So let’s just say for instance that a home rebuild project has started and you’re starting to suffer delays. There’s a couple things that can be affected that you might want to a.) understand and then b.) to get help with. In the middle of a project, we sometimes get homeowners who are super frustrated because they’re 50% of the way in yet 15% of the work has been done. When I say 50% of the way in, I mean timeframe. They estimated the rebuild was going to take six weeks. They’re at six months and barely anything has been done. What do you do? And then you’re faced with can I get out of the contract? If I can, do I want to get out of the contract because it’s going to put me back? How much money is it gonna cost me? How much time is this going to—


Or “I’ve already done this much time.”


Yeah. We had somebody who was afraid to talk to the contractor and that sounds silly, but not everybody has the same comfort level in terms of negotiator.


Or they talk too much. That’s another problem.


Right. So I think one of the things too that we can do before it gets to something that’s really contentious is, if you’re having a problem with the delays, you can call us and we can sit down and meet with both the parties and say, what’s going on here? How can we resolve this? What deadlines can we put in place? What’s reasonable to expect? It’s kind of that middle ground before,you’re raising it to a 10. Because I tell you these delays, which don’t seem to be letting up anytime soon, really affects your wallet. One of the things—going back to coverage is another area of coverage that you’re going to get called content coverage. So you think about when you have damage like what we were talking about and you’re going to lose your sofas, your socks, your pictures hanging on the wall, depending on the kind of damage. Well you think when you went in and signed up for that insurance that you’re going to get. Let’s say you sign up for a $100,000 worth of content coverage, you know what else comes out of that content coverage is there’s going to be a company who’s going to review your contents and decide if they’re salvageable or non salvageable. And you’re going to pay for that evaluation out of that $100,000. Then they’re going to take those salvageable items, and since your house isn’t done yet, they’re gonna have to first, they’re gonna have to clean them and you’re going to pay for that cleaning, and then they’re going to have to pack them and you’ll pay for the packing, and then they’re going to have to store them. So if this six week project turns into a 12 month project— we have had people’s content coverages depleted by more than 50% and they thought that money was going to be there to buy that new couch to buy the entryway rug. So what you are looking at in the middle of this is having this coverage fly out the window faster than you can spend it on things you anticipate spending on. So having that intermediate action, you know, engaging with an attorney and finding out what can I do to manage that time before it’s too late?


I think also as people— I love my show and I say it so much and the reason why I do is because of the information that they hear. And this is also something, if you know somebody that’s dealing with this, I’m going to talk about some of the old folks out there right now for a second because a lot of them will just accept what’s going on. You know? Because they might be frustrated, but they don’t know what to do. They might talk about it to their family and nobody knows that they can really actually call someone, let’s say like you, that can come in there and be their advocate for them. It’s important. So many people go through these kinds of things. Like floods. It could be just floods that happened through your house, from your washing machine, we’re not just talking about huge floods here. You know, we are coming upon the season too with monsoon season and might have your roof get blown apart or things that happen that you really need to know that you have the right. You have the right. I think that’s what people also need to understand, they have their right to find out what kind of representation they can have to help them.


Absolutely. I think sometimes people think of attorneys as the end game. You know? It’s at that point where you want to file a lawsuit and lawsuits are expensive. So oftentimes, if you understand you can engage and get advice or get negotiating help in the beginning and in the middle, you don’t ever get to that endpoint. We had a case, it was an elderly couple, it was really heartbreaking to see some of their communications with their insurance company practically begging for information. “I don’t understand how this works. I’m relying on you to tell me”. Some insurance companies are great and they’re great with reminding you “do you have enough coverage? Come for an appointment.” but some don’t. If you are not familiar with that process because— hopefully you haven’t been through something like that before— you also, again with all those things we talked about before that are going on that you have to manage and negotiate. It can be overwhelming and you may not be relying on the right person to give you advice,


Right and you shouldn’t rely on yourself. I mean, a lot of people will try and do some things on their own and that’s just not a really good idea. Especially when you’re talking to an insurance company. They know it’s a game and they know what they’re saying to everybody. The best thing to do— you do free consultations for everyone— have that consultation with them. You’re located right here in Phoenix, but you can help anyone nationwide.


So anyone, even with this coverage that we’re talking about somebody that doesn’t live here that’s listening nationwide, they can also call you and talk to you?


We can certainly do a consultation and if there was somebody who’s better situated, we could address that but we can absolutely do that consultation.


Phone number 602-566-7425. Their website is frlawgroup.com. You know managing these issues, let’s talk for a second about the rebuilds because we have a few minutes and I want to talk about that. Because you’ve mentioned rebuilds and add ons. Okay. A lot of people do that and a lot of people are doing that. What happens then?


Yeah. So in terms of you mean like adding on to your home? Or—


Yes. So yes, anything when they do some kind of work to it, or they are going to start their own project.


So the biggest thing, if you are in the process of doing that now, is to dust off as we talked about dust off that insurance policy and see what obligations you have. I think a lot of people when they do the rebuild they always think of the code or the ordinance. They don’t want to get in trouble with the city, or you’re pulling a permit. The other part of it though is, look at your insurance and see what your obligations are and if you’re not sure, talk to your insurance company and of course, you can always call us and we’ll help you through that.


And having a consultation with you. And again, for you, what do you find the most common issues that happen?


I think it’s the lack of understanding what your coverage is.


Okay, so that’s the number one. What’s number two?


Number two is understanding that you want to address delays or how you manage your interests. You know, that contractor is going to manage his interest in that contract. You want to manage your own as well and make sure that you have somebody looking out for you.


When’s the right time to call an attorney?

Before you have a problem.

Before you have a problem? But you never know. So what do you do?


Yeah, so you do the best you can and then at the first hint of a problem, you call and say, “Can you help me out here” and then hopefully, nip it before it gets—


Nip it in the bud?

That’s right.

That’s what it’s all about. Again, they can work nationwide but the best thing to do is to call them and have a consultation. Maybe it’s you right now, that is dealing with something that you’re already fighting. You don’t need to fight, you don’t need to take on these issues yourself. You need to make sure that you have an attorney that can help you and stand by you, represent you and give you that. And there’s nothing like having your firm, because you are like the big guns but you do things for people on the small level. Let’s talk about that.


Absolutely. We really do try. Some of the attorneys come from those big national or international firms and they really started up our law group to be able to give a different kind of service to a different kind of client. So we really do pride ourselves on having an individualized approach that we really want to look out for you.


Right, and this particular topic is so universal.


And again, what you’re saying is the most important thing is first of all dust off those contracts, read them, go through them, understand them. If you’re doing something, a lot of people do start building and doing repairs or doing upgrades, make sure that you’re taking care of it and that your money that you have with you normally, would cover that and will cover what you’re doing new.


Right. So when you’re talking about homeowners here, what’s the worst thing that’s ever happened that you’ve had, I’m sure there’s been a story.


I mean, I think the worst is you have people who are displaced from their home, they end up getting a bill close to $200,000. The repairs weren’t done and now they have an unfinished home, a lawsuit and they’re still dealing with the trauma of losing their home.


Call before something happens. That’s what it’s all about. And we’ve been talking about this with FR Law Group, it is all about your contracts and understanding them and knowing that you can call an attorney to have them represent you. I think it’s really important, especially here. We have people that live here by themselves, their kids live out of state and a lot of times they don’t communicate with one another because they’re embarrassed by what’s going on, but you know what? You need to know that you have representation, it is your right to do so. Again that phone number to call them directly is 602-566-7425 it’s frlawgroup.com.