State Senator Ben Allen walked Radcliffe Avenue with this editor. He saw empty lots and was told that the major problem people were facing was insurance companies not paying out what was owed or that they were underestimating the cost to rebuild so they could pay less.

Many reports point to the slow pace of rebuilding in the Palisades.  The explanation is simple.  We, Palisades residents, are being stymied by the practices of insurance companies.

Look at how our insurance company is handling payment of dwelling claims.  They start with a fantasy lowball estimate of cost for square foot to rebuild—which no one believes can be done—and say that if we want to get the full amount of the policy, we have to start rebuilding.  The starting point should not be the fantasy number; it should be the amount on the policy that they agreed to.

In our case, in mid-May we finally received a “Structural Damage Claim Policy” totaling over 60 pages.

We had a builder, who is contracted to rebuild the house next to our now cleared lot, review the document.

After reading it, the builder said that the estimated cost to rebuild of $350 per sq. ft is “extremely low. Our projects usually start at around $800 per sq. ft. (plus or minus).”

The builder cited omissions such as a need for a soils report, which is essential before any foundation work is done.  [Our house had very deep foundations–as I saw during debris removal.] The document ignored those costs.

He writes “It looks to me like all the finishes are low…  It looks like they are giving you apartment type finishes instead of custom home.”

A preliminary review of the document confirmed this.  From ceilings to window treatments to carpets to lighting fixtures, the insurance company, State Farm lowballed everything.  The driveway estimates are absurdly low.  In the garage, they have replaced expensive heavy duty shelving units with cheap stuff and left out other shelving units altogether.

And they say we will get nothing more until rebuilding.

Our insurer has engaged in this tactic all over the Palisades. The $350 sq.ft. figure seems to be pretty typical.  It is in fact a fantasy figure.  How is it that this process starts with lowball fantasy figure instead of facts?

On our claim they’ve paid about X % and say that we have to start rebuilding before they will pay the full amount of the contract.  Given conditions it will be several years before we can rebuild.

This amounts to impoundment of money owed us, since insurance clearly will owe us the full amount, plus more with the Option ID.  By not paying us the full amount now, they are reaping interest on the difference—money which should by all rights be ours.

I’ve been trying to make the point to the insurance commissioner and other officials that a priority should be insurance reform.  Process determines outcomes.  This process needs to be challenged.  Maybe the ongoing insurance commissioner review may finally produce some action.

(Editor’s note: This letter is typical of those who have State Farm Insurance. Six months after the fire, this family has still not received full compensation and is being quoted an unrealistic amount with which to build. The writer asked that his/her identity be kept anonymous for fear that he/she might become a target. All the startup Palisades help organizations, who want to see Pali come back, should ban together and insist that elected officials require insurance companies to pay.)