Uninsured Property Damage & Wildfires, with Sally Noma
How do insurance claims work with major events such as wildfires? Ever heard about subrogation? In this week's episode, I discuss insurance issues resulting from disasters such as wildfires with Sally Noma of Noma Law. Sally is an expert on subrogation and has litigated and settled many cases with large public entities. In this episode, we discuss:
What is subrogation? (01:19)
Litigation against companies who trigger disasters and damage. (03:12)
Water losses and insurance. (05:35)
Key points insureds should look for in their policies. (07:48)
Uninsured losses and options. (10:41)
Don't assume the disaster is "natural." (13:20)
Thank you to Sally Noma of Noma Law for a great discussion on a topic that is very relevant in California. Contact Sally if you or someone you know has a loss and has questions about their insurance and potential options available.
This podcast is brought to you by McKenna Brink Signorotti LLP.
Transcript
Ryan Lockhart (00:01):
Hello, everybody. Welcome to I know a lawyer. I am Ryan Lockhart, your host for the next 20 minutes or so. I Know a Lawyer is brought to you by McKenna Brink Signorotti, LLP, a boutique law firm in Walnut Creek, California. Check us out at mckennabrink.com to see the legal services and solutions we can provide you. Today's episode is about uninsured property damage and wildfires. Joining me to discuss this topic is Sally Noma of Noma law firm. How are you today, Sally?
Sally Noma (00:31):
I am doing wonderful. Thank you for having me on Ryan. I really appreciate it.
Ryan Lockhart (00:34):
My pleasure. Thank you for joining me as well. I was looking forward to this conversation. So why don't you tell the audience a little bit about you, your practice and also where can they reach you?
Sally Noma (00:44):
Absolutely. So Noma law firm is based in Oakland. We litigate throughout the state of California. My practice is based in uninsured property damage, wildfires and subrogation on behalf of insurers. I've been in this industry for about 15 years now. Really love what I do love my clients, and you can find us at nomalaw.com.
Ryan Lockhart (01:08):
Great. Thank you. So subrogation, you just mentioned that term. I know, even as a lawyer, I've heard this term, but I really don't know what it is. So let's just start there. What is subrogation?
Sally Noma (01:19):
So subrogation basically means that an insurance carrier steps into the shoes of their insured and takes on all of their rights and remedies against any tortfeasors. So in layman's language, let's say Ryan, your house burned down and you are a responsible citizen. You have insurance with Allstate insurance, the insurance is going to pay you out to rebuild the damage from your house. What subrogation means is since Allstate paid, you say half a million dollars to rebuild your house that burned down, they have now taken on any rights. You might have to try and recover that from a third party. So let's say Allstate hires me and says, Hey, Ryan's house burned down, Sally, go figure out what happened. I find out that the reason that house burned down is because there was a defective toaster manufactured by Cuisinart. Let's say I would sue Cuisinart on behalf of Allstate to get all $500,000 back. So basically it just means the insurance company is suing for you because they've paid you. But if you didn't have insurance, you would have to sue Cuisinart yourself.
Ryan Lockhart (02:27):
Wow, great. That makes total sense. So if I'm the homeowner and my house burns down, Hey, my primary concern is I just want to get my house rebuilt. My insurance company gives me that money to do that, but I'm just going to assign over any potential claims I have over to the insurance company. And that's where they go to you to go after that. So that's great. So me as a homeowner, I'm covered and I get my house rebuilt. So let's talk also about wildfires. I know this is a big area that you're in, we're in California. Wildfires are an annual event for a large part of the state. So talk a little bit about how, you know, cause you just mentioned that if it's somebody, a third party was wrong, you can go after them. But wildfires people would say, well, that's a natural event. How can you, you know, litigate over wildfires? Tell us a little bit about that.
Sally Noma (03:12):
Well, first I'll tell you about the theory as to why you can pursue public entities. So most wildfires that ended up getting litigated because, you know, wildfires will, let's just say you have a wildfire where it causes a million dollars in damage. If it was caused by some person throwing a cigarette on some grass, obviously you're never going to be able to get back anyone's money from someone who has nothing. And so you're never going to really sue or pursue it. When you see these cases that go forward, it's against large companies. And a lot of times, unfortunately in California against large utilities that have issues with their equipment and the maintenance of their equipment in California, if you are a public entity, you are subject to a higher standard. So it's called inverse condemnation. And you've probably seen it in the news with everything happening with the campfire and the North Bay fires.
Sally Noma (04:12):
But it basically says, look, if you're providing a public service and that public service goes wrong, even if you didn't do anything wrong, but that, that public improvement failed. Somehow. It's not fair to let the homeowner have to pay for that because this public service benefited the entire community, sometimes the entire state. So it's only fair to have that public entity pay the cost and then distribute that amongst anyone who was damaged. So it's basically a public policy of how to spread risk and that the risks should be born by the public entity, not by the individuals that are affected since this project has a common goal. And the providing of electricity is a common goal. And even there's a lot of case law that talks about why, even though you might be a corporation you're considered a public entity, but that's kind of boring. We'll just say for now that that's the idea behind it is that it's an idea of fairness.
Ryan Lockhart (05:10):
That makes sense. So obviously this has been in the news a lot lately with, you know, the big, the big electricity company in California, but what about other types of, you know, natural type disasters like flooding? You know, so I grew up in Sacramento. Flooding was always the main concern in Sacramento. The Sacramento would have floods every so often that would definitely impact a large part of the city. Is this the similar type of situation to wildfires
Sally Noma (05:35):
Flooding. Water losses are different in terms of inverse condemnation because if your a County or a city or whatever, and you're trying to control water, water is a lot more difficult to control that an instrumentality such as a power pole or something that you've literally manufactured and built so much more difficult to get a strict liability type of case against someone dealing with water, most waters facilities that break or overflow you're dealing with public entities that have really strong protections. So the most, other than just hopefully having decent insurance, the most kind of flooding losses that I see where I get calls from people are the types of floods that aren't covered under your home homeowners insurance, but might be recoverable against a city or a County. So for instance, here in the Bay area, we have older sewer pipes. So sewer pipes are something that are built.
Sally Noma (06:40):
It's not just water runoff that could flow wherever and who's going to really control it sometimes. But if your sewer breaks and then it floods again, your house, Ryan, I'm picking on you here, but that's okay. A lot of times that's not covered by insurance because it's considered floodwater and you might live in an area where you're not subject to floods because you no longer live in Sacramento. So you don't have flood insurance. And all of a sudden you have a hundred thousand dollars worth of water damage to your house from a flood that came in. So that is a situation where that old pipe that broke that sewer served the public by providing sewage for everybody. It's not fair to have Ryan bear the cost of that. We would ask the water municipality or the city or whatever to pay you for those damages. And that's another example of inverse condemnation.
Ryan Lockhart (07:35):
Hm. So I'm, I'm the homeowner. I have insurance. I think I'm covered what, or should I be looking at my insurance policy? What are some key points I should be looking for when I review my policy?
Sally Noma (07:48):
The big thing I would look at is what's your cost to rebuild. And do you have what they call Extended limits coverage or visual coverage. You'll see it where it says, basically if there's a catastrophe, it'll pay you 50% more or 70%, 75% more over and above what it would actually cost to build your house. And the reason that's important as again, living in California, where we have wildfires everyone and their mother is going to be, everyone's going to be trying to rebuild their house at the same time. And the cost of construction goes through the roof. So you want to make sure you have that extended coverage. So look at your rebuild cost, make sure you pay. It's a very nominal amount to have that extended limits. And the other thing to think about is what on your policy isn't covered and how do you document that?
Sally Noma (08:38):
When I represent folks that have uninsured losses, wildfires is a great example where many people have insurance for their homes. You don't really think about how many things aren't insured and that it would have been great to at least document those things. So you might have a comic book collection. You might have a piece, some jewelry that you didn't think was worth getting a special policy for, but it's meaningful to you. There are certain things that you can't get insurance for. Maybe your house has beautiful oak trees in the backyard and they burned down. Or you have a little acreage where you grow avocados or something like that. All of those things are reimbursable. If there is, you know, litigation involved, but you're not going to have a homeowner's insurance policy, that's going to pay you for your a hundred year old Oak tree that, that burned down.
Ryan Lockhart (09:31):
Yeah, that's a good point. So I had, I'm thinking about a client. I had an estate planning client who had a multimillion dollar baseball card collection. And he, I asked this question like, so do you have insurance for this? And he, he was looking at me and I could tell he was thinking his homeowner's insurance policy was going to cover it, but that the more he thought about it, he thought, no, I don't have insurance for this because it's such a unique item or collection. And so he actually went out and got some, you know, policy in place just for that specifically, because it had so much value that he could at least cover in the event that something happened to him that he could pass it on to his kids too. So great point. I had another quick question about homeowner's insurance policies. So one key takeaway, I would say from what it sounds like is don't assume your homeowner's policy is going to be totally comprehensive. And I know another issue that's popped up with some clients who have properties up, let's say farther north in California is they can't get insurance anymore because of the wildfires that have been happening the last couple of years. So they're finding themselves definitely as uninsured property. And they're worried about the next wildfire. So is there any recommendations for those types of folks?
Sally Noma (10:41):
One, I would say call the state California fair plan has, has a program for folks that are in areas where you cannot get traditional insurance. It's not cheap. And the reality is when these wildfires happen, there's a ton of people that don't have adequate insurance. So if you decide not to call California fair plan and invest in that policy, and God forbid the worst happens, I would absolutely recommend to get an attorney right away, because an attorney is going to understand how to preserve your rights, how to lay out your damages. And you unfortunately won't have the benefit of an insurance company to help you along. In most cases, if you have a loss and you have insurance, you can kind of piggyback off what the insurance company is doing, right? Because obviously Allstate wants their money back. They're going to hire experts.
Sally Noma (11:38):
They're going to do an investigation. They're going to have me involved. And so you can kind of say as a homeowner on the side, Hey, by the way I have some uninsured property damage. Can you, can you help me with that or help me find someone? And that's a huge resource. Have your insurance company kind of help you along and guide you along, or maybe even recommend an attorney if you ultimately need one, but if you take your chances and something terrible happens, I think it's absolutely worth the investment to call an attorney right away. The other thing to keep in mind is the example I gave of Ryan's house burns down and it turns out it's the Cuisinart toaster. You also want to protect your rights in the event. Again, non wildfire, your house burns down and someone thinks it's you, right? Or you're taking, you're gonna have a tenant occupied property. And there's a fire there. You might think, Oh, well the tenant caused it. And the tenant might be saying no, right. It's Ryan's fault because he didn't repair XYZ and ABC. So if you don't have insurance to protect you from potential claims, by other parties, all the more reason to get an attorney involved right away, just in case something goes south.
Ryan Lockhart (12:53):
Yeah. Great advice. I'd definitely recommend to clients who have that. You mentioned the tenant occupied properties. So they have a, you know, residential rental property. That insurance question is a different one than their own home, for sure. And it needs to be dealt with differently. So Sally, if a, if somebody out there listening does have what they think is an uninsured property claim. You mentioned you work with a lot of insurance companies, but they can call you direct. Correct?
Sally Noma (13:20):
Absolutely. I also work with folks who are uninsured. I do both. And sometimes I even take pro bono work because every once in awhile you get a tenant who has no money and their house burned down and they don't know what to do. So I'm always out helping them community. If there's someone, you know, who was a victim of a fire and is not of means I'm happy to help someone on a pro bono level. And if you are a person who's either had a flood or a fire explosion, there's all kinds of bizarre ways that your house or your business could be damaged and it's not covered. Absolutely contact me at least informally to look at your options. Because the last thing you want to do is leave money on the table.
Ryan Lockhart (14:07):
Yeah. Don't assume that because lightning struck that tree across the street and hit your house, that you have no options, at least give Sally a call to discuss it. Cause there might be something there that you can at least pursue. Great. Yeah. That actually happened to a client, lightning hit a tree and a tree hit his house and it wasn't on his property, the tree wasn't. So he thought, Oh, what can I do is an act of God. And you know, that's that term, like I said, I like to say that I dispel myths in the tax law. So I'm sure you get to dispel a lot of myths about property damage when it comes to these, what people call natural disasters when they're not always natural, there might be a cause that we can actually pinpoint to that.
Sally Noma (14:45):
So true everyone. Yeah. And there are standards of care for trees and maintenance and you have to abide it or I'll say really will become weakened and pose a serious danger and be a premises liability issue for, for that owner.
Ryan Lockhart (15:00):
Absolutely. Oh great. I had a great time talking with you today, Sally. Why don't you tell the audience one more time where they can reach you and your contact info?
Sally Noma (15:08):
Sure. Our website is Nomalaw.com and you can absolutely go on there and fill out a contract request form and look forward to speaking with you.
Ryan Lockhart (15:20):
Thank you, Sally. So Sally normally is, and I'll just say the expert in the subrogation area, she is widely known in the legal community as the go to person, especially when it comes to the wildfires because she's been so heavily involved in all the wildfire situations and litigation, especially over the last I know it's been more than five years, but it's been really heavily in the last couple of years from my understanding. So give Sally a call. Thank you, Sally. Is there anything I might've missed? You can point out or
Sally Noma (15:48):
No, I appreciate you having me on run. You're, I'm glad to have you as my attorney and you're even better podcast host.
Ryan Lockhart (15:56):
Ah, thank you. Hey, I'm getting better. I mean, it's, it's just like any other skill you gotta practice it. So the more I do that, I feel like the better I'm getting, but I appreciate the comments. Thank you very much. Alright. That was Sally Noma. Thank you, Sally. And this is, I Know a Lawyer take care of everybody. Stay safe. Bye bye.