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7 Valuable Lessons Our Lawyers Learned From the Montecito Debris Flow Litigation

  1. We learned that many carriers were going to behave as they traditionally do, by denying claims because of policy exclusions for damage caused by flooding and debris flow. But because the underlying cause of loss was the destruction of vegetation by a covered fire, and because we were threatening bad faith lawsuits if they didn’t acknowledge coverage, they backed down.
  2. Many homes were underinsured due to agency negligence. Again, due to the threat of bad faith litigation, many carriers agreed to raise their policy limits.
  3. Many insurers were attempting to under-pay claims by using biased experts and faulty irrelevant computer software to produce low scope of loss and rebuilding estimates and by ignoring code upgrade coverage.
  4. Despite what they were going through, the people of Montecito were a model of resilience, strength, and courage. When faced with unfair claims handling practices being deployed by powerful and multi-billion dollar insurance companies, the homeowners did not back down. They escalated. And they prevailed.
  5. Most people, despite the pressure forced upon them to under-settle, hung tough until they got what they were owed.
  6. We knew and were reaffirmed that rules regulating insurance companies mean something. That the companies cannot misrepresent coverage or use trickery to underpay claims.
  7. We knew and learned to never stop reiterating the law, that an insurer cannot put its’ financial interests ahead of its’ insureds. That ambiguities in policy have to be interpreted in favor of the policyholder. And that to be enforced, exclusions or limitations on coverage have to be clear and conspicuous.