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Los Angeles Times
2 days ago
- Business
- Los Angeles Times
A bad bill to rein in insurance adjusters? Proposed state law draws fire
After the devastating January firestorms left thousands of homeowners to grapple with their insurers over complicated claims for smoke damage and burned-down houses, many turned to public adjusters for help. The state-licensed professionals play a vital role in assisting policyholders in preparing property claims and representing them in their dealings with insurers. But a bill sponsored by the Department of Insurance intended to rein in bad actors in the trade is drawing criticism from a leading consumer advocate who says it may actually make it harder for policy holders to get assistance — and discourage them from hiring adjusters. 'We want to protect consumers against ripoffs, but they're getting ripped off by their insurance companies as well. So it's really important that it be economically viable for people to hire qualified public adjusters,' said Amy Bach, co-founder and executive director of United Policyholders, a prominent San Francisco consumer advocacy group. In dispute is a bill by Assemblymember John Harabedian (D-Pasadena), whose district includes the Eaton fire zone, that aims to provide additional transparency to public adjuster contracts, including requiring a detailed description of services. But the proposed legislation, AB 597, includes a provision for contracts signed after a catastrophic disaster — such as the Jan. 7 firestorms — that limits how adjusters can base their compensation, which is often in the form of contingency fees similar to many lawyers. Currently, adjusters are allowed to base their fees on the total sum of money received by the policyholder for their claim, including any payouts received prior to the signing of contract. The bill would require public adjusters to set their compensation based only on money received after a contract with an adjuster is signed, which could have the effect of sharply raising their contingency rates. Rates are commonly around 10% or less and might rise to 20% or more as a result of proposed legislation, industry experts say. Opponents say the higher rates would discourage policyholders from hiring adjusters, potentially reducing the money they could ultimate collect from insurers. They note that major insurance industry trade groups are backing the bill. 'If you want to know how bad this bill is, look at how many insurance industry people support it,' said Gregg Clifford, president of Sunpoint Public Adjusters, a Walnut Creek firm that has lead opposition to the bill. Among the trade groups is the Personal Insurance Federation of California, which represents 12 large property and casualty insurers. It claims current laws allow public adjusters to exploit fire victims and take funds needed for rebuilding. Other backers include Los Angeles County and the California Assn. of Realtors. The state insurance department, which is sponsoring the bill, says the legislation stems from complaints received from policyholders who signed bad contracts with public adjusters that obscure how much money they will have to pay.. 'We want to make sure the public adjusters who the department license are being transparent in their contracts when they negotiate contracts with consumers, especially consumers in a disaster area who are under duress,' said Tony Cignarale, deputy commissioner of consumer services and market conduct. Florida and a few other states have similar laws. Clifford said the proponents of the legislation do not appreciate how many wildfire claims are handled by public adjusters. Policyholders whose homes have burned down often receive several hundred thousand dollars in advance payments that insurers must provide under state law, often prior to hiring an adjuster. However, in order to get additional compensation, even the initial payouts must be supported by documentation, he said. That requires adjusters to front tens of thousands of dollars to hire consultants to write building plans, hygienists to test for toxic substances and professionals for other services, he said 'We incur 99% of the costs associated with a claim,' said Clifford, who said his firm has signed up more than 150 Jan. 7 fire victims. The bill passed the Senate Insurance Committee last month and will be heard next week in the Senate Appropriations Committee. Harabedian, in an interview, defended the proposed fee change and insinuated that Bach was influenced by the president of her board, who is a public adjuster. 'I think that's something to note — draw the conclusions that you'd like there,' he said. 'No other industry, no other business practice, relies on actually taking money out of people's pockets and making a profit off of that, whether or not you actually get them any new money.' Bach dismissed the criticism as baseless, saying the matter was never brought before her board. Harabedian's office has pointed to the other consumer support the bill has gained, including from the Eaton Fire Survivors Network, which claims more than 6,000 members and has been a leading critic of how State Farm General, the state's largest home insurer, has handled smoke damage claims. Joy Chen, chief executive and co-founder of the group, said it supported the bill at the request of Harabedian's office. 'While we've not received complaints from survivors on this specific issue, we trust that Assemblymember Harabedian is working with survivors' best interests at heart,' she said. Harabedian's office also referred The Times to Hratch Ghazarian, founder and chief executive of Allied Public Adjusters in Newport Beach. He dropped opposition to the bill, like others in the industry, after a fee cap was removed, but said he understands some of the criticisms. He said he built his business on contingency fees based on the additional money his adjusters collect for a client. That requires his company to carefully calculate the potential costs of a claim before agreeing to take on the business — and he believes that model promotes transparency and can help clean up the industry. But he added it is not incorrect to say that after catastrophic losses, insurers will advance payments required by law, requiring public adjusters to justify an entire claim, often in the face of insurer intransigence. 'The public adjuster has to go in there and actually build the claim right, put a value on each respective coverage and what a lot of these carriers are doing is they're just sitting on their hands and stonewalling,' said Ghazarian, who said his firm has signed up more than 100 victims of the Jan. 7 fires.
Los Angeles Times
27-03-2025
- Politics
- Los Angeles Times
Anaheim backs state bill on Middle Eastern and North African data inclusion
The Anaheim City Council lent its full support to a legislative effort to properly categorize Middle Eastern and North African people when government agencies collect demographic data. Introduced by Democratic Assemblyman John Harabedian, whose 41st Assembly District encompasses Los Angeles and San Bernardino counties, the MENA Inclusion Act would require state and local agencies to include separate categories for major Middle Eastern and North African groups for reports published in 2027 and after. Anaheim Councilman Carlos Leon, whose district includes the officially designated Little Arabia enclave, requested a discussion and vote on a resolution supporting the bill, also known as Assembly Bill 91, during the March 25 council meeting. 'For too long, Middle Eastern and North African communities have been statistically invisible in demographic data, grouped under categories that fail to reflect their distinct cultural and socio-economic experiences,' Leon said. The proposed resolution stated that Anaheim is home to more than 20,000 people who identify as Middle Eastern and North African. Leon pointed to Little Arabia, which was designated in 2022 and now has freeway signs, in stating that Anaheim has set the standard for recognition. 'It is time for California to follow suit,' he added. According to U.S. Census Bureau estimates in 2020, the state is home to an estimated 740,000 people who identify as Middle Eastern and North African, the largest such population in the nation. For years, those communities have been grouped as 'white' on census and other forms, which has prompted efforts to more accurately collect critical demographic data. But a push to pass the bill last year died when budgetary concerns led to its suspension. The greater Los Angeles area chapter of the Council on American-Islamic Relations, which is headquartered in Anaheim, applauded the bill's revival this year. 'For too long, the Middle Eastern North African community in California has been underrepresented and deprived of resources due to a lack of accurate data collection,' Basha Jamil, CAIR-LA's policy manager, said in a statement. 'As the largest civil rights organization representing American Muslims and over 1 million California Muslims, CAIR-CA has firsthand seen the effects of this issue on the community across all spheres of life — be it in schools, social services, or courtrooms.' CAIR is one of several organizations advocating for the bill's passage as part of a MENA civil rights coalition that includes locally-based groups like the Arab American Civic Council and Access California Services. The bill's passage could have local impacts for Little Arabia. 'It opens doors to small business loans, technical assistance and equitable development planning,' Amin Nash, policy and advocacy coordinator with the Arab American Civic Council, told council members. Mayor Ashleigh Aitken and Leon sent individual letters of support for the bill. Council members made one small revision to their own resolution to read that Anaheim will 'recognize,' as opposed to 'support,' the culture and contributions of its own MENA community. With that amendment, the council unanimously approved the resolution backing the MENA Inclusion Act, which will be shared with Anaheim's state representatives, including state Sen. Tom Umberg, who is one of the bill's co-sponsors.
Associated Press
07-03-2025
- Politics
- Associated Press
Lawmakers discuss audit that found California was unprepared to help vulnerable people in disasters
Five years ago, as COVID-19 hit the state, legislators cancelled a hearing to discuss a state audit that found the state's office of emergency services and at least three California counties weren't prepared to help vulnerable people during natural disasters. That hearing finally took place Wednesday. It was co-led by Assemblymember John Harabedian, who chairs the Joint Legislative Audit Committee, and whose district includes neighborhoods impacted by the Eaton Fire in Southern California in January. He said a disproportionate number of deaths from that fire were older residents and people with disabilities. Those include the deaths of Altadena residents Anthony Mitchell Sr. and his son Justin, who had cerebral palsy. The two died waiting for assistance to evacuate. Assemblymember Rhodesia Ransom, a Democrat from Stockton who chairs the emergency management committee and who co-led the hearing, said the goal of having the hearing now was to discuss what had changed since the audit, and what gaps remained. 'Four years ago, the state auditor issued a stark warning: California was not prepared to protect its most vulnerable residents, even in a disaster. That report exposed critical life-threatening gaps,' she said, adding that the Legislature had taken some steps to address them. 'Yet today, we confront the same harsh realities … California is still not protecting the most vulnerable residents from disasters.' The December 2019 audit assessed preparedness for vulnerable populations — older adults, those with disabilities or those with limited English proficiency — in three counties that had seen the most destructive or deadly wildfires in the state's history at that time: Ventura County, where the 2017 Thomas Fire took place; Sonoma County, where the 2017 Sonoma Complex Fires took place; and Butte County, site of the 2018 Camp Fire. Among the findings by then-Auditor Elaine Howle: 1. The three counties didn't have complete or updated plans for alerting residents, evacuating or sheltering them. 2. Butte and Sonoma counties did not use available technology that could have sent warnings to all cellphones. Instead, officials sent alerts to landlines and mobile alerts only to those who pre-registered. 3. In the alerts that were sent, Butte County did not make clear that the message was coming from a credible source, and Sonoma County didn't say what the threat was in the alert. 4. The alerts were only sent in English. 5. Counties hadn't completed assessments of the county's residents to find out who would be most at risk or what resources were available to help them, such as accessible transportation or shelter space. No officials representing the counties named in the audit appeared at the hearing. County officials did not respond to requests for information from CalMatters. And while the state designates local governments as being primarily responsible for emergency responses, the state auditor also noted that the Governor's Office of Emergency Services failed to provide necessary resources to help counties with planning — including some measures required by law. Howle found that the office didn't provide guidance on identifying people with special access needs and did not publish reports on lessons learned from other natural disasters, for example. 'No amount of planning will guarantee success during a disaster, but I think a lack of planning is a contributing factor to failure during a disaster,' Grant Parks, who took over as state auditor in 2022, said at the hearing. Assemblymember Tom Lackey, a Republican from Palmdale who requested the original audit, said he was glad the Legislature was re-upping the discussion. 'Fires are going to continue to blaze, and we need to be making sure that we're not letting people die when we could have protected them through public policy and through processes,' he told CalMatters. 'We need to make sure that we're having these discussions so that we can continue to protect our people.' Have emergency evacuations improved? While the Legislature hasn't revisited the report in five years, the state and the selected counties have taken some steps to fulfill the auditor's recommendations. The Legislature passed a law in 2020 requiring the Office of Emergency Services to review at least 10 county plans each year to ensure that local governments were prepared to protect those most at risk during natural disasters. The agency reported that it has since done 32 reviews. And in 2020, the agency created a task force that includes people with access and functional needs, and has since created training programs and published guidance documents for local governments, according to Vance Taylor, head of the emergency services department's Office of Access and Functional Needs. The agency also developed a program called Listos California that created fliers and videos in different languages, and partnered with local communities to distribute information on emergency preparedness. Still, the storms that flooded parts of the Central Valley in 2023 showed there's more work to be done, including having enough staff who are competent in different languages, said Noé Páramo, project director with the California Rural Legal Assistance Foundation. Legislators flagged other areas they felt still needed more work. Harabedian said that while 32 counties' emergency plans had been reviewed, that leaves 26 counties outstanding. 'That's hundreds of thousands, if not millions, of folks with vulnerabilities who still may be in harm's way,' he said. Ransom noted that while the state agency created resources such as training courses, there was no requirement that counties participate, and no consequences for those that don't have up-to-date or adequate emergency plans. 'I know you all keep mentioning you're not a regulatory agency. I totally get that,' she said to representatives from the Office of Emergency Services. 'But there's still an opportunity to provide some oversight.' According to the state auditor's tracker of recommendations completed by counties, Butte and Ventura counties partially implemented its recommendation to update emergency plans and Sonoma County fully implemented it. Sonoma County also adopted an ordinance that emergency plans be reviewed at least once every five years. Butte and Ventura counties declined to adopt that recommendation. All three counties declined to commit to following the best practices from state and federal emergency offices. Still, while progress has been made, Harabedian flagged that similar issues arose in the recent fires. Taylor, with the Office of Access and Functional Needs, said counties have made considerable improvements over the last decade and California now leads the nation in preparedness for vulnerable people. 'We're not ready to hang the mission accomplished banner,' he said. 'We've done a lot, but a lot still needs to be done.'
