California Homeowners Lawsuit Against Allstate Insurance

Devastating wildfires tear through California every single year. In 2018, there were 6,284 fires that destroyed 876,147 acres of land. In 2019, there were 5,456 fires that burned through 137,134 acres of land. In 2020, 8,112 fires devastated 1,443,152 acres. Just in the first half of 2021, from January 1, 2021, through May 2, 2021, there were 1,575 fires that have already destroyed 3,531 acres of land.

Wildfires are an unfortunate part of living in California. However, that does not mean that if your house is lost in a fire (or a flood, or a theft or is otherwise damaged) you should not receive the full amount of compensation you are entitled to from your insurance company. Cutter Law has been pursuing claims on behalf of Allstate and State Farm policyholders for over ten years when those insurers have over-depreciated personal property and underpaid their insureds. California law requires that personal property be depreciated based on the actual condition of the items at the time of the loss, but insurers like Allstate have been using age, without sufficiently accounting for condition, resulting in massive underpayment to Allstate insureds and an unfair windfall to Allstate.

California homeowners with Allstate Insurance with claims for the contents of their homes’ personal property should consult with an experienced law firm about how much compensation they may be entitled to. 

Cutter Law has filed multiple lawsuits against Allstate Insurance in cases that are parallel to the case that Cutter Law attorneys fought against State Farm and won just a few years ago. State Farm, like Allstate, depreciated personal property based on age, not condition, violating the California Insurance Code.

How We Fought State Farm and Won

Originally filed in 2009, the State Farm case went up on appeal, where the California Court of Appeals held that the Plaintiff could proceed with his claim contesting State Farm’s alleged illegal conduct, in a published opinion, Doan v. State Farm, 195 Cal. App. 4th 1082 (2011). On February 13, 2019, the Superior Court for the State of California in the County of Santa Clara approved the final settlement agreement between the Plaintiff Class and State Farm. The Plaintiff Class held written insurance policies with State Farm and represented a class of people that included all California residents that were insured under a State Farm homeowner or commercial insurance policy who “received a first party settlement, or offer for settlement, of a personal property claim for less than the applicable policy limits between December 31, 2004, and May 19, 2014.”

Under the settlement, the Court allowed anyone who made a claim between December 31, 2004, and May 19, 2014, for personal property for actual cash value who was not paid the policy limits, to ask for that claim to be re-evaluated pursuant to the terms set forth in the Settlement Agreement.

Brooks Cutter, the co-lead counsel of Cutter Law in this case, stated, “We were very pleased that the Court agreed with us. This is an important case because from now on, State Farm has to take the condition of the property into account and has to be transparent about how they’re depreciating property. This not only affects State Farm, but it also affects other insurance companies doing business in California.”

Members of the class action were entitled to receive complete financial compensation for any underpaid claim, plus five percent interest. In total, State Farm paid approximately $4.6 million to the class of State Farm insureds.

Why Was This Case So Important to Insurance Policyholders?

Often, individual policyholders take the settlement offers they receive from insurance companies without fully understanding the value of their claims. Those involved in any sort of accident or property damage may recognize the low settlement offer but may accept it because of the urgent bills they have to pay or other immediate needs for the money. This sets up policyholders to be at a grave disadvantage and allows insurance companies to exploit their own policyholders.

Insurance companies are focused on their bottom line, because they are for-profit corporations. They want to maximize their profits by collecting premiums, investing those premiums, and paying out as little as possible on claims to their policyholders. State Farm is not alone in using the practice of offering low settlements.  All insurance companies recognize that if they can get away with paying their policyholders less than the actual value of the lost or damaged property, they will jump on that opportunity.

In Doan v. State Farm policyholders took a stand against insurance companies and their low settlement offers. These plaintiffs demonstrated that insurance companies were not looking out for their best interests or providing policyholders with fair offers. This case allowed policyholders to hold State Farm accountable.

We are now using this case as precedent to fight for Allstate Insurance policyholders’ rights.

How Was This Case Unique?

The Doan v. State Farm case set the precedent that insurance companies must follow California law and provide fair offers for lost personal property that depreciate items based on their actual condition, not just age.

What Should You Do if You’re a California Homeowner with Allstate Claims?

If you are a California homeowner with an Allstate insurance claim for your home’s personal property, you should contact our experienced lawyers at Cutter Law P.C., who want to help you and all Allstate policyholders get all the compensation you and other policyholders may be entitled to. 

Our insurance bad faith lawyers have immense experience dealing with insurance companies who have not been transparent about how they assess claims and depreciate property. Our team is fully equipped to handle all communications as well as gather all of the evidence you need against Allstate. Contact us now for a free case evaluation.

Personal injury and civil justice attorney Brooks Cutter is a leading advocate for consumer justice and protecting the rights of the severely injured. Brooks founded Cutter Law, P.C., with offices in Sacramento and Oakland, with…
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