Insurance Code section 2051.5 - the most important law you know nothing about.

Okay, so, the insurance code. We love it. Next to our bibles, it is our bible for insurance claims. We have discussion groups. We dream about its twists and turns, like normal people might dream about Matt Damon after a Bourne movie.

One section in particular has our attention these days. In 2004 California passed the Homeowners Bill of Rights which included Insurance Code 2051.5. It tells insurers this: if homeowners have a loss, and they fix their houses, you (insurance companies) have to pay what it actually cost to fix their houses. Not some hypothetical amount imagined by the insurer. Add up the costs, hand the insurer a bill, and that's what they have to pay.

This was a big change, because in the past insurers tended to pay an amount up front after a loss, tell the customer she can later collect a few dollars in depreciation after repairs are completed, and then disappear from the scene never to be heard from again. But now, insurers have to wait for the construction to be completed to get the final number from their customer. And when they do, they have to pay it.

We hope you won't be too surprised to learn that some insurers don't like this rule, and these insurers routinely hide it from their customers. These insurers simply lie, informing their customers that after repairs are completed the most the homeowners are entitled to is a few thousand dollars in depreciation withheld. Because most insurers (there are some exceptions, to be sure) hide these rights under 2051.5, most customers don't even know to make a claim after repairs. As a result, these insurers make way more money than the companies that follow the rules.

And trust us, we have no problem with insurers who play by the rules making money. But the law is the law--Insurance Code 2051.5 (read it) requires insurers to pay the actual cost to fix your house, after you fix it.

Go get your money - and tell them Kerley Schaffer sent you.