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CA Department of Insurance
CA Department of Insurance
CA Department of Insurance

Residential Property and Earthquake Claims Mediation Program

(Revised November 2019)

What Is Mediation?

It is an informal, inexpensive, and non-adversarial way to resolve your dispute with your insurance company.

Mediation is a process by which you and the insurance company submit your dispute to a neutral third party (the mediator) that works with both of you to reach a settlement of the dispute.  The mediator has no power to impose an agreement on you; only you can decide to settle your case.  One of the purposes of mediation is to give you the opportunity to tell your insurance company your perspective regarding the dispute in a joint session.  

In private sessions held with each party, the mediator separately tries to promote a candid discussion of the issues and priorities of each party.  Gaining knowledge of facts from these meetings, a mediator can use the information learned from each party to:

  • Reduce the hostility between the parties and help them engage in a meaningful dialogue on the issues at hand;
  • Open discussions into areas not previously considered; 
  • Communicate positions or proposals in more understandable terms;
  • Probe and uncover additional facts and the real interests of the parties;
  • Help each party to better understand the other party’s views and evaluations of a particular issue, without violating confidences;
  • Narrow the issues and each party’s positions, and deflate  extreme demands or positions;
  • Evaluate the receptiveness for a proposal or suggestion;
  • Explore alternatives and search for solutions;
  • Identify those issues of importance to each party and those that may be more easily dispensed with;
  • Structure a settlement to resolve current problems as well as to meet future needs of the parties.

The mediation is non-binding, which means that neither you nor the insurance carrier is legally obligated to accept an offer made by the other party.  Even if you do agree to settle your case in mediation, you have three business days to change your mind.  If you change your mind within this three-day period, you must inform the mediator of your decision.  Please note: If you are represented by an attorney at the mediation conference, and the attorney signs settlement-related documents, the settlement is immediately binding.

If the mediation is unsuccessful, you can take whatever options were available to you had you not gone to mediation. The mediation conference is considered a settlement negotiation and statements made during the conference cannot be used against you in any later proceedings.  Everyone is required to sign a Confidentiality Agreement at the beginning of the mediation conference.

Who Is Eligible for Mediation?

Anyone having a dispute involving residential fire or earthquake damage claims for which the Governor has declared a state of emergency. The amount claimed by the insured must exceed $7,500 and the amount in dispute must exceed $2,000. It does not apply to commercial or liability policies.

Residential Property & Earthquake Claims Issues Eligible for Mediation

  • Scope of loss;
  • Mandated building code upgrades;
  • Dwelling vs. other structures;
  • Preexisting damage vs. proximate cause;
  • Additional Living Expense where the policy limit has not been exhausted or expired;
  • Asbestos abatement;
  • Proof of loss and other personal property issues;
  • Disputes where both parties to the policy wish to discuss possible payments beyond policy limits. However, in these cases participation by the insurance company is voluntary (residential fire claims only);
  • Earthquake vs. aftershocks (earthquake claims only);
  • Hidden damages (earthquake claims only)

Residential Property Issues Not Eligible for Mediation

  • Coverage issues - the absence of residential property coverage and other underwriting issues, including, but not limited to, failure to insure, cancellation, nonrenewal, and rating issues;
  • Legal interpretations of policy provisions and terms;
  • The statute of limitations and contractual limitations on filing periods;
  • Allegations of bad faith and other demands for extra contractual payments;
  • Claims or disputes involved in a civil action.

Earthquake Claims Issues Not Eligible for Mediation

  • Coverage issues - the absence of earthquake coverage and other underwriting issues, including, but not limited to, underinsurance, failure to insure, cancellation, nonrenewal, and rating issues;
  • Legal interpretations of policy provisions and terms;
  • The statute of limitations and contractual limitations on filing periods;
  • Claims in excess of policy limits;
  • Allegations of bad faith and other demands for extra contractual payments, including underinsurance;
  • Claims or disputes involved in a civil action.

How Does the Mediation Process Work?

All mediations differ, depending on the parties involved and the issues in dispute, so your mediation may vary from the general description provided below.

The First Step – Notification

It is necessary to go through the normal complaint process with the CDI before a referral to the Mediation Program can be made.  You can contact the Consumer Hotline at 1-800-927-4357 for information on filing a Request for Assistance or initiate the complaint process online at

Once the complaint process has been completed, and if there is no satisfactory resolution of your claim, the CDI will notify the insurer that if the dispute is not resolved, the dispute will be referred to the Mediation Program, provided that it meets the eligibility criteria established by the Legislature in the California Insurance Code.  The law requires that the company then be allowed 28 calendar days to resolve the dispute, prior to the initiation of the mediation process.  Once this time has expired, and if the dispute is still unresolved, you will be offered mediation unless a question of eligibility for the Mediation Program is raised.  If a question of eligibility is raised, it will be reviewed by the CDI prior to continuing with the mediation process.

In disputes involving possible payments beyond policy limits, the law requires a willingness by both the insured and the insurance company to participate in the Mediation Program.  Therefore, if the insurance company informs the CDI that it declines to participate, the case will no longer be eligible for mediation.

The Second Step – The Request to Mediate

Since mediation is voluntary for the insured, you must indicate in writing that you wish to participate in the mediation program.  You will be sent a Mediation Election Form to formally request mediation.  There is no cost to you. Your insurance company will pay the costs of the mediation, unless you fail to appear for a scheduled mediation conference without good cause.

The Third Step – Selection of the Mediator

Upon receipt of your signed request for mediation, the CDI will appoint a qualified mediator to handle your dispute. Mediators are required to disclose conflicts of interest with respect to you or the other parties to the mediation.  It is essential that the parties have complete confidence that the mediator will be fair and impartial.  Each party to the mediation may object once to the mediator assigned by the CDI.  If either party objects, a new mediator will be assigned.  A Mediator Objection Form will be provided to you and your insurance company.

The Fourth Step – Pre-Mediation Telephone Conference

The mediator will conduct a pre-mediation telephone conference with you and the insurance company’s representative.  A mutually-agreeable date, time and location for the mediation conference will be determined.  Dates will also be set for the parties to provide a Mediation Conference Statement.  The mediator will then issue a Mediation Conference Notice to both parties, confirming the arrangements. An attorney cannot represent your insurance company unless you choose to have an attorney present at the mediation conference. It is not necessary for you to have an attorney. However, if you elect to be represented by an attorney at the conference, you must notify the mediator during the pre-mediation telephone conference.  The mediator will advise the company so it may have its attorney present, if it chooses to do so.

The Fifth Step - Preparing for the Conference

During the telephone conference, you will be asked to prepare a Mediation Conference Statement. Your statement must summarize the dispute and the reason for it, identify the costs or damages sustained, state what you consider to be a fair resolution of the claim, and identify prior demands and offers, if any.  A date will be set at the pre-mediation conference for you to send a copy of your statement to the insurance company and the mediator.  The company will also prepare a statement and send you a copy.  In addition, the mediator has the right to request that you or the company bring to the mediation additional documentation for review.  In preparing the statement, and for the mediation, you should:

  • Define and analyze the issues involved in the dispute;

  • Consider your entire situation (what you can realistically expect, time constraints, available resources, legal ramifications, business or trade practices, costs, etc.);

  • Identify your needs and interest in settling the dispute;

  • Prioritize the issues in light of your needs;

  • Summarize your claim and the reasons for it and determine what possible solutions might satisfy your interest;

  • Review the strengths and weaknesses of your case;

  • Gather and be ready with facts, documents, complete policy, letters, photographs, and itemized dollar estimates, bills, reports, other items, and sound reasoning to support your claims;

  • Anticipate the other party’s needs, demands, positions, version of facts, strengths, and weaknesses.

The Sixth Step – The Mediation Conference and the Settlement

You should come to the mediation conference prepared with all of the documentation you feel will be necessary to discuss your case and that may have been requested by the mediator. Most conferences will take several hours. The conference will continue as long as all parties agree that progress is being made toward resolving the dispute.

At the outset, the mediator describes the procedures and ground rules including covering each party’s opportunity to talk, order of presentation, decorum, discussion of unresolved issues, and signing of the Confidentiality Agreement.  The mediator tries to understand each party’s perceptions, interests, and positions.  The mediator then acts as a facilitator to keep discussions between the parties focused.  The mediator helps build a settlement range within which the parties can assess the consequences of continuing or resolving the dispute.  If an agreement is reached, the mediator may summarize the specifics of an agreement and make sure the terms are comprehensive, specific, and clear.

When the parties reach an agreement, they should put the terms in writing and execute releases.  If no resolution is reached, the mediator may explain the consequences of failure to reach an agreement.

Upon completion of the mediation process, a Mediation Program survey will be mailed to you.  The CDI requests that it be completed and returned at your earliest convenience to assist with the evaluation of the Mediation Program. 

If you have any questions, feel free to contact our Consumer Hotline at 1-800-927-4357 or visit our website at

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