Navigating Wildfire Loss: A Homeowner's Guide to Insurance Claims
Experiencing a wildfire loss is devastating.
Knowing how to navigate the insurance claim process can make a significant difference in your recovery. This guide provides essential steps and resources to help homeowners understand their rights and maximize their insurance benefits.
Key Steps After a Wildfire Loss:
File a Claim Immediately: Contact your agent or insurance company as soon as you confirm your home has been damaged or destroyed to open a claim.
Obtain Your Policy: Request a complete, current, certified copy of your policy, including declaration pages and all endorsements.
Understand Your Coverage: Review your policy carefully and consult with a reputable insurance professional to understand your benefits.
Dwelling/Other Structure Coverage:
Partial Loss: If your house has partial fire damage or damage from fire debris (soot, char, ash), consult this resource: Insurance Claim Tips for Partial Loss Fires.
Total Loss: You can choose to rebuild on-site or purchase a new home.
Rebuilding On-Site:
Replacement Benefits: The amount available is based on the cost to rebuild your home to its original condition, up to the policy limit.
Contractor Estimates: If you disagree with your insurer's estimate, hire a licensed contractor to create a detailed estimate, including permits, architecture, and engineering costs.
Provide Estimates to Insurer: Remind your insurer that these are estimates and that actual costs may increase due to high demand for labor and materials.
Repair Timeframe: You have up to 36 months from the first repair payment to make repairs, with possible extensions for good cause.
Combining Coverages: You can combine dwelling, other structures, and code upgrade coverages if needed.
Purchasing a New Home:
Replacement Benefits: The amount available is equal to the cost to rebuild your house on-site with like kind and quality construction.
Funds Available:
Dwelling coverage limit (Coverage A)
Other structure limit (Coverage B)
Extended replacement benefits
Code upgrade benefits
Home Value:
If the new home costs less than the "replacement benefits," your total benefits are the cost of the new home.
If the new home costs more than the "replacement benefits," your carrier owes you the full replacement benefits up to your policy limits.
Valuing the New House: Your carrier cannot deduct the value of the land from the total price paid. The insurer will evaluate the replacement home price 'like for like,' meaning same # of bedrooms, bathrooms, approximate square footage
Photos/Plans/Permits:
Collect photos of your home, other structures, and property. Gather any plans, permits, or documents related to remodeling or repairs.
Personal Property:
Initial Payment: Carriers must pay 30% of the personal property limit (up to $250,000) without an inventory. Request this payment now.
Higher Percentage: Some carriers may pay a higher percentage without an inventory. Ask your carrier. Use this guide: Contents Itemization Requirement.
Detailed Inventory: Generally, recovering benefits above the initial payment requires a detailed personal property inventory.
Inventory Form: If required, your carrier cannot force you to use its form. Here is a sample: Household Inventory Sample Spreadsheet.
Grouping Items: Carriers must allow you to group categories of items (clothing, shoes, books, etc.).
Loss of Use/Additional Living Expenses (ALE):
Policy Review: Policy provisions vary greatly. Review your coverage and discuss with an insurance professional.
Fair Rental Value vs. ALE: Some policies provide fair rental value; others provide "additional living expenses" or ALE.
Policy Limit: If your policy has a $ limit, that is the total amount the carrier will ever owe you for additional living expenses.
Reconstruction Time: Reconstruction often takes longer than anticipated.
Save Receipts: Save receipts of all expenses.
Sample Letter: Use this sample letter to ask about additional living expense benefits: Sample Letter Requesting Information About Insurance Benefits for Temporary Living Expenses.
Extended Time: In a declared emergency, the period to collect additional living expenses is increased to 24 months, with a possible additional 12 months due to delays.
California FAIR Plan:
Follow all guidance above.
FAIR Plan pays for fair rental value, not additional living expenses.
If your house was furnished, you should receive rental value for a furnished house.
FAIR Plan pays an additional 10% on top of any fair rental value benefits listed on the declarations page.
Smoke Damage is Different - FAIR Plan has failed to investigate and pay thousands of smoke damage claims since 2012. Kerley Schaffer has been a leader in investigating and litigating these issues for a decade. Contact us if you have a smoke damage claim and are getting the (Un)FAIR Plan run around.
Other Resources:
Conclusion:
Navigating the insurance claim process after a wildfire can be overwhelming. By understanding your policy, documenting your losses, and seeking professional guidance, you can maximize your benefits and rebuild your life.
For a comprehensive checklist and detailed guidance on navigating your wildfire insurance claim, download our complete guide as a PDF.
Wildfire, insurance claim, homeowner, loss, dwelling coverage, personal property, loss of use, additional living expenses, FAIR Plan, United Policyholders, recovery, California.