As a real estate and property management company, we’ve dealt with countless restoration, fire, mold, and relocation projects. On a personal note, I experienced the devastation of losing my home to fire at the age of 11. The journey of recovery is long and arduous, often taking years to regain stability. If you’re facing the aftermath of a wildfire, this guide aims to simplify the complex insurance claims process, helping you navigate the challenges with confidence and ensuring you’re better prepared to work with insurance companies.
Understanding the Homeowners Insurance Claims Process
The Initial Assessment
- The Adjusters: Adjusters will be assigned to your case. Keep in mind that you will most likely be talking to many different people throughout the process. Be sure to write down their names and what was discussed.
- Document Everything: Take photos and videos of all damaged areas and belongings inside your home. A thorough inventory is essential. Look at old photos or videos taken at your house to ensure accuracy and avoid omissions.
- Avoid Rushing: Do not feel pressured to submit claims prematurely or pay anything upfront. Insurance companies, facing enormous financial losses, may exploit incomplete documentation to minimize payouts.
The Three Key Coverage Areas in Your Policy
Dwelling Coverage: Rebuilding Your Home
Replacement Value vs. Cash Value: Ensure your policy covers replacement costs, accounting for current construction standards and inflation. If your policy hasn’t been updated in years, it may not reflect today’s costs.
Ordinance and Upgrade Coverage: This covers necessary upgrades to meet current building codes. If costs exceed your policy limits, negotiate with your insurer for additional funds.
Upgrades Beyond Coverage: Note that choosing to rebuild a more luxurious or upgraded home might result in coverage limitations.
Personal Property Coverage: Protecting Your Belongings
Document Your Possessions: Review existing photos or videos and create a detailed inventory of all damaged items. A spreadsheet with estimated values can strengthen your claim.
Maximizing Recovery: High coverage limits don’t guarantee full reimbursement. Thorough documentation and evidence such as receipts are key to claiming the maximum allowable amount.
Additional Living Expenses (ALE): Covering Temporary Housing and More
Understanding Coverage Limits: ALE reimburses costs like hotel stays, meals, and other living expenses during displacement. Policies may lack clarity, creating room for negotiation. Be aware of insurer-imposed limits on hotel choices or expense reimbursements. Push back with detailed documentation to protect your rights.
Examples of Claims: If your hotel lacks a kitchen, you can claim dining expenses. Document all related costs, including receipts for temporary housing, food, and transportation.
Professional Advice and Negotiating with Your Insurance Company
Negotiating with your insurance company can be a daunting task, as insurers often aim to minimize payouts. One common tactic is “abatement,” where payouts already provided are reduced, requiring careful monitoring on your part. To counter these challenges, it is crucial to maintain comprehensive records. Save every receipt, photograph, email, and note from phone calls. These records serve as vital evidence to support your claims and counter disputes effectively.
Knowing the details of your policy is the first step in effective negotiation. Familiarize yourself with every clause and coverage limit to strengthen your position. In particularly complex situations, hiring a public adjuster can be highly beneficial. Although they charge a percentage of your payout, their expertise often leads to better outcomes.
What If My Property Is Not Fully Burned or in an Affected Area?
You may feel the urge to move back right away, but you should not, as there may still be toxic waste or ashes in the area. If this is the case, you will still need to contact your insurance company for the restoration process. This is where a restoration company can help you clean up toxic waste and help dealing with the insurance. The process usually takes 2-6 weeks.
What If My Property Is a Rental?
If this is a rental property, you may want to terminate the lease agreement or have the tenant claim relocation expenses through their renter’s insurance due to toxic conditions inside the property for the tenant’s safety. Do not pay for the restoration process upfront to have them move back quickly, as the insurance company may try to avoid reimbursement once they know it’s already been paid.
Reporting Insurance Company Misconduct
If you experience harassment, unfair treatment, or delays in processing your claim, it is important to report your insurer to the California Department of Insurance. Holding insurers accountable not only protects your rights but also helps others in similar situations. Document every interaction and be prepared to present your case if needed.
Conclusion: Key Takeaways and Next Steps
Recovering from wildfire damage is overwhelming, but understanding the claims process and your rights can ease the burden. Take the time to document everything meticulously and avoid rushing your claim. Consulting professionals to navigate complex negotiations can provide significant advantages. By knowing your policy details and advocating for yourself, you can maximize your coverage and protect your interests. Also, be sure to constantly look for updates, as both the federal and state governments may provide additional relief through various agencies such as FEMA.
If you’re dealing with insurance claims or need assistance, our team at Earnest Homes is here to guide you. With years of experience and a personal understanding of the challenges, we’re committed to supporting our Los Angeles community during these difficult times.
