Insurance Claims Guide

It is estimated that upwards of 10,000 structures have been destroyed or severely damaged by the wildfires in the Los Angeles area.¹ For clients preparing to go through the process of of recouping losses and filing insurance claims, we have compiled the following resources below.

Once in a safe place, we strongly recommend reporting damages as soon as possible. Resolving wildfire property claims is a lengthy process and likely to be exacerbated by a high volume of claims and the scaling back or cancellation of coverage in many fire-prone areas in recent years.

In general, your insurance broker or an insurance company representative will be able to offer guidance in the process of filling out a claim, or “proof of loss” form. Once this is filed, an insurance adjuster will evaluate the claim and assess damages to the property to determine the scope of the loss and the insurance company’s liability.

Please note that while settling property claims often entails a series of important decisions, few, if any, need to be made today. The California Department of Insurance (CA DOI) advises displaced residents to avoid accepting final “on-the-spot” settlements or signing documents during times of duress.

Checks and payments from insurers may still be accepted prior to accepting a final settlement, so long as they are not “final payments.” For those whose homes have been completely destroyed and are in need of immediate relief, the CA DOI has advised that, due to the disaster declaration, insurance companies are required to immediately pay one-third of the estimated value of personal belongings (contents) within in the home, and a minimum of four months’ rent for the local area in which displaced individuals reside regardless of if an adjustor has yet inspected the property.

Detailed Guidance on Residential Property Claims:

• Report the Damage Immediately: Once you are in a safe place, contact your insurance agent or company representative as soon as possible to report the damage and initiate the claim process. Prompt reporting can expedite the handling of your claim.
  • Important questions to ask your broker may include: What type of damages are covered under my policy? How long will it take to process my claim? Will I need to obtain estimates for repairs to the structure? What is my deductible?
  • If you do not have it available to you already, request a complete copy of your residential homeowner’s policy, including your declarations page as it is important to understand your coverage and set expectations around your claim.
• Document the Damage: take clear photos and videos of damaged property and make detailed lists of any damaged or lost items.
• Make Temporary Repairs: If it’s safe to do so, perform necessary temporary repairs to prevent further damage. Many insurance policies may not cover damage to your property if you have not taken reasonable steps to secure it from subsequent damage. Make sure to keep all receipts for these repairs, as they are often reimbursable.
• Maintain Communication with Your Adjuster: Your insurance company will assign an adjuster to assess the damage. Providing thorough and detailed information can help  expedite the settlement process. Be aware of out-of-state adjusters who may not know California’s consumer protection laws.
• Maintain Records: throughout the process, make sure that you keep detailed and organized records of all interactions and expenses related to the loss.
  • Document all interactions with your insurance company, including dates, times, and summaries of conversations, which can be invaluable if disputes arise.
  • Keep records of any expenses related to temporary repairs, as well as receipts and details of any additional living expenses that you may incur as a result of displacement, such as temporary housing costs and transportation food cost temporary housing costs
• Consider Contractor Estimates: While your insurer may recommend contractors, you have the right to obtain independent estimates to ensure fair repair costs. Comparing estimates can help you make informed decisions.

Additional Guidance on Losses Related to Income-Generating Properties:

• Know your coverage: Confirm the coverage offered under your policy with your insurance broker; many plans include business interruption coverage designed to compensate for lost income and cover ongoing costs.
• Collect business records: Gather and provide documents that prove the value of damaged inventory, equipment or structures.
• Document ongoing expenses: Make a list of business expenses you’ll continue to incur, such as payroll

California FAIR Plans:

The CA FAIR Plan was established to provide coverage for homeowners who are unable to find comparable fire coverage in the traditional marketplace. It is a syndicated insurance pool established in 1968 which often has functioned as the ‘insurer of last resort’ in areas especially prone to wildfire risk.

• To file a claim: your first step is to visit https://www.cfpnet.com/claims/. It is advised to have your policy number and ZIP code available to start the process. Once filed, the FAIR plan will reach out to you via mail or email with further information and next steps.

Additional Steps for Filing Claims in Disaster Zones:

Please note that while FEMA assistance is designed to cover basic needs and may only apply after insurance has been exhausted or if you are uninsured, there are several things to be aware of when filing loss claims related to a federally declared disaster.

• Apply for Federal Assistance: you may qualify for disaster relief from the Federal Emergency Management Agency (FEMA). This can include grants for temporary housing, home repairs, or other disaster-related needs.
• Understand Disaster-Related Coverage Extensions: homeowners insurance policies often have provisions for disaster-related claims, including coverage for debris removal and additional living expenses. However, policies typically exclude coverage for flood damage unless you have a separate flood insurance policy.
• Inspect for Special Deductibles: Many policies include separate deductibles for disasters such as earthquakes or hurricanes. Ensure you understand these deductibles, as they are often higher than standard ones.
• Be Aware of Federal Deadlines: Filing deadlines for federal disaster relief are typically set by FEMA and are separate from insurance deadlines. Pay attention to these timeframes to maximize available resources.

Additional Helpful Resources

• FEMA Disaster Assistance Website: disasterassistance.gov
  Allows you to check for federal disaster declarations and apply for aid.
• California Department of Insurance: insurance.ca.gov
  Offers guidance and resources specific to California residents in disaster zones and offers consumer advocates if any issues arise during your settlement process.
• California Department of Insurance’s Top 10 Tips for Wildfire Claimants