The devastating fires in California are the latest in a series of catastrophes that have destroyed homes and businesses. After you’ve suffered a loss, one of your first steps on the road to financial recovery is filing an insurance claim (assuming you have insurance coverage). It’s important to know your rights when filing a claim and that you need to start the process on filing a claim either through your homeowners insurance agent or insurance company. Filing a claim is just the start and there are many issues to be aware of. Here are some claim tips from my new book Insurance Made Easy:
- Review your policy: Be sure to understand what is covered and what is not covered. For example, if you have a homeowner’s policy that pays additional living expenses (ALE), go ahead and ask your insurance company for payment.
- Prepare documentation of your loss: Document everything that occurs during a loss: take photos, write down the narrative; collect receipts, contracts, and appraisals; and document phone calls (including the name of anyone you speak with). Document the details of all damaged items, including their date of purchase and approximate value (receipts are great if you have them). Most insurance companies will require a written inventory.
- Do not discard damaged items or materials without checking with your insurance company. The adjuster will need to see your damaged items to make a proper evaluation. If you are required by a governmental body to discard an item for safety reasons, be sure to take photos and save the details of who required the item to be discarded.
- Document the claim process: No detail is too small. Thorough record-keeping is important if you want to receive the maximum value on a claim. Note the name, title, and contact information of everyone you speak with about your claim, along with the date, time, and issues discussed.
- Secure your property to mitigate damage: The insurance company will require you to take reasonable care of your property and to do what you can to prevent further damage. Insurance companies refer to this as mitigating damage. If you can’t stay in your home, turn o your power, gas, and water to prevent further damage. Other examples would be covering holes in the walls and roof to protect from the elements or moving property that is at risk of further damage.
- Arrange for housing: If your homeowner’s or renter’s policy includes loss of use coverage, your insurance company is required to o er you rent or hotel costs, regardless of where you stay, even if it’s a family member’s home.
- Hire a public adjuster: A public adjuster will act as your advocate. ey are familiar with insurance policies and will work to support your interests and will help you negotiate better settlements with your insurance company. Make sure that your public adjuster has a current license with your state insurance department. Be aware that a public adjuster typically receives an average of 15 percent of your settlement.
- Wait for approval from the insurance company before doing anything. You should always wait for the insurance company’s claims adjuster before having any work done; otherwise, you may be responsible for those costs.
- Continue to pay your insurance premiums. Keep paying your insurance premiums, unless you have a type of coverage that allows you to stop paying premiums, such as disability insurance.
- Close the claim only when you’re ready. With a homeowner’s claim, there might be additional occurrences down the road, so do not close your claim until you are sure. As with other types of insurance, you should generally not file a small claim, but in the event of a significant loss, you’ll be glad you did.
The wildfires in California have led to over 7,000 structures damages or destroyed and will lead to a starting point of $1.045 billion in losses, commercial and residential structures, personal and commercial vehicles, and agricultural equipment. This does take into account the painful human toll of the deaths of at least 42 people and those injured. All told, Losses from California Wildfires Could Reach up to $6 Billion, Experts Say. See: First available preliminary data release on deadly wildfires.
Financial relief is on it’s way from Washington as the House Passes $36.5B Hurricane, Wildfire Relief Aid. The bill combines $18.7 billion for the Federal Emergency Management Agency with $16 billion to permit the financially troubled federal flood insurance program pay an influx of Harvey-related claims. Another $577 million would pay for western firefighting efforts. Up to $5 billion of the FEMA money could be used to help local governments – especially Puerto Rico’s central government and the island’s local governments – remain functional as they endure unsustainable cash shortfalls in the aftermath of Maria, which has choked off revenues and strained resources.
A special note on wineries, as they may face gaps in coverage and coverage limits. The coverage claims process can be complex as crops are covered while vines may not be. Unfortunately, All Wildfire Damage to California Wineries May Not be Covered by Insurance.