Our thoughts and prayers are with those who have suffered losses due to the recent Los Angeles wildfires. Below we offer some guidance to those affected by these devastating fires to pursue and preserve their rights to insurance recovery for their losses.
- Locate or obtain a complete copy of your residential
homeowner's insurance policy or commercial property policy (in
the case of an affected business) that may provide coverage. The
law requires your insurer to provide you with the policy free of
charge within 30 days of your request. Ask your agent or broker to
confirm how much coverage you have (1) to rebuild or repair your
home, (2) for your contents or personal property, and (3) for
additional living expenses (ALE), such as alternative
housing.
- Contact your applicable insurer and immediately report your
loss to start the claims process. If you suffered a significant
fire loss, you should report a claim to your insurer immediately
rather than worry about increased premiums or a policy cancelation.
On January 7, 2025, Governor Newsom proclaimed a state of emergency
covering Los Angeles and Ventura counties due to the Palisades,
Eaton, and other fires. Due to the Governor's January 7
declarations, no admitted or nonadmitted insurer can issue a notice
of cancellation or non-renewal due to wildfire risk for one year,
starting on January 7, 2025, for any policy of residential property
insurance in the ZIP Codes affected by the fires. The California
Department of Insurance (DOI) has a useful search engine to determine the zip
codes covered by the moratorium.
- If you have a California Fair Plan (CFP) policy, you can report
the claim on the CFP website. For other policies, you should
review your policy and the declarations pages for the policy for
information on how to report your claim or have your agent or
broker report the claim for you. The DOI also has a list of contact
numbers for residential insurers here. Make sure that you receive a written
acknowledgment from your insurer of the claim reporting, a claim
number to be used on communications, and the contact information
for the adjuster assigned to your claim.
- Do your best to protect your property. Your insurer must
reimburse you for all reasonable costs to protect your property as
long as you keep receipts for the expenses and materials purchased
to cover or protect your property. Payments for temporary repairs
should also be covered by your policy. Do not make any extensive
permanent repairs until after an adjuster is assigned to your claim
and has had the opportunity to assess the damage. You need to
obtain approval from the insurer to proceed with cleanup and debris
removal and any extensive or permanent repairs. Your policy likely
contains a "no voluntary payments" clause which generally
prohibits the insured, except in emergency circumstances, from
making payments without the insurer's approval.
- Once an adjuster is assigned to your claim, you should request
that they start paying for any ALE that are incurred and review any
requirements with the adjuster for submitting and obtaining
reimbursement for such expenses. Your time to collect ALE after a
declared catastrophe is not less than 24 months even if your policy
provides otherwise; however, your total expenses are subject to the
policy limit applicable to ALE.
- Document and maintain all your communications with your
insurer/adjuster about your claim.
- Take pictures and videos documenting your losses. Before and
after pictures and videos are important to support your claim.
Prepare an inventory of damaged or lost property, including
contents lost or destroyed in the fire to support your claim. The
DOI has an excellent home inventory guide that can be used as a
template to create an inventory of your contents and values to
submit in support of your claim.
- The first payment you receive from an insurer is often an
advance payment and not a final payment. You can also request an
advance payment to cover the start of repairs. You may also receive
on-going payments for ALE. You should be sure to understand what
the payment does and does not cover and be wary of initial
settlement offers that are represented as full settlements and
require a release of liability.
- Evaluate whether you will need a public adjuster or an attorney to assist with handling your claim. You do not need to make a decision before you report the claim to your insurer to initiate the claims process. You can also try to settle your claim directly with your insurer before hiring a public adjuster or an attorney. Public adjusters typically charge a percentage of the claim settlement for their services. Make sure you understand fully what they are charging and the services you will obtain before signing a public adjuster contract. A public adjuster should not charge a fee on payments you received from your insurer before the contract with the adjuster is signed. Depending on the percentage of the recovery charged by a public adjuster and the amount of your insurance claim, it may make more sense in terms of the likely net recovery to hire a qualified coverage attorney on an hourly fee basis than a public adjuster on a percentage basis.
Fire loss claims can involve complex issues. Understanding your policy benefits and the proper presentation of your claim is important to maximizing insurance recoveries for wildfire claimants.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.