With thousands of homes destroyed by wildfires across the Los Angeles County this week, homeowners, renters and business owners are likely scrambling to launch their property claims.
They’ll need several key documents to get that process started, according to Joel Laucher, a program specialist with United Policyholders, a San Francisco-based nonprofit insurance and consumer rights advocacy group.
We asked Laucher to walk us through the preliminary details. His answers have been edited for length and clarity.
Q: What is needed to file a claim?
A: Whether you were a homeowner, renter or a business owner, a key is to have a copy of your policy to review coverages available.
If you evacuated and don’t have policies with you, contact your agent or insurer to obtain a copy and advise them of your circumstances.
Q: What should homeowners, businesses and renters do if structures were destroyed or damaged?
A: Start saving receipts immediately. If a claim for a wildfire loss is filed, an additional claim for reimbursement from the policyholder’s insurance company can be filed for “additional living expenses.”
These additional expenses are for policyholders who suffered from the loss of their home or business because of a mandatory evacuation order or damage that makes the property uninhabitable.
If the home isn’t damaged and temporary living expenses are modest, the policyholder may be better off paying for these expenses out of pocket to avoid filing an insurance claim that goes on the holder’s record and can increase the cost of insurance in the future.
Q: How can we get money to help?
A: Policyholders should request a cash advance to help get situated.
Under California law, after an officially declared disaster — which is what has happened with the Palisades, Eaton and Hurst Fires in Los Angeles County this week — an insurer is required to provide an advance of no less than 30% of your “dwelling” insurance limit and at least four months of living expenses while working with you on calculating losses.
This law went into effect Jan. 2021, so if your insurance adjuster is from out of state, that person may not be aware of California law.
Q: What kind of documentation should I keep?
A: Keep notes in a diary with the names of people you speak with, including phone numbers, email addresses and dates.
United Policyholders recommends policyholders check the “Loss of Use” section of their policy. Look for the section with common wording that covers evacuation costs related to “prohibited use due to civil authority.”
Q: After an insurance adjuster reaches out and schedules an appointment to see the damage, should I settle immediately?
A: It’s important not to rush into settling a claim or entering into contracts with public adjusters or contractors before you have a chance to make measured decisions.
It is also essential to know that a rebuild process is a very lengthy one, so it is necessary to be economical in expending those insurance benefits.
Q: If my home or business is in an evacuation zone but not burned, what should I do now?
A: Document what’s in your home or business.
If the homeowner and business owner are in an evacuation zone, a list of what’s in your structure should be documented. Ideally, you should create such a list before evacuation. Take pictures or video of each room and the exterior of the house/buildings to document the property’s condition. If there is time, document open closets and drawers, too.
Homeowners and business owners should build as much of an inventory list as time permits including furnishings, artwork, jewelry, appliances, electronics, collections and special features of your home or business.
“Hopefully, you will not suffer a loss and need this inventory, but if you do, you’ll be glad you don’t have to start from scratch,” Laucher said. “After a traumatic loss, it’s impossible to remember everything you had, so most people never collect their full insurance benefits.”
Q: What should I take with me should I be directed to evacuate?
A: Pack important documents. When told you to have to evacuate your home, you may feel overwhelmed about what to take.
Along with sentimental items that are irreplaceable, important documents to take include insurance policies and related correspondence; passports and birth certificates; family photos; tax and loan documents; stocks and bonds; wills and trusts; and plans or blueprints of your home
About FEMA’s role
So, what happens in a declared state of emergency?
President Joe Biden approved a major disaster declaration on Jan. 8 to supplement recovery efforts and allow residents to draw down funding to address their disaster-related needs.
Disaster funding can pay for essential items like food, water, baby formula, breastfeeding supplies, medications, and other emergency supplies. It also can help with housing needs such as temporary hotel stays, rental assistance, basic home repairs, and personal property losses, according to the office of Kathryn Barger, chair supervisor of the Los Angeles County Board of Supervisors.
If a resident has insurance and is applying for FEMA disaster assistance, they must file a claim with their insurance company first. By law, FEMA cannot duplicate benefits for losses covered by insurance, according to Barger.
If insurance doesn’t cover all of their damage, applicants may be eligible for federal assistance.
To apply for FEMA assistance, go online to DisasterAssistance.gov, call 800-621-3362, or use a mobile device at FEMA App.
When your home is destroyed
Your mortgage company cannot require owners pay off their loan with insurance proceeds.
For further direction on how to handle an unpaid mortgage, go to Fannie Mae’s KnowYourOptions.com consumer website for housing resources, including details on disaster relief, or call 877-833-1746 to access the Disaster Response Network.