As the California wildfires subside, and evacuated residents return to find their homes damaged by smoke and fire, the daunting task of making a claim with your insurance carrier begins. Insurance policy provisions, including limits to recovery, deductibles, additional living expense coverage, and duties to document your loss, vary from company to company. Obtain copies of your policies, document what agent and/or adjustor you speak with and the time, date and nature of your conversation. Below are some suggestions that may help your efforts.
Your homeowners insurance policy should cover damages to your structure, personal property and even the trees and shrubs in your yard. Depending on your coverage, damage to your vehicles will likely be covered under your auto insurance policy if you carry comprehensive coverage.
Beat the Rush – Report and Start a Claim ASAP
Given the catastrophic nature of the recent wildfires and the widespread damage, there are going to be hundreds, if not thousands of insurance claims made. The insurance companies tend to operate on a “first come-first serve” basis. They tend to adjust claims in the order that they receive them. Therefore, it is advantageous to make your fire damage claim as soon as possible. Don’t worry if you do not know the full extent of your losses when you report the claim. There are procedures in place that allow you to amend and supplement your claim. Insurance claims can be paid on a partial basis. The insurance company has a duty to pay all undisputed sums in a timely manner. That being said, extra care should be taken when accepting settlement sums, that the Release or check does not contain verbage such as “Payment in Full” or “In Full Settlement and Release Of Your Entire Claim” or words to that affect, if you feel that you may have additional claims and monies owed you. The acceptance of checks or signing of Releases bearing such language may foreclose your ability to further pursue a claim for damages.
Don’t Do It Over The Phone – Demand a Home Inspection
While you may first report the claim by phone, insist that the insurance company send an adjustor to thoroughly inspect your property and the damage it sustained. Let the adjustor see of him/herself the full extent of damages to the property. Let the adjustor get a true sense of the smoke damage. Check the air ducts, heating and air conditioning, garage, roof, exterior siding, walls, attic, etc. Show him all the personal property that has been damaged and destroyed.
Put It In Writing – Document Your Loss
Carefully inspect your home. Make a list of all property and personal property that have been damaged and destroyed. Take lots lot of photos and videos to help further document and substantiate your loss. Find photos that you took in the past that may have depicted in them those possessions that were destroyed in the fire. The California Department of Insurance provides a free home inventory guide from the department Web site www.insurance.ca.gov, or receive a hardcopy by calling the California Department of Insurance Consumer Hotline at 800-927-HELP (4357).
ACV/RCV – Actual Cash Value vs. Replacement Cost Value
Depending on your insurance policy, you may be entitled the full value of your destroyed personal property (RCV) or only the actual cash value (ACV), taking into account the depreciation in value of the possession. Review your policy carefully. “Leg work” on your part will likely be required to determine what the item is worth. The internet is a great tool to use.
Stop the Bleeding – Duty To Mitigate Your Damages
You are contractually required to take steps to mitigate your damages. This may mean boarding up broken windows, drying property and items that may have gotten wet, sealing leaks, covering openings in your roof with a tarp, securing possessions against possible theft or further damage, and returning to your home as soon as possible.
Don’t Forget Your ALE
Most homeowner insurance policies provide for “Additional Living Expenses” coverage which allows for reimbursement of expenses incurred for having to be out of your home during evacuation or during repair to your home while it is uninhabitable. Keep receipts of any hotel stays, meals, fuel or other related expenses while you are out of your home.
Living With The Bank
Given the significant value of homes in Los Angeles, Ventura and San Bernadino Counties, many homeowners carry mortgages. These mortgages are protected by the insurance policies and often the name of the banking institution of mortgagor will also appear as payees on checks issued by the insurance company for repair or rebuilding to the damaged home structure. Arrangements may need to be made to have these checks properly endorsed and deposited.
Watch Out For Shady Characters
Be sure to work only with reputable persons and companies. Insurance agents, adjustors, private adjustors and contractors all need to be licensed. Do not be shy about asking for their license numbers and then checking that they are in good standing. You can do so by calling the applicable agency or going online to the agency website.
Applicable contact information:
• California Department of Insurance Consumer Hotline at 800-927-HELP (4357) or www.insurance.ca.gov
• Federal Emergency Management Agency: 1-800-621-FEMA (3362) or www.fema.gov
• Contractors State License Board: 1-800-321-CSLB (2752) or www.cslb.ca.gov
• National Insurance Crime Bureau 1-888-815-9064 or www.nicb.org
When you purchase an insurance policy, you are entering into a contract between the insurance company and yourself. Both parties are required to follow the insurance policy terms, be truthful, cooperative and act in good faith. In fact, the insurance company cannot put its interests before that of its insureds (i.e you the policyholder) If you file a valid claim and the insurance company doesn’t cover what it obligated to cover, there may be not only a breach of contract, but a breach of fiduciary duty, and a breach of good faith and fair dealing. Despite their duties, insurance companies sometimes act in their own interests and try to get out of paying, pay less than they should or unnecessarily delay payment. These are acts of bad faith on the part of the insurance company.
As a former insurance company defense attorney servicing Southern California, Frederick S. Schwartz has valuable insight into the mindset and frame of reference of the insurance company’s adjusters and lawyers. This provides his clients a big advantage in the negotiation, litigation, and settlement process. If you are in Los Angeles County and need consultation, contact our local Encino law office and we will be able to help you with any consumer law related information or questions you may have.