As smoke began to clear in parts of Southern California on Friday, the death toll from several large wildfires became more visible. As much as 10,000 homes and other structures have burned since Tuesday, leaving behind massive destruction spanning entire neighborhoods in the Los Angeles area.
If your home has been destroyed or damaged by a wildfire, here's what you need to know about the insurance claims process, your rights as a homeowner, and how to prepare for what comes next.
What should I do if my home is destroyed or damaged?
Once you and your family are safe and the damage to your home can be assessed, you will need to call your insurance company to begin the claims process. Since that process can take months, it's important to contact the company as soon as possible.
If your home is completely destroyed and a state of emergency is declared, your insurance company is required by law issue a minimum payment up front, even if the adjuster hasn't seen your property. This includes a third of the replacement value of your personal belongings and a minimum of four months' rent for the local area.
Carefully review your homeowners or renters insurance policy, including your limits. Start documenting and creating a paper trail to support your claims process. If you have photos of your property and vehicles before the fire, you can use them to help fill out yours home inventory if you have not already submitted one.
Once you've verified your home is habitable, documented the damage, and begun the insurance claims process, contact your mortgage lender or landlord for next steps.
Overwhelmed? California residents can find resources and a helpline Apply for bushfire insurance here.
Do insurance policies cover bushfire damage?
Depending on your policy, where you live and the coverage you pay for, your homeowners (or renters) insurance may or may not cover damage to your home or belongings caused by a wildfire.
Typically, fire is a “covered peril” in most home owners insurance policies unless your policy specifically details a bushfire exclusion or you are excluded from or were not covered.
In some wildfire-prone areas, home insurance policies come at a higher cost or require a separate deductible for wildfire damage. If you live in a home that is considered high risk where you cannot get traditional home insurance, the FAIR (Fair Access to Insurance Requirements) plan can provide basic fire insurance.
How do I file a bushfire claim?
It's natural to feel overwhelmed when a natural disaster disrupts your life. Here's what homeowners can do in the aftermath of a partial or total loss due to a wildfire.
Step 1: Call your home insurance company
Once you reach security, start the claims process to get an initial payment to cover your living expenses for a few months. When planning for the long term, be sure to consider your deductible.
Step 2: Inventory the damage
If you can, take pictures and detail the damage to your home, vehicles and personal belongings. If you have not yet finished a home inventory for insurance purposes, work with a trusted friend or family member to itemize and list appliances, furniture, electronics, decor, and other equipment along with brand name and estimated purchase price.
Step 3: Review your policy carefully
Review your home or renters insurance policy, its coverage limits, and what benefits you're entitled to for reimbursement of personal items and living expenses. Insurance companies are required to provide this information to you upon request.
A typical homeowners insurance policy includes coverage for rebuilding or replacing the structure of your home and detached structures like garages, as well as coverage up to a certain limit for personal items in the home. Most policies also offer liability protection and supplemental living expense (ALE) coverage.
Step 4: Store your receipts
Pay close attention to your ALE limits to cover hotel bills or rent, restaurant meals, and other expenses you may incur while your home is being repaired or renovated. If your home is destroyed and needs to be rebuilt, you may be looking at a minimum of a year or more of additional living expenses.
Step 5: Watch out for fraud
During a major disaster, it can be easy to get caught up in rumors or second thoughts frauds. Your neighbor's insurance policy or company may be different, so work only with your own insurance company, he says Janet Ruiza California-based representative for the nonprofit Insurance Information Institute. Fraud is common. “Unlicensed contractors, unlicensed public adjusters often prey on those who have suffered a loss,” Ruiz said.
Step 6: Document everything
Start a claims folder where you can keep notes, recordings and details of every interaction you have with your insurance company, mortgage company and others. The claims process can be lengthy, and you may need to secure multiple quotes and work directly with contractors.
Step 7: Don't accept an unfair offer
Working with your claims adjuster is a negotiation process. If the first settlement offer doesn't fully cover the cost of repairs or rebuilding, you can issue a demand letter asking for additional payments that are more in line with your coverage limits and the value of your home.
“Often homeowners are defensive or don't ask enough questions of the claims adjuster. “If you're not getting answers, ask for a supervisor,” Ruiz said.
Step 8: Get professional help if needed
If you're not sure if your home insurance company is treating you fairly, many states provide resources to assist in the claims process. You can also seek mediation or involve a lawyer as a last resort to resolve a disputed claim.
What if my insurer dropped my cover before the bushfire?
Most states require insurers to notify homeowners of a policy cancellation several months before the end date. Ruiz said that if you are denied coverage, it is important to find a policy with another insurance company and that California FAIR Plan takes all insurance homes.
California Insurance Commissioner Ricardo Lara issued a mandatory one-year moratorium for non-renewal and cancellation of insurance. Those in certain zip codes affected by the Southern California wildfires cannot cancel their homeowner's policies for a year, regardless of whether they suffered a loss.
If the fire was part of a federally declared disaster, the Federal Emergency Management Agency (FEMA) will provide some support to insured and uninsured homeowners. California homeowners and others affected by the Los Angeles wildfires can apply for FEMA assistance here.
Do I have to pay my mortgage after the wildfires?
Even if your home is a total loss or deemed uninhabitable, you're still on the hook for the rest of your mortgage. Contact your lender right away to see if you qualify for a filing or deferment while your claim is processed.
Some lenders may be willing to delay payments for three months to a year pending insurance payout. This is crucial to protecting your credit score, as late or missing mortgage payments would otherwise be reported as delinquent and affect your credit score.
How can I protect my home from future wildfires?
As wildfires become more prevalent in every part of the country, many people are taking steps to combat it protection of their homes. Some countries, such as Californiahave federal, state, and local programs to assist homeowners in mitigating fire risk by retrofitting and fortifying their property for wildfire defenses.
Home insurance companies may also offer incentives for taking certain measures, such as installing sprinklers, creating a defensive perimeter on your property, and upgrading your home with fire-resistant materials.