More than 6,000 structures have been destroyed in Southern California this week after wildfires, fanned by brutal Santa Ana winds, ripped through multiple neighborhoods of greater Los Angeles. The affected home and business owners are preparing for a tough recovery ahead, one that is likely to span years given the amount of destruction.
While it's still too soon to know the full extent of the damage, it is likely to be one of the costliest natural disasters in U.S. history, according to analysts: AccuWeather estimates damages at a minimum of $52 billion, putting the week's fires in the top ten catastrophes by property losses in U.S. history.
Those filing an insurance claim in the coming days can expect a long process, insurance experts say. This is especially true given California's fraught insurance market. Many may find they are underinsured, if they are insured at all.
For those affected, here are some tips from insurance agents and other financial experts about the measures to take in the days ahead.
Prepare for the process
Home and business owners affected by the fires are undoubtedly feeling emotional as they start to rebuild. Loss of sleep and stress, which often come with navigating a disaster, also harm decision making. Sara Stanich, a New York-based financial planner, recommends taking time to process those emotions, especially before making any big financial or life decisions.
Then, prepare for the work ahead. Stanich points to a help page established by United Policyholders, a nonprofit insurance and consumer rights advocacy group, as a detailed resource that provides more explanation of the entire process and what to expect.
She notes that California has many state laws related to insurance claims that out-of-state insurance adjustors may not know about. It is good to familiarize yourself with them—United Policyholders details them—so you know what to ask for.
United Policyholders has also put together a page for pro-consumer California-based lawyers and others who can help you with your insurance-related claims.
The California Department of Insurance also has a list of tips for homeowners.
Contact mortgage and insurance agents
For those who have evacuated safely, Rajni Kapur, CEO of All Solutions Insurance, says to immediately contact your insurance and mortgage companies to alert them to your situation. They can also help you access the relevant documents you will need if you were unable to grab them before leaving your home.
File an insurance claim ASAP
"When filing your claim, time is of the essence," says Kapur. "File your insurance claim as soon as possible. This will help you receive expedited financial aid and resources where available."
For those having trouble reaching their insurer, one Malibu resident found contacting hers right when it opened for business allowed her to get through to an agent fairly quickly. Another used his insurer's app to file a claim, and heard from an agent the next morning.
This tip is true for business owners as well. Document the value of your damaged inventory and structures, and file a claim ASAP. You may be able to receive a payout for commercial property damage and loss of income, depending on your policy.
Ask for a cash advance
United Policyholders recommends asking for a cash advance to help you get situated when you file your claim. After an officially declared disaster, California insurers are required to give policyholders an advance of no less than 30% of your dwelling insurance limit, the nonprofit says.
Additionally, they must also give you at least four months of your available coverage for temporary rent and other expenses, as well as a list of items normally classified as reimbursable additional living expenses (ALE). Ask for it in writing.
"California has special rules related to insurance and deadlines that are designed to make it easier for you to collect all available funds after a total or partial wildfire loss," the nonprofit says.
Save all receipts
Most if not all of those displaced by the fires will need to buy things in the coming days and weeks like new clothing, housing, or, at the very least, food.
When you do, keep all of the receipts, and file them with your claim. "These receipts should help you get the full value of your replacement if you have the loss of use coverage included in your policy," says Kapur.
It can also be helpful to keep a recovery diary, says United Policyholders. "Any notebook will do. Take notes on who you talked to, the number you called, date and time, what was said."
Document what you can
If and when you are able to return to your home or business, document everything. Take pictures and videos of everything you can, and include those in your claim. And if you are able to, also include photos of your home and personal property before the fires. This can help move the claims process forward more quickly.
Additionally, document all conversations with your insurance company and adjusters. Try to get everything in writing when you can.
United Policyholders says you don't necessarily need to go into the process thinking that there will be issues. But you also don't want to be a pushover. It can help to think of your insurance claim as a business transaction. Your insurer will want to minimize what they pay out to you, while you want to maximize it. Get good at asking for exactly what you want and explaining why you want it and when.
Inform your landlord
If you rent, then inform your landlord as quickly as you can about the damage to the property—your landlord will file the claim for the building.
If you have renter's insurance, then document all of the damage to your personal property and submit it there. You can also check your policy for temporary housing coverage, says Kapur.
Register with FEMA
Even if you have insurance, you can apply for assistance through FEMA if you live in a declared federal disaster area. "Disaster assistance may be able to fill insurance gaps or provide help if you’ve been waiting more than 30 days on a homeowner's claim," says Stanich. This becomes all the more important if you don't have insurance.
Watch out for scammers
"I hate that I even have to say this but beware of scammy people," says Stanich. "Some people prey on victims of losses like this so just be wary of any adjustors trying to get you to sign anything urgently."
Stanich says you may soon be overwhelmed with solicitations, offers, and people looking to make a quick buck—some adjustors may even post up in the lobby of hotels where victims are known to be staying. But be sure to take some time to process and understand all of your options before signing anything.
At the same time, don't be the scammer yourself—don't pad or exaggerate your claims, which could lead to more problems down the line.
Get a second opinion
If your insurance adjuster makes you a settlement offer fairly quickly, you should get a second opinion before accepting. You can also hire a public adjuster to work on your behalf; this person can help you read through your policies and negotiate with the insurance company. They receive a percentage of the insurance payout—be sure to ask them what their fee is before you hire them.
Make digital copies of important paperwork
Many LA residents report needing to leave in a hurry, with very little time to grab important documents like insurance policies, the deeds to their homes, and so on. So it's a smart move to have digital copies of important paperwork, says Kapur.
For those not in immediate danger, Kapur suggests making it a point to get digital copies in order, and to get a fire-proof safe to protect the physical documents. Bonus: In a rush, you can grab the safe and have all of your paperwork in one place.
