Common Pitfalls of Wildfire Claims
What to do in a wildfire? California knows the drill. But rebuilding and financially recovering after fire damage? That’s where things get tricky. The insurance claims process for property damage is notoriously stressful and can take months to reach a settlement.
Watch out for these common issues if you are dealing with a wildfire claim.
Securing Coverage for Evacuation Expenses
Did you know that unless there is a government-mandated evacuation or state of emergency declared for wildfire, California homeowners may have to bear the brunt of financial burdens that stem from property damage?
However, if you evacuate because there is a state of emergency or because your property has sustained damage from the wildfire, you may be entitled to ALE (additional living expenses) coverage from your insurance company to cover the cost of evacuation. ALE extends to many expenses while displaced from your home, including hotel and other lodging arrangements, food, transportation, storage fees, and more.
According to the California Department of Insurance, after a state of emergency a policyholder is entitled to ALE coverage for a minimum of 24 months (2 years), with an extension of 12 months (1 year) if there is a delay in the reconstruction process that are beyond their control. Additional six-month extensions must be provided for good cause. Homeowners should be aware, though, that some policies may have a total dollar limit that could be maxed out before reaching the time limit.
Fire Damage & Water Damage Combo
Just when you think the damage is done after a wildfire, the hits keep coming. Extreme water damage from fire extinguishing efforts soaks everything in sight, whether it was burning or not. Remaining walls, floors, furniture, and belongings become waterlogged, and with residual moisture from high humidity, mold can quickly form afterward. This water damage can cause structural instability and electrical hazards, as well as health risks from mold.
Low Initial Offer
Regardless of what your insurance company promises you, it will always place its bottom line as a priority before your financial well-being. Unfortunately for you, this means you could be on the receiving end of unfair business practices when you file your wildfire insurance claim.
A low initial offer will be the first tactic, which plays on the expectation that you will be eager to settle without negotiations, and that your lack of understanding of your policy coverage and how the claims process works will discourage any pushback.
Personal Contents Investigation
Contents claims are a huge part of wildfire claims. Policyholders can submit a contents claim for personal property damaged in a wildfire ranging from furniture, appliances, clothes, and collectibles, but you will need to be specific and thoroughly document the loss. For example, if you had luxury bags or an extensive art collection that were lost in the fire, the carrier is going to want receipts or photos to prove that you owned those items, estimate their value, and confirm that they were damaged in the wildfire event.
Hidden Damage
Even if your home appears unscathed after a wildfire, be on the lookout for signs of hidden damage. For example, soot may remain on personal items and contaminate air quality. You should also thoroughly inspect your electrical systems, as the fire could have shorted out junction boxes, melted wires, and created dangerous live wires that could spark new fires. If your home runs on gas, be sure to turn off all valves and consult with an expert before turning it on again.
