Insurance Tips For Wildfire Victims

California insurance commissioner Dave Jones says thousands of residents forced to evacuate may have homeowner or renter insurance coverage to help with evacuation and relocation costs, even if their homes are not damaged or destroyed, and in many cases no deductible is required.

Many homeowner and renter polices cover additional living expenses during natural disasters, which allows homeowners to maintain their standard of living by covering increased living expenses incurred as a result of damage caused by fire or mandatory evacuation. The coverage typically includes extra food and housing costs, furniture rental, relocation and storage, telephone installation and extra transportation expenses.

Top Ten Tips for Wildfire Claimants

• Obtain a complete copy of your residential insurance policy, including your declarations page. The law requires your insurance company to provide this to you free of charge within 30 days of your request.  Ask your agent or insurer representative to explain your relevant coverages.
• Take note of your Additional Living Expense (ALE) limits and manage your ALE expenses in recognition of a long rebuilding process. Your time to collect ALE after a declared catastrophe is extended to 24 months; however your amount of coverage is not increased. 
• Track all of your additional expenses that arise from having to live in another location away from your home.
• Document all of your conversations with your insurer/adjuster about your claim and policy limitations. Ask the adjuster to point out the specific provision in the policy being cited. 
• Get at least one licensed contractor's estimate or bid on the cost to rebuild your home just to get a reasonable sense of the actual cost as compared to your coverage limits (for more considerations on contractors, view the CDI's electronic brochure Don't Get Burned After a Disaster and check the website for California's Contractors State License Board. 
• Call the Department of Insurance Hotline for help at (800) 927-4357. Consider insights from consumer advocates. 
• Understand you can purchase at another location, and still receive full replacement cost benefits.  You also have the right to rebuild using your own contractor. In order to reduce the cost of rebuilding, you might also consider a community wide development.
• Assess your situation, do not rush into any decision about contractors, lawyers or public adjustors - consider your mortgage/employment/financial situation, your age, children's schools, your willingness to deal with construction issues (no matter who your contractor is).  Of course, move forward if you have obtained multiple bids from reputable licensed contractors, are certain you want to rebuild, are sure of the rebuilding costs and your insurance limits and want to be sure you are a priority for your selected contractor to start the rebuild. The Contractors State License Board (CSLB) has publications that can help you identify and avoid problems before they occur. Contact CSLB at 1-800-321-2752 to obtain a free copy of their publications and/or verify the licensing status of a contractor.
• Do not assume you have inadequate coverage based on general information you are hearing about building costs or other general comments. The adequacy of your limits needs to be addressed on a case specific basis to determine how much it will cost to rebuild your home and whether your limits, including extended replacement cost coverage if applicable, are adequate.
• Evaluate whether you will need a public adjustor or attorney to help you with your claim. Note that for long rebuilding processes you are likely to use your entire ALE limits and if you are also reimbursed by your insurer for your entire personal property loss or your full personal property limits, then there may be no need for the assistance of a public adjustor or lawyer to help you obtain full settlements for either of these coverages. Public adjusters require a percentage of the claim settlement for their services. Make sure you understand what they charge and the services you are paying for before you sign a contract.  Also, a public adjuster cannot charge a fee for payments already received from the insurance company, so you should consider getting as much advance payment as possible from the insurance company (without signing a final release) before hiring a public adjuster.  This way the fee may only be charged for the additional moneys the public adjuster gets for you.  Public adjusters are required to be licensed by the California Department of Insurance. To verify a public adjuster's license, call us at 1-800-927-4357 or check the status online by name or by license number. Practicing without a license is against the law.

KFBK's John Brenneise spoke with California Insurance Commissioner Dave Jones about wildfire coverage and tips for evacuees.