California Burning: How to make a viable insurance claim for fire damage

“A spark neglected makes a mighty fire.”

— Robert Herrick

Fires are burning throughout California. If your home has been damaged, here’s how to make a viable insurance claim for fire damage.

Document the Damage

Make of list of all personal property that was damaged and keep any damaged personal property. Take lots of photos of the damaged personal property and the damaged home.

Don’t allow your property to suffer additional damage, like theft. Protect personal property if you think it may be stolen.

Make a Timely Claim

Contact your homeowners insurance company as soon as possible and make a claim for fire damage. Insurers operate on a “first come, first served” basis, so it’s important to make a claim soon because it’s likely many other homeowners will be making a claim.

File a police report.

Keep a Paper Trial of ALE

ALE stands for “additional living expenses,” also known as “Loss of Use.” You are entitled to be compensated for ALE in the event of fire damage, but you should document your expenses. Save gas, food, and hotels receipts. Give them to the insurance company and claim compensation for “Loss of Use.” You don’t have to sleep in a shelter. Stay in a hotel and send the bill to your insurance company.

Have your Home Inspected

The insurance company will send someone to inspect your home. Make sure the inspection is thorough. The following should be checked: the roof, stucco, structural steel, windows, HVAC system, and walls.

Determine the Source of the Fire

This is tricky. It may be that a third party negligently caused the fire. In that case, you can make an insurance claim for fire damage (“first party claim”), and then bring a claim against the negligent party (“third party claim”). You’re unlikely to fully recover under your homeowners policy, so it’s important to seek full reimbursement from a responsible third party.

Be aware that if you do pursue a third party claim, your insurance company may try to intervene. But that intervention can be limited by the “Made Whole Doctrine.”

Addendum

And here are a few other things you should know:

  •  You may have a partial loss claim if the fire didn’t destroy your entire home. If so, be concerned about unseen damage (e.g. smoke damage, ash in the ducts);
  • Insurance payments may be made on a partial basis. If so, read each check carefully. Don’t sign it if it reads “Payment in Full.” And if you have a mortgage, it’s likely that the bank will be listed on the check as a payee;
  • Understand whether your policy provides Replacement Cost Value (“RVC”) or Actual Cash Value “ACV”). The former does not discount for a decrease in value; the latter does;
  • If the fire damaged your car, make a claim with your car insurance company. The damage should be covered under comprehensive coverage;
  • Your homeowners policy should cover damage to trees and shrubs in your yard; and
  • A third party who negligently damages a person’s “timbers, trees, or underwood” is responsible for 3 times the value of the trees and vegetation (Cal. Civil Code 3346). In case you wondered.

Questions? Contact Me for a free consultation.

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