Questions to Ask Your Insurance Provider About Wildfires

Wildfires cost the United States billions of dollars every year. Their impact can be devastating to both the environment and people’s lives. The 2020 wildfires in California are a good case in point and highlighted the seriousness of the problem.

According to Cal Fire, wildfires in California burned down 4,257,863 acres, damaged or destroyed 10,488 structures, and led to 33 fatalities in 2020.

To make matters worse, insurance companies operating in California refused to renew 235,250 homeowners insurance policies in 2019, a 31% increase from the prior year. And for ZIP codes that had a moderate to very high fire risk, non-renewals jumped 61%.

California Department of Insurance Commissioner Ricardo Lara issued a one-year moratorium on insurance companies non-renewing or cancelling residential property insurance policies. This came into effect in November 2020 and was done to protect 2.4 million policyholders that were affected by the 2020 wildfire season.

According to Commissioner Lara: “My action gives millions of Californians breathing room and hits the pause button on insurance non-renewals.” However, “hitting the pause button” only provides temporary relief.

Wildfire in a wood in California

California isn’t the only state that’s prone to wildfires. Other high-risk states include Texas, Colorado, Arizona, Idaho, Washington, Oklahoma, Oregon, Montana, and Utah. There are reportedly more than 4.5 million properties in the United States that are at high to extreme wildfire risk.

Are Wildfires Covered By Homeowners Insurance?

A standard homeowners insurance policy will typically cover fire damage, including damage caused by a wildfire.

This includes the costs to repair or rebuild your home, and repair or replace your belongings. And if you can’t live in your house due to smoke and fire damage, most homeowners insurance policies provide Additional Living Expense (ALE) cover.

ALE cover typically pays for temporary accommodation and other expenses you have to incur, in addition to your regular expenses, due to damage caused by a wildfire.

Check your homeowners insurance policy to make sure wildfire damage hasn’t been specifically excluded from your policy.

Note: You might have a hard time getting homeowners insurance if your home is in a fire-prone area. Most states, including California, offer a last-resort type of insurance called Fair Access to Insurance Requirements (FAIR Plans). It’s worth considering if you don’t have other options.

Questions to Ask Your Insurance Company Before a Wildfire Claim

If you’re worried about whether you’re adequately covered against wildfires, the time to speak to your insurance company is before you suffer wildfire damage. Leaving it until after the event is leaving it too late.

If you’re not sure what questions to ask, the questions below will help to ensure that you don’t forget some important questions.

Make sure you have a pen and paper ready to write down important details and ask for confirmation in writing. You should also write down the name of the person you speak to as well as the date and time of your call.

Homeowners Insurance Policy

Am I covered for smoke and fire damage caused by a wildfire?

Are there exclusions in my policy that I need to be aware of?

Am I insured for Actual Cash Value or Replacement Cost Value?

How much am I insured for and what are my policy limits? 

What’s my deductible and how is it applied?

Is there anything I can do to protect my home from wildfires?

Do I have Additional Living Expenses (ALE) coverage, and what does it include?

What are my ALE limits?

How and when are ALE payments usually made?

What’s the best way to compile an inventory?

What details do I need to include in my inventory for every item?

Settlement Agreement

How is a settlement amount usually calculated?

What if the total settlement amount isn’t enough to cover all damages?

Questions to Ask Your Insurance Company During a Wildfire Claim

Have a pen and paper ready to write down important details and ask for confirmation in writing. Remember to write down the name of the person you speak to as well as the date and time of your call.

Filing a Homeowners Insurance Claim

What documents do I need to complete?

Where can I access these documents?

Are there any time constraints?

How do I submit an inventory of items that have been damaged or destroyed?

What if I accidentally forget to include certain items?

When will an insurance adjuster be appointed?

How will I be kept up to date on the status of my claim?

Who can I contact if I have any questions, queries or concerns?

If Your Home Has Been Destroyed or Isn't Safe to Live In

Can I get an advance to pay for Additional Living Expenses?

What can I do to protect what remains of my home?

Settlement Agreement and Payments

How long will it take before I receive a settlement amount?

When can I expect the first check and how much will it be?

When will the remaining checks be issued?

Is there anything I can do that will help to settle my claim faster?

Cleaning up and Repairs

When can I start cleaning up?

Can I hire a cleaning or remediation company and how will they be paid?

Can I do certain repairs myself?

When can I start hiring contractors?

How will contractors be paid?

Do I need to get approval before hiring a contractor?

What if I am not satisfied with the workmanship of a contractor?

Conclusion

Wildfires can be a nightmare. The questions we mentioned you should ask your insurance company before you become the victim of a wildfire and during a wildfire damage claim can guide you in the right direction. However, they are by no means an exhaustive list of questions. 

In addition, asking the right questions is one thing, but managing insurance challenges is a totally different story. Understanding the fine print in your policy, negotiating with an insurance adjuster, and dealing with contractors can be notoriously difficult.

Hiring a public adjuster who works for you and has your best interests at heart can help a lot! They understand the fine print of your policy, can often negotiate a better settlement agreement with your insurance adjuster, and know how to deal with contractors.   

Avner Gat, Inc. has over 15 years of experience as a public adjuster in Southern California. We protect homeowners from the games and fine print that insurance companies are known for.

Call us at (818) 917-5256 to find out how we can assist you.