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FAQ: Wildfires Insurance Recovery Webinar
Please note that this document is for educational purposes only, rather than legal advice.
Getting to Know Your Insurance and What It Covers
What are the relevant types of insurance coverage?
Homeowners insurance typically covers dwellings and other structures such as detached garages and sheds. Renters insurance focuses on personal property and loss of use. For commercial properties, property and business interruption insurance addresses direct physical loss or damage to property and covers whole or partial business interruptions.
How does an insurance policy work?
An insurance policy includes several key components:
Who are the key players in an insurance claim?
The policyholder, or insured, is the person or entity that purchases the policy. The insurer includes staff adjusters, supervisors, and in-house lawyers. Brokers assist in purchasing policies and claims handling. Outside adjusters can be retained by either the insurer or the insured. Outside coverage counsel is typically involved if disputes arise.
What responsibilities do insurers have when selling policies?
Insurers or brokers should always explain coverage, costs, and limitations. Brokers will help you compare options, while company-specific agents (e.g., State Farm, Geico) provide details on their policies only.
How to File and Handle an Insurance Claim
What can I expect in the claims process?
The claims process generally involves the following steps:
What are some tips for navigating the claims process?
Gather and review your insurance policies in full as soon as possible. Strictly adhere to deadlines but know they may be extendable in certain circumstances. Document your losses meticulously, keep comprehensive records throughout the claims process, and keep a separate box or electronic file of your records.
Clear communications are critical: Include identifying information, such as your name and claim number, in the heading of each email. Consider setting up a separate email specifically for communications with your insurer. Making dealing with you easier for the adjuster is to your benefit.
What is the timeline for insurance adjusters to visit?
Adjusters typically respond within 30 days, though timelines may vary due to resource constraints.
What are common insurance disputes?
Disputes typically arise over coverage (whether a loss is covered) or valuation (the amount covered). Coverage issues depend on the policy terms, exclusions, and sub-limits, and may require consulting counsel. Valuation disputes require reviewing policy language, including how depreciation and replacement costs are calculated.
What expenses should I continue paying for (e.g., mortgage, utilities)?
Maintain records of ongoing costs for services received, e.g., utilities, as you may recover these amounts from your insurance. If you are not receiving water, electricity, or gas, call your provider and cancel service until services can be provided and are needed. Consult your provider with regards to your mortgage, as certain provisions may allow for abatement under specific circumstances.
What if my home is still standing but damaged?
Even if your home remains standing, you should follow the claims process if the property is damaged or uninhabitable. Evaluate whether the property and the cause of damage (e.g., wind or smoke) are covered under your policy by reading the policy carefully.
What are public adjusters, and how do they work?
Public adjusters work on behalf of policyholders on a contingency fee basis. It is important to understand their fee structure and compare rates before hiring one, as their fees can be quite variable.
How should I respond to a claim denial or insurer offer?
In case of claim denials or unfavorable offers, a policyholder can seek clarification or mediation. It is essential to understand the specific reasons for denial or the terms of the offer.
FEMA, the California FAIR Plan, and GoFundMe
What can FEMA offer?
FEMA can provide financial assistance for housing, rental costs, home repairs, hazard mitigation, and more. FEMA assistance may complement insurance coverage but cannot duplicate benefits. In most cases, FEMA grants do not need to be repaid. Visit the FEMA website to learn more.
What is the California FAIR Plan?
The California FAIR Plan provides temporary coverage for those unable to secure insurance through traditional carriers. It is provided by an association of property insurers in California, not a public entity. Policy limits and the claims process may differ from that of traditional carriers. Visit the California FAIR Plan’s website to learn more.
Can you appeal a California FAIR Plan decision?
Appeals may depend on the type of dispute (valuation or coverage). Mediation with the California Department of Insurance or private mediation may be options.
Are there consequences to receiving proceeds from GoFundMe fundraisers?
It is important to understand which losses will be covered by FEMA and which by insurance, so that GoFundMe proceeds can be used for uncovered losses. Consult your policy carefully to determine these parameters.
Rebuilding, Selling, and Cleanup
How does rebuilding, versus selling, affect insurance?
Consult your policy carefully to determine how the insurer calculates the cost of rebuilding at the same site, versus accepting payment for the destroyed property and not rebuilding or rebuilding at a different location. Policies may allow for rebuilding with modern materials or better technology to ensure compliance with updated building codes.
What about landscaping coverage?
Some policies include provisions for trees, plants, and shrubs. Check your policy for specific language.
Liability & Legal Concerns
What are the tax implications of insurance payouts?
Replacement payouts are generally not taxable. However, additional benefits (e.g., mental health support as a result of the fires) may have tax implications.
If I accept partial payment, do I waive my claim?
Not necessarily. Ensure you have clear documentation about what the partial payment covers. Partial payments can expedite funds without negating your remaining claims.
Does the cause of the fire matter?
Certain causes of fire may be excluded under homeowner policies. For example, fires caused by electrical appliances may be excluded. Arson would usually not be reason for exclusion, unless the fire was caused by the homeowner.
What to Keep in Mind as a Policyholder
What should clients know about insurance?
Understand your policy before needing it, meet deadlines, and maintain clear communication with your insurer. Keep comprehensive records throughout the claims process.
Where Can I Find Additional Information and Resources?
Offering resources and guidance to help those impacted by the 2025 California wildfires with insurance claims, recovery, and accessing support services. United Policyholders offers expert advice, disaster recovery tips, and connections to official resources such as FEMA and local clinics.
Providing complementary legal services to Los Angeles County residents impacted by the wildfires including support with navigating insurance claims, filling out FEMA forms, reviewing leases, and assisting in communications with landlords. In collaboration with the Los Angeles Regional Small Business Legal Aid Program, Bet Tzedek is also providing free legal services to small businesses impacted by the fires.
Jewish Free Loan Association
Offering zero-interest, zero-fee Wildfire Relief Loans to people of all faiths and backgrounds. The loans, up to $15,000 per applicant, can be used to cover the cost of hotel stays, short-term rentals or other accommodations, to purchase basic necessities, to pay for medication or healthcare services, and/or to address unforeseen expenses resulting from the wildfires.
Legal Aid Foundation of Los Angeles
Providing free civil legal services to low-income individuals, assisting those affected by the 2025 Los Angeles wildfires with issues such as insurance claims, housing disputes, and employment rights. They provide guidance on navigating disaster relief programs and can help with replacing vital documents lost in the fires.
If you'd like to be updated as these and other resources relating to insurance recovery are developed, please opt-in here:
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