Southern California Wildfires: How to Navigate the Insurance Claims Process

Insurers explain common terms and what to do next

SACRAMENTO Calif. - As Southern California residents continue to be evacuated and thousands are facing the total loss of their home, insurers are deploying adjusters and resources into the area to launch this widespread rebuilding process. The American Property Casualty Insurance Association (APCIA) encourages homeowners to talk with their insurance company or agent to file their claim. Insurers can be contacted through their toll-free claims number , website, or by app or text.

"Losing your home in a wildfire is overwhelming. The first step is to file your claim. Insurers are quickly deploying adjusters and resources into Southern California to help policyholders file claims and kick start this massive recovery process," said Karen Collins, APCIA vice president, property & environmental. "Evacuees can also reach out to their homeowners insurer to understand benefits they may have available when under an evacuation order in California."

Damage from wind and wildfire are typically covered under standard homeowners, renters, or business property policies. Though individual coverage may vary by insurer, such as coverage provided under a California FAIR Plan policy versus coverage provided by a private insurer, thus it is important to review your policy. Wildfire damage to a vehicle is typically covered under an auto policy if the policyholder has purchased comprehensive physical damage coverage.

"Rebuilding your entire life and going through the claims process may feel daunting, but your insurer will assign an adjuster to your claim, and they will help walk you through the process step by step," said Collins. "In a massive disaster such as these wildfires, homeowners may talk with several adjusters. This is normal as insurers bring in extra adjusters to help policyholders as quickly as possible. Create a binder and take notes during your conversations with adjusters. You may be asked to create an inventory of what you had in your home, so gather photos of the inside of your home to remember what you had in each room. Your adjuster will help you through this process."

To help impacted Southern California residents begin the recovery process, APCIA is answering common questions related to insurance after a disaster:

I have reported my claim; now what should I do?

• Work with your adjuster to obtain additional living expenses and start finding temporary housing. Save receipts for expenses such as hotel, food, toiletries and clothes.
• Start gathering photographs or videos of your home to begin creating a home inventory.

How long does it take to settle a claim?

• Given the magnitude of these wildfires, there will be a large number of claims that will be total losses. Larger claims typically are settled in stages, not all at once. Each claim is unique, and insurers are working as quickly as possible to take care of their customers' needs. Insurers will provide resources to obtain Additional Living Expenses and funds to get temporary housing. As plans are made and a contractor is hired, it is common for insurers to issue multiple payments in phases as the home is reconstructed and inspected.

What if I have questions about how much my policy will pay out?

• Check your policy and discuss your coverage with your adjuster. Your policy may have a replacement cost provision, which means the insurer will provide benefits that will financially cover the cost to reconstruct your home to its pre-loss condition and replace your contents, up to your policy's coverage limit. Policies may include optional extended replacement cost coverage that may increase the dwelling coverage beyond the stated coverage A limits to help cover increased costs caused by demand surge, such as building materials and labor. For policies that include replacement cost coverage, your insurer may issue an initial payment for the actual cash value of your damaged property, then issue an additional payment for the remaining amount when the repair or replacement is completed.

How Do I Start Rebuilding?

• Once the wildfire is extinguished, officials will start the process to remove debris and conduct environmental cleanup from impacted communities, before reconstruction can begin. Policyholders should work with their adjuster for guidance or recommendations to interview and hire a contractor. That contractor will create a scope of work to rebuild the home using your insurance proceeds. Insurance will help cover the cost to reconstruct a home to its pre-loss condition, such as the size, shape and finish (e.g., square feet and number of bedrooms and bathrooms), up to the policy limits.

Common Insurance Terms - Understand Your Coverage

Once you start working with your adjuster you will hear terms about your insurance policy you may not be familiar with. Here is what you need to understand:

Coverage A: Dwelling (Covers cost of rebuilding structure)

Coverage B: Additional Structures (Covers detached structures like a garage)

Coverage C: Personal Property (Covers personal belongings like furniture, towels, sheets, appliances etc.)

Coverage D: Additional Living Expense (Covers temporary living expenses while under an evacuation order, up to 2 weeks, and while the home is being reconstructed due to a covered loss)

As coverage limits, optional endorsements, and any terms and conditions may vary by policy, it is important to review your policy language and reach out to your company to discuss any questions.

If your vehicle was destroyed:

• Report the loss to your auto insurer. Auto insurers understand that many cars were completely destroyed in these fast-moving wildfires. Cars will be covered under the comprehensive coverage selected in a auto policy.

Editor's note: Experts from the insurance industry are available to answer questions about the claims and recovery process. Reporters can contact Nicole Ganley [email protected] to ask insurance-related questions or set up interviews.

Additional APCIA resources:

Toll-free Insurer Contact Numbers

Step-by-Step Claims Guide

Getting Back Home - Insurance Claims Guide

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