Over 6,000 structures have been destroyed in Southern California this week as devastating wildfires, fueled by powerful Santa Ana winds, swept through multiple neighborhoods across greater Los Angeles. Residents and business owners now face a long road to recovery, one that experts predict could take years due to the scale of the damage.
Though the full extent of the destruction is still being assessed, it’s expected to be one of the costliest natural disasters in U.S. history. AccuWeather estimates the damage could reach at least $52 billion, ranking the wildfires among the top ten catastrophes by property loss in the country.
As people begin the daunting task of rebuilding, those filing insurance claims can expect a long and complex process, particularly in California’s challenging insurance market. Many individuals may find they are underinsured, or even uninsured, leaving them to navigate the recovery without adequate financial support.
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Here are some key tips from insurance experts and financial advisors to help those affected by the wildfires:
1. Prepare for the Process
The emotional toll of a disaster can cloud judgment, making it essential for homeowners and business owners to take a moment to process before making any major financial or personal decisions. Financial planner Sara Stanich advises taking time to recover emotionally and mentally before jumping into the claims process.
For more guidance, Stanich recommends visiting United Policyholders, a nonprofit that offers valuable resources and detailed explanations of the entire insurance claims process. California’s unique state laws can complicate matters, so understanding your rights and knowing what to ask for is critical. United Policyholders also maintains a list of California-based legal professionals who specialize in insurance claims.
2. Contact Your Mortgage and Insurance Agents
Rajni Kapur, CEO of All Solutions Insurance, urges evacuees to immediately contact both their mortgage and insurance companies to inform them of their situation. These companies can assist in retrieving necessary documents and provide guidance on next steps if important papers were left behind during evacuation.
3. File Your Insurance Claim Quickly
Insurance experts stress the importance of filing claims as soon as possible. Early submission ensures access to expedited financial aid and other resources. If contacting an insurer proves difficult, some residents have found success by calling right when business hours begin, or by using their insurer’s mobile app to file a claim immediately.
Business owners should also document damaged inventory and property to file claims for commercial losses. In some cases, policies may cover not only property damage but also lost income.
4. Ask for a Cash Advance
In California, after an officially declared disaster, insurers are required to provide policyholders with a cash advance of at least 30% of their dwelling insurance limit. United Policyholders advises requesting this advance, as well as up to four months of coverage for temporary housing and living expenses. Make sure to get these agreements in writing.
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5. Save All Receipts
As residents rebuild their lives, they will need to purchase necessities like clothing, housing, and food. Keep all receipts, as they can help recover the full value of lost items under your policy’s loss of use coverage. Keeping a recovery diary, with notes on who you spoke to and what was discussed, can also be helpful for tracking the claims process.
6. Document Everything You Can
If you are able to return to your property, take detailed photographs and videos of the damage. These will support your insurance claim and may help expedite the process. If possible, include pre-disaster photos to strengthen your case.
Also, document all communication with your insurance company, and try to get any agreements or offers in writing. Consider approaching your claim as a business transaction to ensure you receive the maximum payout to which you’re entitled.
7. Inform Your Landlord
Renters should notify their landlords as soon as possible if the rental property has been affected. Landlords are responsible for filing claims for the building, but renters should file a claim for any personal property damage. If your policy includes temporary housing coverage, review the details with your insurance provider.
8. Register with FEMA
Even if you have insurance, you can still apply for assistance through FEMA if you reside in a federally declared disaster area. FEMA can help bridge any gaps in your insurance coverage and assist with the recovery process, especially if you have been waiting more than 30 days for a homeowner’s claim to be processed.
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9. Beware of Scammers
Scammers often prey on disaster victims, so Stanich advises staying cautious of anyone pushing you to sign documents urgently. Take your time to evaluate offers and make decisions carefully, ensuring you fully understand all options before agreeing to anything.
10. Get a Second Opinion
If your insurance adjuster quickly offers a settlement, consider seeking a second opinion before accepting. Hiring a public adjuster may be a good idea—this professional can help you review your policy, negotiate a fair settlement, and ensure your claim is handled appropriately. Be sure to clarify their fees before hiring them.
11. Make Digital Copies of Important Documents
To avoid the loss of critical documents like insurance policies, deeds, or identification in a disaster, consider creating digital copies and storing them in a secure cloud service. For those who still need to collect important papers, a fireproof safe can provide an extra layer of protection for physical copies.
Recovering from a disaster of this magnitude will be challenging, but with careful preparation, prompt action, and the right resources, homeowners and business owners can begin the long journey toward rebuilding their lives and properties.
