- Los Angeles wildfires could cost insurance companies $30 billion.
- An attorney who has helped recover millions of dollars in insurance claims has shared his advice for those affected.
- He said fire victims should start their claims now, take an inventory and establish a new address.
This essay as told is based on a conversation with Sean Andrade, Managing Partner of Andrade González LLPa specialist litigation firm in Los Angeles. The following has been edited for length and clarity.
Insurance coverage has been our largest practice since our firm was founded in 2013.
We have handled all kinds of insurance coverage issues, from major environmental disasters, chemical spills and all kinds of other property losses.
In California, we have experienced disasters and homeowner losses in the past.
We helped a large public entity suffer losses related to the Porter Ranch gas leak in 2015. Our partner, Steve Masterson, helped provide free insurance recovery assistance to dozens of Houston residents whose Homes were damaged by catastrophic flooding from Tropical Storm Allison.
I live in South Pasadena, so I’m right next to the Eaton Canyon Fire. I had to evacuate my family from our home and send them to Orange County to stay with my best friend.
This is my home and my community. I’m so grateful we didn’t lose our home. But many of my friends did, including many of my children’s friends and teachers.
Just hearing about the frenzy created by the fires – and how people were devastated in such an enormous way – breaks my heart.
Here are my tips for claiming insurance after a natural disaster like a wildfire.
Start Claiming Now
As part of your insurance, one of your obligations is to promptly submit your claim. If you wait, you don’t want policies to expire, even though many of them have an extended reporting period.
The best thing an insured person can do is file their claim as quickly as possible. Contact the insurance company with the address and say they were affected.
Next, contact your broker and request a copy of your insurance policy.
List your inventory
Start preparing lists of your inventory and what you had in the house so you are ready to submit a more detailed claim.
It can be helpful to record your inventory room by room, review all your past purchases, look at photos and videos on your phone, and ask friends and family members to look at the photos they have taken inside your home.
The more information you have, the better, so you can determine what value you think you are entitled to.
Estimate your losses
Insurance company policies are very different, so the amount you are entitled to will depend on their language and limits.
If you had a Van Gogh that you never disclosed to the insurer, I can almost guarantee they would dispute it and say they were never informed about it.
Even if the insurer doesn’t dispute your claims, you may be capped regardless of your personal property limit.
Under California law, insurers must advance 30 percent of property limits up to $250,000 and four months of living expenses without people filing a detailed claim.
According to the insurer, an advance should be received within a few weeks. This is usually by check, but it is up to the policyholder to determine the best way to receive the money.
Insurers are not expected to negotiate or pay less than what is considered a reasonable value. Some insurers may also obtain your affidavits if they criticize what was on your listings.
Usually, in my experience, it takes a month to 40 days to evaluate a claim and determine if coverage will be available. Once a claim is accepted, California law states that the company has 30 days to pay.
Sean Andrade told BI that insured victims of the Los Angeles fires should begin their claims as soon as possible. Courtesy of Sean Andrade
Create a new address and track your spending
Inform your insurer where your address is or could be located. You obviously don’t want insurers to continue sending mail to this address.
If you don’t know where you’re going, you may want to create a PO box.
Also keep track of any travel expenses, such as replacing clothes and finding new accommodation.
Last resort insurance
One of the biggest problems is that people are going to be underinsured in a lot of these areas because a lot of insurers have left California.
Some people have opted for the California FAIR Plan, which is insurance offered by the State of California. By definition, it is insurance of last resort that does not cover anything beyond actual losses due to fire, such as theft, looting or flooding.
One of the main questions will be: are people insured up to the value of their homes?
Anyone living in the Palisades area who benefits from the California FAIR plan will be limited to the $3 million cap. If their home is worth more, the fire risk won’t cover all the damage.
If the parties are found at fault for the fires, some people may be able to recover the full amount of their losses through litigation.
At least two lawsuits have already been filed against Southern California Edison, the power company, but others could also be found liable for their negligence.
If the lawsuits are successful, victims could obtain compensation beyond their insurance payouts.
Insurance claims will only pay for the amount of coverage purchased, but the litigation will aim to ensure people and businesses recover.
This means they may be able to recover more than just their property damage claims, such as personal injury claims for pain, suffering and emotional distress.
Don’t rush and take breaks
The most important thing is not to rush. What I saw was that a lot of people were experiencing a lot of distress.
You should work on it a little, as much as you can per day, as long as you have time. If you just need a mental break, give it a few days and then work on it. Ask friends to help you.
