- The LA fires could cost insurance companies $30 billion.
- A lawyer who has helped recover millions of insurance claims shared his advice for those affected.
- He said fire victims should start their claims now, list an inventory and set a new address.
This essay is based on a conversation with Sean Andrade, managing partner e Andrade Gonzalez LLPa boutique litigation firm in Los Angeles. The following has been edited for length and clarity.
Insurance coverage has been our largest practice since our firm’s inception in 2013.
We have handled all types of insurance coverage issues, from major environmental disasters, chemical spills and all types of other property losses.
In California, we have experienced homeowner disasters and losses in the past.
We assisted a large public utility with 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 the catastrophic flooding of Tropical Storm Allison.
I live in South Pasadena so I am near 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 thankful 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 being created by the fires – and how people have been devastated in such a big way – breaks my heart.
Here are my tips for looking for insurance after a natural disaster like a wildfire.
Start the request now
As part of being insured, one of your duties is to file your claim promptly. If you wait, you don’t want policies to lapse, although many have an extended reporting period.
The best thing an insured person can do is to get their claim in as soon as possible. Contact the insurance company with the address and say they are affected.
Then, contact your broker and ask for a copy of your insurance policy.
List your inventory
Start preparing lists of your inventory and what you had at home so you are prepared to submit a more detailed claim.
It can help you record your inventory room by room, view all your previous purchases, view photos and videos on your phone, and have your friends and family members view photos they’ve taken inside the house your
The more information you have, the better, so you can come up with the value you believe is right.
Estimate your losses
Insurance companies’ 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 guarantee they would challenge it and say they were never made aware of it.
Even if the insurer does not dispute your claims, you may be limited to any extent of your personal property.
Under California law, insurers must advance 30% of property limits up to $250,000 and four months of living expenses without requiring people to file an itemized claim.
Depending on the insurer, a down payment should happen within a few weeks. It is usually by cheque, but it is up to the insured to arrange the best way to receive the money.
Insurers should not negotiate or pay less than what is considered reasonable value. Some insurers may also take your statements under oath if they are critical of what was on your lists.
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 says the company has 30 days to pay.
Sean Andrade told BI that insured victims of the Los Angeles fire should start their claim as soon as possible. Courtesy of Sean Andrade
Enter a new address and track your expenses
Update your insurer where your address is or may be. You obviously don’t want insurers to send mail to the address yet.
If you don’t know where you’re going, you might want to put a mailbox.
Also keep track of any moving expenses, such as replacing clothes and finding a new place to live.
Last chance insurance
One of the biggest problems is that people will be underinsured in many of these areas because many insurers have left California.
Some people moved to the California FAIR Plan, which is insurance through the state of California. By definition, it is last-resort insurance and does not cover anything beyond actual loss from fire, such as theft, robbery or flood.
One of the main questions will be: are people insured on the value of their home?
Anyone in the Palisades area on the California FAIR Plan will be limited to the $3 million limit. 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 electric company, but others could also be found liable based on their negligence.
If lawsuits are successful, victims may receive recoveries beyond their insurance payouts.
Insurance payouts will only pay as much as the coverage that was purchased, but the lawsuit will focus on making sure people and businesses get paid.
This means they may be able to recover more than their property damage claims, such as personal injury damages for pain and suffering and emotional distress.
Take your time and take a break
The biggest thing is not to rush. What I have seen is that a lot of people are going through a lot of trouble.
You should work a little, as much as you can in a day, as much as you have time. If you just mentally need a break, leave it for a few days and then work. Let your friends help you.
