I'm a lawyer who's recovered large insurance claims. Here's my advice for fire victims looking to get paid out of their insurance.
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- The LA wildfires could cost insurance companies $30 billion.
- A lawyer who's helped recover millions in insurance claims shared his advice for those impacted.
- He said fire victims should start their claims now, list an inventory, and set up a new address.
This as-told-to essay is based on a conversation with Sean Andrade, managing partner of Andrade Gonzalez LLP, a boutique litigation firm in Los Angeles. The following has been edited for length and clarity.
Insurance coverage has been our biggest practice since the inception of our firm in 2013.
We've handled all sorts of insurance coverage matters, from major environmental disasters, chemical spills, and all kinds of other property losses.
In California, we've experienced disasters and related homeowner losses in the past.
We assisted a large public entity with losses associated with 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 Tropical Storm Allison's catastrophic flooding.
I live in South Pasadena, so I'm right next to the Eaton Canyon fire. I had to evacuate my family from our house and send them down 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 a lot of my friends did, including a lot 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 an enormous way — breaks my heart.
Here are my tips on claiming insurance after a natural disaster like a wildfire.
Start the claim now
As part of being insured, one of the duties you have is to promptly submit your claim. If you wait, you don't want policies to expire, although many of them have an extended reporting period.
The best thing a person who is insured can do is get their claim in as soon as possible. Contact the insurance company with the address and say they were impacted.
Then, 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 that you can be prepared to submit a more detailed claim.
It can help to record your inventory room by room, looking at all your past purchases, looking at photos and videos on your phone, and having your friends and family members look at the photos they took inside your house.
The more information you have, the better, so you can come up with the value you believe you're entitled to.
Estimate your losses
Insurance companies' policies are very different, so the amount you're entitled to will depend on their language and limits.
If you had a Van Gogh that you never disclosed to the insurer, I can pretty much guarantee they'd challenge it and say they were never made aware of it.
Even if the insurer doesn't dispute your claims, you may be capped at whatever your personal property limit is.
Under California law, insurers should advance 30% of the property limits up to $250,000 and four months of living expenses without having people file an itemized claim.
Depending on the insurer, an advance should happen within a matter of weeks. It is usually by check, but it's up to the insured person to arrange the best way to receive the money.
Insurers are not supposed to negotiate or pay less than what is considered reasonable value. Some insurers can also get your statements under oath if they're critical of what was on your lists.
Usually, from my experience, it takes a month to 40 days to evaluate a claim and determine whether coverage will be available. Once a claim is accepted, California law states that the company has 30 days to pay out.
Courtesy of Sean Andrade
Set up a new address and track your expenses
Update your insurer on where your address is or could be. You obviously don't want the insurers still sending mail to the address.
If you don't know where you're going, you may want to set up a PO box.
Also keep track of any displacement expenses, such as replacing clothes and finding a new place to live.
The insurance of last resort
One of the biggest problems is that people are going to be underinsured in a lot 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's insurance of last resort and doesn't cover anything beyond real fire loss, like theft, looting, or flooding.
One of the main questions will be: are people insured up to the value of their home?
Anyone in the Palisades area on the California FAIR Plan will be limited to the $3 million cap. If their house is worth more, the fire risk will not cover all the damage.
If parties are found culpable for the fires, some people may be able to recoup 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 the suits are successful, the victims could get recoveries beyond their insurance payouts.
The insurance payouts will only pay as much as the coverage that was purchased, but the litigation will be focused on making sure people and businesses are made whole.
This means that they may be able to recover more than their property damage claims, such as personal injury damages for pain and suffering and for emotional distress.
Do not rush, and take breaks
The biggest thing is not to rush. What I've seen is that a lot of people are going through a lot of distress.
You should work on it a little bit, as much as you can per day, to the extent that you have time. If you just mentally need a break, put it down for a few days and work on it afterward. Have friends help you.
