Top 10 Tips for Filing Fire Insurance Claims

As fires become an increasingly prevalent threat in places like California, insurance companies cut corners on fire insurance claims in an attempt to save money. The increasing threat of fires makes it very important to familiarize yourself with the claims process. You should learn what your policy covers and how to file fire insurance claims. An insurance claim, if filed properly, allows you to get reimbursed when you lose your property in a wildfire.

Losing your home and personal belongings to house fire damage is already a devastating experience. The last thing you want is your homeowners insurance company giving you a hard time regarding your claim. Here are some tips to follow when dealing with your homeowners insurance company regarding fire insurance claims.

1. Ask for an Advance Against Your Ultimate Fire Insurance Claim

If you were forced to evacuate due to dangerous conditions, you may not have grabbed essentials like toiletries or clothes. Some of these things may have even been completely lost in the fire. Don't panic. Call your property insurance company and ask for an advance check to cover emergency needs. That may include money for property damage and lodging. That way, you can purchase necessities without having to wait for your ultimate insurance coverage.

Take care of your needs, but don't go overboard. Be practical with what you buy because the insurance company will refuse to reimburse you for frivolous things. For example, if you need a pair of slacks and a dress shirt for work, don't assume you'll get full reimbursement for the most expensive clothes available. Home insurance companies are only required to accommodate you for reasonable replacement costs and additional living expenses covered under your policy.

Remember, this advance will be deducted from the total damage claim amount you receive from the insurance company, so don't hurt yourself by going overboard. Your homeowners insurance policy might also have a deductible, which means your payout might not cover all initial out-of-pocket expenses.

2. Make a List of Everything You've Lost and Don't Throw Anything Away

You'll want to make a list of everything affected by fire loss. That includes personal property affected by smoke damage or water damage related to putting out the fire. This can take some time and reflection from everyone in your household. You want to be sure to start making this list as soon as possible so that you will remember to include everything lost by the time you file your fire insurance claim.

Be sure not to throw anything away. It'll be easier to prove that you really lost the damaged items on your list if you hold on to them. This will allow the insurance adjuster to see the damage to your personal property. If you throw them away, the insurance company may refuse to compensate you even if your homeowners insurance covers the loss.

3. File Your Claim Right Away and Press the Insurance Company To Act ASAP

Insurance policies require policyholders to file their fire insurance claims as soon as possible. Call your homeowners insurance agent immediately to get the process started. The insurance company will require you to submit a proof of loss claim. This is where you list all of the items you lost, including their value.

Your prompt action is especially important if there are many other homeowners affected by the fire. If you don't act immediately, you could fall to the bottom of the list of policyholders who have fire insurance claims. It could be a long time before the adjuster reaches you. The following is a list of information to include in your claim:

• Date of loss
• Type of loss/damage
• Location of damage
• Any related injuries
• Others involved
• Condition of the home
• Description of damaged contents
• Any necessary temporary repairs
• A police and/or fire department report
• Photographs and/or videos

Dealing with the insurance company is a very complicated process involving countless calls, emails, letters, and documents. Be sure to keep track of all of the documents and communication, including post office receipts of mailing. Take notes, including the date and time, of every phone conversation and face-to-face meeting with your insurance company. Putting everything in a binder or file organizer will allow you to organize:

• Correspondences
• Invoices
• Bills
• Permits
• Contracts for repairs
• Insurance forms

Remember to always keep original documents of everything. If your insurance company wants proof of a document, make them a copy but keep the original. The more organized you are, the better prepared you'll be should your insurance company start playing the "he said, she said" game with you.

Since you're acting promptly to fulfill your responsibilities of the policy, your insurance company should also be prompt in acting on your fire insurance claim. In fact, the law requires insurance companies to handle claims on time, and most states give insurance companies specific timelines.

For example, California laws and regulations require insurance companies to send out a "notice of intentions" within 30 days of receiving a fire insurance claim. If there are no issues or disputes with your fire insurance claim, they must send you payment within that time as well.

If your insurance company is taking too long to get back to you, write to them and let them know that you're sending a copy of the letter to the state's Department of Insurance. This should prompt the company to act promptly toward claims settlement. They will not want to make a mistake or drag their feet if they know they are being monitored.

4. Secure Your Property To Mitigate Damage

The insurance company will require you to take reasonable care of your property. Therefore, be sure that you secure your property from further damage. If something is a total loss, of course, this is unnecessary. However, where only one section of your home is damaged, be sure to take proactive measures to prevent further damage. Insurance companies call this mitigating damage, which just means reducing the amount of damage. Ways to mitigate damages include:

• Covering holes in the walls and roof to protect from the elements
• Boarding up or building a fence to prevent looters
• Smoldering all embers
• Moving property that's at risk of further damage, such as moving the unharmed television out from underneath the hole in the ceiling

If your policy doesn't cover certain hazards, be mindful of unsecured property. For example, items left outside can be destroyed by subsequent vandalism or flooding. Because flood insurance is a separate policy, your fire damage claim might exclude those items. While it may be true that the property was placed outside to avoid fire damage, the insurance company could blame an uncovered hazard for the loss.

5. Keep Track of Your Living Expenses

Your insurance policy includes a clause called "loss of use," which means the insurance company reimburses you for additional living expenses while you're displaced from your damaged home. You're only entitled to the difference between:

• What it costs you while displaced
• What it was costing you in your home

For example, suppose your monthly living expenses had been $3,000 per month, but now you're having to add hotel stays, restaurant meals, laundry expenses, and extra gas for your car, totaling an additional $1,000. Your insurance company may only reimburse you the extra $1,000 per month.

Many people decide to stay with family members or friends instead of at a hotel. Sometimes the insurance company will reimburse your hosts for the additional costs of your stay, so ask your host to itemize the additional costs.

Take extra care to be reasonable and not frivolous, and be patient with your insurance company should they want to negotiate with you for this cost. Politely remind the company that you're saving the company a great amount of money in hotel and restaurant expenses by staying with loved ones.

6. Get the Right Repair Estimates and Keep Receipts and Documentation for Everything

Filing fire insurance claims enables you to repair or even rebuild your damaged home. Actual cash value policies entitle you to the amount it would take to return your home, including its contents, to its pre-fire fair market value.

Replacement policies entitle you to the amount it would take to replace the home and its contents, regardless of the value of what you lost. Replacement coverage doesn't require you to actually rebuild your home on the exact same lot. You can choose where you want to rebuild. So, as long as it's the same value as your old lot, your insurance covers it. Of course, if you move to where property is more expensive, you'll end up paying the difference.

If you decide not to rebuild, but to invest the money in something completely unrelated, like a business or college fund, the replacement policy may become an actual cash value policy.

The insurance company will require an estimate of the fair market value or cost of replacement of damaged property before the fire. Insurance companies will send out their own adjusters, so it's important to remember that they'll make decisions in the insurance company's best interest, not yours. You don't have to accept the numbers that they throw at you, and it may be a good idea to hire your own independent estimator or contractor.

The estimator or contractor you hire is paid by you and therefore will look out for your best interests. Don't accept any amount from the insurance company unless you're certain it's what a buyer would have paid for your home and its contents just before the fire.

Be sure to be picky when choosing a contractor. Choose one who is not only good and experienced in building, but also is experienced in how insurance companies handle issues. Before you agree to commence any work, be sure that you and the insurance company agree on the scope of the work to be done.

7. Keep Paying Your Insurance Premiums

Many people make the error of discontinuing their insurance premiums once they've filed fire insurance claims. This is a huge mistake. Your homeowners insurance may include liability protection for your home, including pets. So, if Spot, upset by the disaster and sad demeanor of the household, chews up your expensive sofa, you could be covered. However, if you stop paying your premiums, you run the risk of interrupting your coverage.

Also, remember to give your insurance agent the address of where you're staying. If your policy includes liability protection, have that address added to your liability coverage. To reduce your premiums after your new home is built, you can always play with different amounts of coverage.

8. It's Not Over Until You Say So

Insurance companies are quick to close fire insurance claims, especially in mass disaster situations. The longer your claim is open, the greater the chance you'll discover something you overlooked previously. In such a stressful and confusing time, you may forget to list an item of value in your initial insurance claim. Protect yourself by waiting a few months before consenting to close your claim. You do have this power.

Insurance companies will try and slide in the closure of a claim by adding a note to your check. For example, the check may say something like, "Acceptance of this payment will close your claim." You don't have to accept this. Before depositing, cross out the language and sign or initial next to it. Send insurance a letter thanking them for the payment, but asserting that you don't consider the claim closed.

9. Consider Hiring a Public Adjuster

If, after hiring your own independent estimator or contractor, you're unable to reach an acceptable settlement, consider hiring a public adjuster who will negotiate with the insurance company on your behalf. Some people fear doing this because of the extra cost, as you pay the public adjuster between 9% to 15% of what the insurance company ultimately pays you. This can be worth it, though, if the adjuster succeeds in getting you significantly more than you would have otherwise received. You can find a public adjuster on the National Association of Public Insurance Adjusters' website.

10. Don't Worry About Losing Your Insurance Coverage

Familiar with automobile insurance companies raising premiums or completely dropping drivers, many people fear that filing fire insurance claims will cause their homeowners' insurance company to do the same. You will lose your coverage as long as:

• You file only legitimate claims after real disasters
• You're not a "habitual claimant" who files claims too frequently
• There's no evidence of fraud on your part

Get Professional Legal Help After Filing a Fire Insurance Claim

If you need to report a fire in your home for insurance purposes, make sure you do so right away. The process may take a while to play out, and you may have to file multiple documents and answer questions from claims adjusters and investigators. If for any reason you believe you're not getting fairly compensated, you may want to contact a local real estate attorney for help. An insurance lawyer may also be useful.