In October 2017, I was one of many who lost a home in the Northern California fires. Little did I know the financial and emotional toll this event would take on me and my family. It has taken me over a year to have the strength to write about this and relive the obstacles we had to overcome to come out on the other side.
I want to share what I have learned from this painful process with the hope that it will spur others to begin to better prepare themselves before a catastrophic event occurs. Or, if you have family or friends who are disaster victims, you can provide the needed support and better understand the emotional distress it may cause.
1. Understand your homeowner’s insurance policies inside and out. After a disaster is not the time to dig into your insurance policy’s “declaration page” to understand your coverage in plain noninsurance language. If you are like many Americans, your home is your largest asset. According to Nationwide, about two out of every three homes in America are underinsured.
As a result, it’s crucial that people meet with their insurance agent pre-disaster to fully understand their coverage. I recommend exploring different scenarios with your agent and asking detailed questions. Among them:
- If my house burned down partially or fully, what would I receive?
- Does coverage include replacement value or some other measure of loss?
- What are the exclusions to the policy?
- What information, including documents, photos, etc., would I need to provide the insurance company to receive my full payout?
- What are my deductibles?
- Who would be my point person during the claims process?
- Are there additional steps I should take now to protect myself?
After our disaster, I called my insurance agent immediately to get our claim started. Our homeowners policy was quite extensive with coverage including: dwelling/dwelling extensions/other structures, personal property, loss of use/additional living expenses, and other coverage. Obviously, insurance companies don’t issue 100% payouts the day after a tragedy. In fact, what you ultimately receive may never be the maximum benefit, so plan to work for every penny and be your own advocate. We had a claims adjuster bring us a check that was an advance against our claim and then we sat down with him to review what coverage we had under the policy.
2. Document your home. Documenting our loss was by far the most laborious process I have ever undertaken, not to mention emotionally draining. While we had numerous photos of the inside and outside of our home uploaded to the cloud, they were not nearly sufficient to the task. For months, my husband and I devoted our evenings to sitting in front of excel spreadsheets rebuilding our home on paper.
First, we were required to list the interior finishes of our home such as crown molding, baseboards, countertops, cabinets, flooring, etc. This step was hindered by the fact that we weren’t the original owners of the property and didn’t have architectural drawings or specifications. Second, we had to list outdoor items, including every plant and tree on our property. Third, we had to document the loss of all of our personal-property content down to the number of forks and socks.
The personal-property spreadsheet required the following information: item number, quantity, detailed description of item, brand name/model number, age of item, condition, today’s repair cost/replacement cost/amount of loss and documentation attached.
Logging and documenting thousands of items was a time-consuming and daunting task. It would have been easier if our photos and videos had included literally everything inside our home, as well as everything on the outside. And in a perfect world, receipts and appraisals would have been uploaded to the cloud.
One thing we learned while I was already well along in the process of documenting the content loss was that my insurance company was willing to pay 75% of the personal-property content loss without any documentation. Being so far along in the process ourselves we did not use this option, but it may be worth considering in your particular situation.
In addition, we found out that the insurance company had its own software program to record and document the loss. Using the insurance company’s software could have saved us the time we spent in creating our own Excel spreadsheets. Evaluate both options before starting the process.
Another option if you want help with the claims process is to hire a public adjuster to negotiate with the insurance company on your behalf. Some people go this route in hopes of receiving more money than if they had done everything themselves. However, public adjusters will charge for their services.
3. Know your game plan during and after the disaster. None of us want to confront the possibility of catastrophe or imagine what we should do during and after such an event. However, preparation in advance is essential. There are a number of questions we all need to think about and answer:
- What items will I absolutely need to take with me in the event of an evacuation order?
- If I lost my home, where would I go?
- Who would I need to call?
- Do I have money that I can access until I get an advance from the insurance company?
- How will I ensure my pets are taken care of if I don’t have a home?
- If the family is separated during the disaster, do we have a rally point or some other means of finding each other?
When it is safe to return to your home site, take photos and videos of whatever is left. If you are living in temporary housing, you will need to review with your adjuster what is and is not covered under “loss of use” coverage. And make sure to keep all receipts for expenses covered under that provision.
It may seem counterintuitive, but continue to pay insurance premiums and make your mortgage payments even if your home is completely destroyed–at least until you have determined what your legal rights are and how nonpayment will affect you. You also should apply for FEMA assistance.
Be careful. After the loss of your home you will be vulnerable and there are people who are willing to take full advantage of your vulnerability.
A vital lesson we learned is that the cost of rebuilding a home in an area where much of the housing has been destroyed is significantly higher than building costs before the disaster. Construction prices will go up significantly simply due to the forces of supply and demand. This issue, and ways to mitigate its effect such as replacement cost coverage, should be a focus of any discussion with your insurance agent about your current policy. I highly recommend you have that discussion now.
I’m so thankful to be past this chapter in our lives. It was a difficult experience but I am grateful for the many people who helped us along the way–and to the firefighters, police officers and neighbors who tried to save our home and the homes of so many others.
If this piece motivates readers to begin the process of preparing now for disasters–whether they be fires, earthquakes or hurricanes–it will have well served its purpose.
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