Claim DENIED?! The TRUTH About The Insurance Process After a Disaster!

Published Date: 02/28/2025

Claim Denied? Understanding the Insurance Process After a Disaster

When catastrophe strikes—especially a disaster as devastating as California’s recent wildfires—the last thing any homeowner expects is for their insurance claim to become its own battle. Yet for many Californians, the process of recovering after a fire, flood, or earthquake is proving almost as stressful as the event itself.

In this episode of Insurance Hour, host Karl Susman walks listeners through the real-world complexities of filing a claim after a major disaster. His goal isn’t to sugarcoat the process—it’s to arm homeowners with the knowledge and tools to navigate it successfully. From starting a claim to understanding inspections, documentation, and payout structures, Susman provides a candid, practical roadmap for recovery.

1. Step One: Starting the Claim — Don’t Wait, Don’t Guess

The first step after any major loss is filing a claim—and according to Susman, speed matters.

“Claims after a catastrophe are handled on a first-come, first-served basis,” he explained. “The sooner you file, the sooner you’ll get into the queue for inspections and recovery.”

There are three ways to initiate a claim:

1. Contact your insurance company directly via their claims line.
2. Call or email your insurance agent or broker.
3. File online through your insurer’s website or app.

No matter how you file, get proof of submission. Whether it’s a claim number or a confirmation email, documentation ensures your request doesn’t get lost in the chaos of post-disaster backlogs.

Tip: Always ask for a claim number before hanging up or closing your browser. That’s your ticket to everything that follows.

2. Proving Your Loss — Documentation Without Overwhelm

A common source of anxiety for fire victims is: “How do I prove what I lost if everything is gone?”

Susman reassures listeners that insurance companies understand the scope of destruction caused by large-scale disasters like the California wildfires. “If your property is reduced to ashes, the adjuster knows what that means. You’re not going to have to list every single item down to the socks in your drawer.”

California’s Department of Insurance (CDI) has already issued consumer protections to prevent “documentation overload.” For example:

• You can group items together. Instead of itemizing every T-shirt, list “clothing – estimated value: $5,000.”
• You can provide general estimates of rooms or categories, not exact quantities.

Susman’s advice is simple: Start broad, and refine if needed. The insurer will guide you if they need additional detail.

“Don’t drive yourself crazy trying to remember every dish or every towel,” Susman said. “Start simple, stay honest, and let the adjuster direct you.”

3. Living Expenses and Temporary Housing: What’s Really Covered

After losing your home, the next question becomes: Where do I live now—and who pays for it?

Most homeowners’ policies include Additional Living Expense (ALE) coverage, designed to help you maintain a reasonable standard of living while displaced. This can cover:

• Temporary housing (hotel, Airbnb, or rental home)
• Food and utilities
• Transportation and pet boarding

However, every policy is different. Some provide a fixed dollar limit (e.g., $100,000) to use over 12 months, while others pay “reasonable and customary” costs for up to a certain time period.

Following recent wildfires, the CDI mandated that insurers extend ALE benefits from 12 to 24 months—even if your policy only listed one year. That extension helps, but it means your available funds must now stretch twice as far.

4. Smoke Damage vs. Fire Damage — Don’t Underestimate the Invisible Threat

Not every home in a wildfire zone burns down—but many suffer severe smoke damage, which can be just as devastating.

Susman shared firsthand experiences touring homes that looked intact from the outside but were filled with toxic ash and melted interiors.
“This isn’t the smell of a fireplace,” he said. “It’s chemicals, plastics, building materials—all burned and airborne. It’s dangerous.”

Most standard homeowners’ policies that cover fire damage also cover smoke damage, but these cases are more complicated to assess. Unlike a total loss, smoke damage claims involve multiple layers of evaluation:

• Structural integrity
• Air quality testing
• Furniture and contents restoration
• Cleaning or replacement of HVAC systems

In many cases, smoke damage claims take longer to settle than total losses.

Susman’s takeaway: “Your home doesn’t need to be in ashes to qualify for coverage.”

5. Inspections and Adjusters — Who Shows Up, and When?

Once your claim is open, your next point of contact is the claims adjuster or inspector. This person’s job is to verify damage and assess costs.

After large-scale disasters, inspections may be delayed—not because insurers are stalling, but because every property must be verified with boots on the ground. Regulations require on-site verification to ensure fairness and consistency across claims.

For total losses, the inspection may be brief. For partial losses or smoke damage, it’s far more involved.

Susman recommends that homeowners attend inspections when possible, especially for partial losses:

• Take photos and videos of what the adjuster sees.
• Ask questions about the process.
• Keep notes of any comments or concerns.

And most importantly—document everything. Keep a dedicated folder for all claim emails, reports, receipts, and correspondence.

“Email everything,” Susman emphasized. “It keeps everyone on the same page, and it gives you a written record if something’s ever disputed.”

6. Independent Adjusters: When (and When Not) to Hire One

If you feel your insurance company’s adjuster isn’t being fair or responsive, you might consider hiring a public or independent adjuster—a third-party professional who negotiates on your behalf.

But Susman cautions homeowners to exhaust all other options first. “You’re already paying your insurer to handle this. In most cases, you shouldn’t need to pay someone else.”

Independent adjusters typically take a percentage of your final payout—sometimes as much as 10%–15%. Before signing any contract, talk to your agent, file a complaint with the insurer, or contact the CDI for assistance.

7. Safety First: Entering and Cleaning Your Property

Before re-entering your damaged home, wait for clearance from local authorities or environmental health officials. Even if your structure appears stable, it may contain hazardous chemicals, soot, and toxic ash.

Susman urged listeners to resist the emotional urge to salvage keepsakes without expert help:

“Nothing in your house is worth your health or your family’s safety.”

If you must retrieve belongings:

• Wear protective gear (N95 mask, gloves, goggles).
• Document everything before moving it.
• Don’t wash or store items until professionals deem them safe.

Cleaning smoke damage should always be done by certified restoration companies, not homeowners. Improper cleaning can spread contamination or ruin valuable items.

8. Handling Finances After a Fire

Wildfire victims often face an immediate cash crunch—especially when their documents, IDs, and credit cards are destroyed.

Insurance companies are required to issue advance payments quickly, often via direct deposit or prepaid debit cards. Billions of dollars in early disbursements have already been made in 2025, according to Susman.

To manage your finances efficiently:

• Prioritize essentials: focus on credit cards, ID, and insurance documents first.
• Open a P.O. Box: as you move between temporary locations, it ensures mail stability.
• Set up auto-pay for remaining policies to avoid accidental cancellations.

9. Mortgage and Property Tax Relief

Many homeowners ask whether mortgage and property tax payments can be deferred. The answer is yes—but with caveats.

Most major lenders will pause payments for 1–3 months if you request disaster relief. However, those payments aren’t forgiven—they’re deferred, meaning you’ll owe them later.

For property taxes, you can apply for a disaster reassessment through your county assessor’s office. The value of your property will temporarily drop to reflect its damaged condition, potentially saving thousands in taxes until you rebuild.

10. Rebuilding and Permits — A Marathon, Not a Sprint

Reconstruction after a wildfire isn’t quick. With limited contractors, material shortages, and environmental restrictions, it can take months just to begin rebuilding.

Los Angeles County and other affected regions are setting up remote permitting offices near burn zones to expedite approvals, but Susman warns against cutting corners:

“We can’t rebuild in a dangerous way for the sake of speed. Do it right the first time.”

Final Thoughts: Patience, Documentation, and Persistence

The insurance process after a disaster can feel impersonal and painfully slow. But as Karl Susman reminds listeners, every step—no matter how bureaucratic—exists to create fairness and accountability.

“Your insurance policy is a contract. You’re entitled to what’s in it, no more, no less. Be honest, be thorough, and stay persistent.”

Recovery after a wildfire isn’t just about rebuilding your home—it’s about rebuilding your peace of mind. With preparation, patience, and good documentation, you can ensure your insurance claim brings you the support you deserve, not another crisis to survive.