Navigating Insurance Claims for Wildfires
Published Date: 01/26/2025
As California continues to battle record-breaking wildfires, thousands of residents are once again facing the aftermath—displacement, uncertainty, and the daunting process of filing insurance claims. Wildfires don’t just destroy homes; they test the limits of the insurance system itself.
In a recent Insurance Hour discussion, Karl Susman, a longtime California insurance expert and host of the program, shared crucial guidance for homeowners trying to navigate the complex claims process after a catastrophic fire. His insights help separate panic from practicality, offering a roadmap for homeowners to recover both financially and emotionally.
1. Fire: The One Constant in Property Insurance
Fire damage is among the most universally covered perils in insurance. Whether you own a home, condominium, or rent an apartment, fire coverage is typically included in every property insurance policy.
As Susman explained:
“It’s very unusual to have any type of property insurance policy—homeowners, condo owners, renters, HOAs—without fire coverage as the primary peril. The only exception would be a policy where fire is excluded because it’s being obtained somewhere else.”
This means that even if other risks—like flood or earthquake—require separate coverage, fire protection is almost always built in. Homeowners can take comfort knowing that unless they’ve explicitly waived or replaced that coverage, they’re protected.
2. Don’t Wait—File the Claim Immediately
One of Susman’s strongest recommendations for evacuees and affected homeowners is simple but vital: file your insurance claim right away.
Even if you’re unsure about the extent of your damage—total loss, partial loss, or just smoke exposure—starting the claim early helps establish your eligibility and triggers important coverage benefits like Additional Living Expenses (ALE).
“If you’re evacuated, put the claim in,” Susman emphasized. “Whether you know if there’s a total loss, a partial loss, or smoke damage—file it. Don’t wait.”
Many homeowners hesitate, worrying that filing a claim might affect their record or future premiums. However, Susman clarifies a key distinction:
“When it comes to catastrophe losses like wildfires, the insurance industry does not rate people based on catastrophe claims. These aren’t underwritten on an individual basis. It’s not something within the consumer’s control.”
In short, your rates won’t increase simply because you were caught in a wildfire zone.
3. Immediate Coverage: Your Policy Pays for Temporary Living Costs
Most homeowners’ policies include Additional Living Expense coverage, which reimburses displaced families for temporary housing, food, and other essentials while their homes are uninhabitable.
If you can’t cook at home, your insurer will typically cover restaurant meals. If you have to move into a hotel or rent another home, those costs are reimbursable too.
However, in the aftermath of large-scale disasters, price gouging can become a serious problem.
Susman shared reports of landlords in wildfire zones charging up to 8–9 times their normal rent. While California law caps rent increases after a declared disaster at 10%, enforcement remains challenging.
“People were being charged twenty-five thousand dollars a month for homes that rented for four thousand before the fire,” Susman said. “Insurers are paying it because they have to—but those costs will come back to haunt everyone in premiums.”
The California Department of Insurance (CDI) has deployed task forces to investigate and curb this abuse, but homeowners should still report suspicious rent hikes or unfair practices through the CDI’s Consumer Hotline (800-927-4357).
4. Be Strategic Before Hiring Help
After major fires, homeowners are often approached by public adjusters or attorneys offering to handle their claim for a percentage of the payout—sometimes 10–20%.
While these professionals can be valuable in cases of denied or delayed claims, Susman cautions against bringing them in too early:
“Unless you’ve been told ‘no’ in writing—by a supervisor, not just an adjuster—it doesn’t make sense to add drains on your recovery funds. Handle it yourself first. If problems arise later, then seek help.”
In other words, start by working directly with your insurer and your agent. Escalate issues within the company before paying for outside representation. Every dollar spent on commissions or legal fees comes directly out of the funds available to rebuild.
5. The Danger of Dropping Coverage: “If I Can’t Have It All, I’ll Have Nothing”
Susman also warns against a dangerous mindset emerging among some homeowners frustrated by limited insurance availability:
“Some people are saying, ‘If I can’t have everything, I’ll have nothing.’ That’s a choice—but a risky one.”
For homeowners with mortgages, dropping insurance altogether can trigger force-placed insurance by the lender. This type of coverage protects the bank, not the homeowner.
“All forced insurance does is pay off the mortgage to the bank,” Susman explained. “It doesn’t rebuild your home—and you’re still paying for it.”
Essentially, the homeowner ends up paying for insurance that only benefits the lender, while losing protection for their own property and belongings.
6. Document Everything: Your Paper Trail Is Your Best Protection
As with any insurance claim, documentation is your strongest defense. Keep organized records from the moment the fire begins:
- Dates and times of evacuation orders
- Copies of all communications with your insurer or adjuster
- Receipts for meals, hotels, and temporary housing
- Photos or videos of the property before and after the fire
Susman’s advice:
“Stay in touch with your carrier and your adjuster. Document everything. Keep everyone on the same page, and advocate for yourself.”
By policy and by law, insurers must act in good faith, meaning they’re required to handle your claim honestly and promptly. But having detailed records ensures that if disputes arise, you have proof of compliance and cooperation.
7. Don’t Panic Until It’s Time to Panic
In an unusually personal note, Susman—a wildfire evacuee himself—urged calm in the face of chaos:
“I’ve been evacuated twice. Don’t panic until it’s time to panic.”
He emphasized that, despite delays and confusion, most carriers are fulfilling their obligations.
“So far, there’s no reason to have that level of concern. I haven’t seen anything that suggests people won’t get their money.”
That perspective is rare amid social media speculation and misinformation. While frustration is understandable, the data shows that most major insurers have paid billions in wildfire claims over the past decade—slowly at times, but consistently.
8. Work With Your Adjuster, Not Against Them
The insurance adjusters handling wildfire claims are often stretched thin, managing hundreds of cases at once. Some are brought in from out of state to help with volume, meaning they may not be familiar with local conditions or California-specific laws.
Rather than assuming bad faith, Susman encourages homeowners to maintain a cooperative tone:
“Remember, the carrier is working with you. They’re required to act in good faith. Go into this with the mindset that everyone wants the same thing—to get you back into your home.”
Keeping communication respectful and professional can speed up resolution and minimize misunderstandings.
9. A Practical Checklist for Wildfire Claimants
Immediately After Evacuation:
- File your claim, even if you’re unsure of damage.
- Ask about ALE (Additional Living Expense) coverage.
- Save every receipt.
Within the First Week:
- Contact your mortgage lender about temporary accommodations.
- Take photos of damage once it’s safe to return.
- Request written updates from your insurer.
Within the First Month:
- Get multiple estimates for rebuilding or repair.
- Review your policy limits and endorsements.
- Consider consulting a licensed public adjuster only if your claim stalls or is underpaid.
10. California’s Ongoing Wildfire Insurance Challenge
While homeowners are learning how to navigate claims more efficiently, California’s insurance market is still struggling to adapt to the scale of wildfire losses.
More than 350,000 homeowners are now insured through the California FAIR Plan, a number that’s tripled since 2018. FAIR Plan coverage offers basic fire protection, but limited liability and no theft or water damage unless supplemented by a “Difference in Conditions” policy.
State regulators continue to explore long-term solutions, from catastrophe modeling reforms to faster rate approvals, hoping to stabilize the market and bring private insurers back into high-risk areas.
Conclusion: From Panic to Preparedness
Wildfires will remain part of California’s landscape—but financial ruin doesn’t have to be. The insurance system, while imperfect, still provides the safety net most families depend on after disaster strikes.
Susman’s final message to homeowners is one of calm preparedness:
“Worry when it’s time to worry. If you have an insurance policy, now’s the time to use it. Work with your company, document everything, and trust the process.”
When handled strategically, an insurance claim isn’t just about recovery—it’s about rebuilding stronger, smarter, and more resilient for the next challenge ahead.
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