This article is written in response to the wildfires in Los Angeles County.

I lost my home in the 1991 Oakland Firestorm. As such, my heart goes out to the residents of Los Angeles County whose homes were damaged or destroyed, to the firefighters and first responders who have risked and are risking their lives, as well as to the community, which will also experience the aftermath of such devastating fires. I am also an attorney who specializes in handling insurance claims for policyholders and had the stress and challenge of handling my own claim with my insurer, as well as assisting many other Oakland Firestorm and other survivors in subsequent years in handling their claims.

Those whose homes were damaged or destroyed in the recent fires will face many challenges in the coming days and months—temporary shelter, replacement of necessary items, disruption of their lives caused by having to relocate temporarily or permanently, and the repair and rebuilding of their lives and homes. I want to offer some professional, as well as personal, advice in the hope I can be of some assistance.

You probably have not read your homeowners' insurance policy. I am embarrassed to say that I had not read mine before the Oakland Firestorm, and I am, as they say, in the business. Do not be surprised when you attempt to read your policy if you have difficulty understanding it, despite recitations and claims of being written in “plain English” or “easy to read” format. Please keep in mind that even professionals do not agree on every reading and interpretation and no one is born with an innate understanding of insurance or how to pursue a personal insurance claim.

Your homeowners' policy likely provides a few basic coverages for your home, other structures, additional living expenses, contents-personal property, debris removal, and landscaping. Initially, you will want to focus on obtaining an advance from your insurer to cover immediate necessities, food, and lodging. Most insurers involved in a catastrophic loss situation will readily issue advances from your contents and additional living expense coverages, usually in the $25,000 range. Many insurers will set up local catastrophic loss centers to handle such requests and adjust claims. The easiest way to initiate communication with your insurer is to contact your insurance agent or broker.

Additional living expense coverage covers your expenses when you are dislocated from your residence as a result of it being rendered uninhabitable. A dollar limit or a time limit usually limits this coverage. Such coverage typically covers either your actual out-of-pocket expenses, such as increased meal costs, increased cost of commuting from a different location, cost of temporary residence, etc., or the reasonable rental value of your former residence. Most insureds opt for the latter method of determining their additional living expense coverage if offered in their policy, as it is simpler, less time-consuming to document, and usually yields a greater dollar recovery.

As time progresses, you will be required to document your personal property loss on an itemized basis. You likely have replacement cost coverage, which means you will be entitled to the cost of replacing lost items up to the limits shown in your policy upon proof of replacement. For items you do not immediately replace, the insurer usually will pay you the “actual cash” value until you do replace them or reach you policy limits, whichever comes first. To determine the actual cash value of an item, the insurer determines the replacement cost of the item and then depreciates it for use, age, or obsolescence. If you subsequently replace the item, you can send the insurer a copy of the receipt and receive the difference between what the insurer paid before for its actual cash value, and what you spent on replacing it. A frequently asked question is: what is the replacement cost of an item that is no longer made? You are entitled to replace such items, subject to your contents limits, with items of like kind and quality. Because you have been through a wildfire, the Department of Insurance will likely ask the involved insurers to advance 75% of your content limits without documentation. In the past, insurers have responded favorably to this request.

Eventually, you will be dealing with the cost of repairing or replacing your home. The first item you will likely have to deal with is debris removal. Almost all policies provide coverage for debris removal as either a percentage of the limits for the house or in addition to the limits for the replacement of your house. Many times, counties will provide debris removal programs. They will limit their debris removal reimbursement to whatever your insurer will provide without affecting other coverages, such as the coverage for the replacement of your home.

Next, the insurer and you will be working on determining the cost of rebuilding/replacing your former home. If you have replacement cost coverage, it will provide you with coverage for the replacement cost of your home up to some percentage over your stated policy limits. Such an increase in coverage is typically 125% of stated limits. Additionally, you will likely have coverage for other structures, such as detached garages, decks, and fences, with a separate coverage limit. You may also have coverage for necessary code upgrades, although such coverage will also have limits. Lastly, you will likely have coverage for landscaping. Even if you had native or natural landscaping, you are entitled to have it replaced, subject to the terms of your policy.

Policies that provide replacement cost coverage usually require you to replace the structure before you are fully compensated for the cost of replacing the structure. Although you are provided some monies on an actual cash value basis for your structure before its replacement, it is not usually sufficient to complete construction. This requirement can pose a significant challenge if you are financially incapable of fronting the monies necessary to complete your home and cannot secure a construction loan. However, most insurers will fund the cost of replacing a residence as the building progresses, subject to policy limits.

You may not wish to rebuild and decide to relocate instead. There are many considerations that go into such a decision, and it can only be made by you in the best interests of you and your family. By law in California, an insurer must allow you to replace your home elsewhere. However, the insurer does not need to pay you more than the lesser of your policy limits for replacing your home or the cost of replacing your home at its prior location. Consequently, before attempting to replace your home by purchasing a new one, you will want to determine the full replacement cost you are entitled to from your insurer. Also, be aware that there are time limits in policies for advising your insurer if you wish to rebuild your home. Suppose you decide to relocate and you have a mortgage. In that case, you will also have to pay off your mortgage, as your mortgage company has priority to the proceeds of your policy for rebuilding/replacing your home and other structures. If you decide to relocate and replace your home elsewhere, you will also retain the title of your lot and can sell it at a later date.

I was asked by many homeowners in the Oakland Firestorm and subsequent disasters whether they needed to hire an attorney. Most homeowners' insurance claims are resolved over a period of time through negotiation and with assistance from claims adjusters and contractors. Most claims adjusters are helpful and sympathetic to their insureds and will make every effort to guide you through the claims process. However, for most homeowners, their home and contents are their most significant and most important investments. Consequently, you may wish to consult with an attorney specializing in insurance matters to ensure you avail yourself of all benefits you are entitled to under your policy. Additionally, if you feel at any time your insurer is not fairly treating you, you should either consult with an insurance coverage attorney and/or seek assistance from the California Department of Insurance.

Personal Thoughts:

When the Oakland Firestorm destroyed my home, I had two daughters, Katy, who was 6, and Noelle, who was just shy of her 3rd birthday. My now-former husband and I were lawyers, and, heck, we were insurance coverage lawyers. We knew we could handle our claim and the situation. Within a week, we relocated our family into temporary housing and shortly thereafter entered into a contract to purchase a new home. We had no idea what lay ahead.

Replacing even the bare necessities is all-consuming and exhausting. We went shopping on both days of every weekend and almost every evening, buying replacement items, clothes, furniture, etc. I wanted to keep my oldest in her school and my youngest in her preschool, so I drove a long commute from our temporary housing every morning and evening. I was working on the claim or shopping when I wasn't driving or at work. My youngest cried every night and begged to go home. Even though we knew how to handle an insurance claim and were trained to handle it, it was physically and emotionally exhausting.

About a month after the fire, my oldest came home with a flyer inviting all firestorm survivors to a special day at Marine World hosted by the Oakland, Berkeley, and Piedmont fire departments. I indicated that we probably wouldn’t be able to go because we needed to shop for “stuff” for our soon-to-be new home. Within an hour, Katy had organized Noelle into a joint protest. They let their father and me have it. They told us we had become the “no fun” family. They were tired of not doing anything. They missed their friends, who now lived away from them, and they missed us. They were right!

From that day forward, we made sure that we had a family day every weekend. We went to the event at Marine World and reconnected with other relocated friends. Katy and Noelle got to play with their friends and have fun. We learned to be nicer to each other, that not everything had to get done on a certain schedule, and sometimes it was better if it didn’t get done at all, and that we had gotten the most important things out of the fire: ourselves.