Northern California Fire Loss: Insurance FAQs
FAQ & What We Do
Below are answers to frequently asked questions designed to help our neighbors who have been devastated by these fires. We are San Francisco personal injury attorneys whose families and friends have lost their homes in these fires. We also have decades of experience dealing with insurance carriers, and want to provide pro bono (free) guidance to those who want to understand their insurance rights. Please feel free to use the information below, and also to call or email us for a free review of a particular homeowner’s policy. There are no strings attached, and no contracts or fees required. If you want to speak with a lawyer about your homeowners’ policy, call (415) 889-2919 and state that you are seeking pro bono advice on your fire insurance benefits.
For those who want to know whether PG&E is at fault for causing the fires, whether there will be lawsuits, and how that works, the short answer is that we expect there is likely to be a finding of fault against PG&E, given our experience in prior PG&E cases, and given the pole engineering requirements established by CPUC General Order 95. We are actively investigating PG&E’s potential liability. However, that is not the subject of this page. For those seeking more information on PG&E liability issues, you can contact one of our lawyers at (415) 889-2919.
FREQUENTLY ASKED QUESTIONS
Are there timing issues I need to be aware of?
Yes. You should make a claim under your insurance policy as soon as possible in order to comply with your policy’s notice requirements. You should also cooperate with your insurance agent, and check in with them to make sure you are aware of all applicable deadlines. Most policies require the insured to notify the insurer “as soon as practicable” after the loss.
Once you have notified your insurance carrier of the claim they will issue a form for you to itemize the personal property you have lost, and provide supporting documentation. This “proof of loss” form is typically due within 60 days. Itemizing losses can be very difficult in the case of a fire, but it is important to start right away to maximize your benefits. Your insurance agent can be a helpful resource in answering questions about what types of documentation are required. See below for more detail.
Most policies also give the insurer the right to conduct an examination (or multiple examinations) under oath, and to request records from you.
Even though you may be reeling from the harm this fire has caused, these first couple of months are an important time to enlist help from family and friends to recall and prove the items you lost so that you are not short changed.
What are the different types of coverage I am entitled to in my homeowner’s (fire insurance) policy?
A typical homeowners’ (fire insurance) policy provides four property loss coverages:
Coverage A: Dwelling (insures the residence)
Coverage B: Other Structures (workshops, detached garages, etc.)
Coverage C: Personal Property (items within your home, in your car, on your property, and in other structures)
Coverage D: Loss of Use (includes ALE [additional living expenses] and Fair Rental Value for residences that were used as rental properties)
How much should fire insurance pay for my home?
At a minimum, a fire insurance policy should cover a home’s “Actual Cash Value.” Where a home is a total loss, this requires payment of the policy limit (Coverage A) or the fair market value of the home, whichever is less. If the home is a partial loss, this should cover the amount it would cost to repair, rebuild, or replace, minus a deduction for physical depreciation. (See Ins. Code Sec. 2051).
Actual cash value (fair market value) will not be enough money to rebuild a home. That’s because a rebuilt home is brand new, whereas the existing home probably had some wear and tear and depreciation. A homeowner should receive the actual cash value of the home regardless of whether the homeowner chooses to rebuild.
Most policies also include replacement cost coverage. Under a replacement cost policy, insurance covers the amount it would cost the insured to repair, rebuild, or replace the property without any deduction for depreciation (Ins. Code Sec. 2051.5(a)).
There are three types of Replacement Cost Coverage: (1) Guaranteed Replacement Cost (not limited by any policy limits), (2) Extended Replacement Cost (limited by stated policy limits + stated percentage increase, or increases), and (3) Replacement Cost (limited by stated policy limits).
Most policies are written with Extended Replacement Cost coverage. Your policy and Declarations Page may state a percentage or percentages that you can use to increase (or extend) your insurance coverage. This is typically 10% – 50%. For example, if you have a $500,000 policy limit, with a 50% extension ($250,000), your policy will provide up to $750,000 to pay for rebuilding your home.
What are my insurance carrier’s obligations?
Your insurance carrier owes you a fiduciary duty to act in good faith and to treat your interests as equal to (or more important than) its own. Also, courts will interpret the insurance policy language “against the drafter” (meaning against the insurance carrier and in your favor, in the case of ambiguity).
Additionally, there are Insurance Code statutes that provide minimum standards any policy of fire insurance needs to meet.
Every insurer must, within 40 days of a receiving a claim, deny or accept it, in whole or in part. It must do so in writing, and give the basis for any denial. If it needs more than 40 days, it must let you know why and provide written notice every 30 days thereafter. Finally, the carrier has to let you know, at least 60 days prior to a deadline, of any statute of limitation or other deadline the insurer may rely on to deny a claim. (Standards for Prompt, Fair and Equitable Settlements (10 Calif. Code Reg. Sec. 2695.7 (b)-(f)).
You should not be required to sign any releases or waivers in order to receive money under your policy. Be suspicious of any requirements imposed by your carrier.
What if I am underinsured, or am not getting enough money to cover my losses?
California fire victims have often been very underinsured. Insurance agents and brokers have a responsibility to provide accurate information in their dealings with you, and their failure to do so may lead to liability. For example, if your insurance limits were lowered, or your policy was changed from a guaranteed policy to an extended coverage policy without adequate notice to you, you may be able to revert back to a guaranteed policy. (See Ins. Code Sec. 678(a)(1)(A) requiring that the insured be notified of any “reduction of limits or elimination of coverage.”)
If you suspect your carrier is trying to low ball you on the benefits available under your policy, or delay payment of the benefits, you should not accept this without questioning it. You should discuss your benefits with a lawyer.
Most homeowner’s policies contain an appraisal clause, allowing the insurer to demand appraisal to determine the amount of a loss. (See Cal. Ins. Code Sec. 2071: In the event of a government-declared disaster, the insured has a right to demand appraisal.)
Does Fire Insurance Cover Physical or Emotional Injury or Wrongful Death Claims?
Fire insurance does not cover or pay for burns, physical injury, emotional distress or wrongful death. For families who have sustained these losses, retaining a lawyer is key. A respected and experienced personal injury law firm who practices in Sonoma or Napa Counties is key if you have suffered these types of losses. We urge you to speak to a current or retired judge, your family attorney or people you trust regarding the history, track record and success of the Walkup Law Firm. Do not be fooled by out-of-town advertising lawyers who seek your trust.
I Have Insurance – Do I Need A Lawyer?
For most of our clients fire insurance will be inadequate to fully compensate for your losses. Fire insurance has limits and conditions. Your available policy limits may be inadequate to rebuild. Not all policies include code upgrade coverage which increases the cost of any rebuilding. Some victims want to rebuild in other states or cities. Contents coverage often does not cover treasured items of family history. Many policies exclude or place significant limits on personal property, including jewelry and art. All policies restrict recovery for replacing landscaping, trees, shrubs and irrigation systems. Many policies exclude coverage for home businesses that sustain financial losses. For rural victims, their existing water systems and septic systems may require upgrades not covered under their policies, making rebuilding even more difficult. Expenses for temporary substitute housing are insufficient in many policies to cover a rebuilding timeline longer than one year.
While not all victims may elect to hire a lawyer, before making that determination you should consult with the Walkup Law Firm to know your rights so you can make an intelligent choice. We are also committed to helping fire victims who have insurance, but whose insurance companies are unwilling to deal fairly with them.