Insurance May Speed, Delay Recovery For Evacuees

Oct 13, 2017

Tales of frantic escapes, towering flames, fear, loss and deliverance have the nation in awe of California’s ongoing wildfires.

Four days after the fires broke out, the situation remains frenetic. California Governor Jerry Brown summed up the urgency before a bill signing ceremony Thursday. “Some places are beginning to be contained, but the fires are burning, the winds can come up — they’re not as calm as we’d like them to be, and so, the next couple of days, very, very serious,” he said.

Evacuees face bewilderment, uncertainty, and dread. While damage assessment teams are only beginning their work, decisions made by residents’ months, if not years ago, may determine on how well and how soon North State residents can pick up the pieces.

Talk to any firefighter or survivor and you’re likely to hear how sudden and how erratic wind driven wildfire can be.

Jacob Hammond, an employee at Beale Air Force Base, knew he had little time to bug out. But living in a rental and lacking insurance, he says he probably took unnecessary risk by spending extra time gathering possessions

“We took more time evacuating than we probably should have, but I mean, I got all my firearms out of the house, all of our clothes, because just that would be very expensive,” he said.

Hundreds of North State residents, they may be left with a monumental task: salvaging possessions and finding ways to soldier on while rebuilding.

In many cases the level of arduousness ahead will depend on insurance coverage. Even for those lucky enough to have coverage, may find themselves less protected than they think.

Jeff Blyskal, an editor at Consumer Reports, which recently published a feature on filing home insurance claims after a fire, said some of the myriad choices when purchasing a policy are more than dry verbiage. Consider actual cash value versus replacement value.

“Actual cash value will pay you for the value of your home and the damaged items inside, less their depreciation, right, so like a car — you spend $30,000 on a car, but after you’ve driven it for two years and it’s only worth 20,000, right?” he said. “So we don’t recommend that. We recommend that you get replacement cost, which should cover the cost of repairing or replacing it. That may cost more to replace it now, especially in a big disaster like this where the prices of materials and labor rise naturally, because of so many homes needing to be repaired now.”

Of course, a replacement cost policy will cost more in premiums. How much more is difficult to answer. Dave Jones is the California’s elected insurance commissioner, who regulates the insurance industry.

“People need to understand that there’s a difference between the market value of their home and the replacement cost of their home,” he said. “Oftentimes, those two figures are different, and oftentimes the replacement cost is greater than the market cost.”

Jones said that there are too many variables to estimate the price difference between the two types of policies.

Other big considerations with home insurance are documentation and communication. Experts say you should provide insurers a detailed list of possessions to assure coverage, and keep receipts. Blyskal said if receipts are destroyed, photographs can prove a savior. Something to think about if you’ve escaped this latest round of wildfires.

“If your home is still fine now, you should make a list of the most important things and you should contact your insurance company and say, ‘Hey, we’ve got a $10,000 really big screen TV, or we’ve got these heirlooms, vases or artwork or whatever and make sure that the insurance company knows about those, now you’ll pay more for that, but at least it will be, it will be on the record that it’s covered,” Blyskal added.         

While insurers have to meet certain standards in California there are still variables said Insurance Commissioner Dave Jones.

“There are differences in price, there are differences in claims handling, although we do require the insurers to meet a baseline of requirements with regard to claims handling, so like anything, you need to shop around,” he said.

Jones had other caveats: be on the lookout for unscrupulous and unlicensed contractors and also imposters posing as insurance adjusters. Don’t sign anything without talking to your insurer.

“We see far too often folks come in to the wake of a fire and try to take advantage of people who are grieving over the loss of their homes or even worse, their loved ones, so we’ll be putting detectives in the field also, but we also urge consumers to be on the lookout. If it sounds too good to be true, it is too good to be true,” Jones added. 

Jones said those that run into problems or have complaints should contact the California Department of Insurance’s consumer hotline at 1-800-927-4357.  

According to the department, evacuees may be eligible for reimbursement of evacuation and relocation costs under their homeowners’ insurance policy, even if their homes were not damaged or destroyed. In many cases no deductible is required. Called “additional living expense,” the coverage typically covers food and housing costs, furniture rentals, relocation and storage, and extra transportation expenses. If power is cut, A.L.E. may also reimburse the cost of food lost in refrigerators and freezers. Policy provisions, including deductibles, vary by company, so consumers should check with their insurer about coverage, limits, and any other limitations and documentation requirements.

Yuba County officials said they plan to announce the location and hours of a Local Assistance Center for those affected by the fires, by the middle of next week.

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