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Wildfire Damage: How to Cope with Loss and Prepare for Disaster

Homeowners in California’s Wine Country impacted by destructive wildfires are just beginning to comprehend the devastation as they start to navigate the process of fixing or rebuilding their damaged property. The process of dealing with insurance companies following a wildfire can be emotionally taxing, and even more so if you encounter denial of coverage by an insurance company that looks for ways to escape its obligation to investigate or pay you for a claim.

For those who are picking up the pieces, you’ll want to contact your insurance company as soon as possible and make a wildfire claim. An insurance adjuster may do an onsite visit to assess the damage. You’ll want to document evidence through photographs or video. Writ down a home inventory list that you can provide your insurer along with a “proof of loss” form which included a description of damaged or destroyed items.


If you have never experienced the challenge of an evacuation, relocation, and rebuilding after a wildfire, the recent fires in Santa Rosa and Anaheim are an important wakeup call for homeowners who may not realize they are underinsured when it comes to fire insurance. Policyholders or consumers need to make sure they have enough insurance to cover the cost of rebuilding their home. One of the biggest mistakes is that homeowners purchase an insurance policy, and 20 years later, they have the same policy with the same limit. Here are some important tips to prepare for the next wildfire

  • Ask your broker to make a determination whether or not they have enough insurance to build your home back exactly the way it is today.
  • Contact contractors to find out how much per square foot it would cost to rebuild your home exactly as is and then go to the tax roll and determine how many square feet you have and multiply it by that number.
  • Buy extended replacement cost coverage because that can cover you in case you don’t have enough insurance to completely rebuild your home.
  • Updating coverage is the policyholder’s obligation and it is not the insurance company’s responsibility to warn you if you are underinsured. 

In California, we have what is known as the breach of the implied covenant of good faith and fair dealing because an insurance policy is a unique contract. It’s unique because after a loss, you can’t go out and replace that insurance policy. If you have an insurance policy with State Farm, for example, and your home burns down, State farm will pay it. You can’t go across the street and buy a policy from Farmers to cover your house that already burned down. Because of the special nature of the relationship between an insurance company and its policyholders, the law says that there can be the breach of the implied covenant or there can be insurance bad faith. When there is insurance bad faith, there are other damages. Some examples of insurance bad faith include unwarranted denial of coverage, failure to communicate critical information to the policyholder, refusal to pay the claim without investigating or failure to deny or pay the claim within a reasonable period of time.

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If you or someone you know has been affected by the California wildfires and would like to know more about what action to take, contact a KBK lawyer.

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