We are in the midst of what might be one of the largest tragedies for Los Angeles in our lifetimes. The loss and pain are not only raw but growing day by day as the fires continue. It may seem too soon to think about rebuilding, but we must protect our future—our ability to rebuild—by reacting quickly.
1. Act Fast on Insurance Claims
After the 1994 Northridge earthquake, there were so many claims that some insurers went bankrupt. This current disaster is enormous, and we can expect some insurers to face significant challenges.
Insurance analysts, Dowling and Partners, estimate insured losses from the fires could exceed $25 billion—primarily from high-net-worth homeowners' claims. Most homeowner policies have been written by State Farm, Farmers, and the California Fair Plan. The California Fair Plan, the “insurer of last resort,” covers those in the most vulnerable areas (the “WUI” or “Wooie,” Wildland Urban Interface) where standard insurers won’t provide coverage.
The California Fair Plan has around $5 billion in coverage, suggesting losses will exceed the reinsurance coverage insurers use to spread their risk. Since the Fair Plan is a syndicate of commercial carriers writing coverage in the state, the failure of private insurers will likely lead to challenges for the Fair Plan as well. The state may step in, but this will delay the process.
Bottom Line: Get your agent to arrange for an adjuster from your insurance carrier to assess your property now. Call daily. Be the squeaky wheel. Be first in line. Get your settlement into your bank account ASAP before complications arise.
Note: Rebuilding costs will likely increase due to the inevitable surge in demand. Early payouts might not cover inflated costs, but at least you’ll have funds in the bank. I’ll post updates on this topic in the coming days.
2. Document Your Loss Thoroughly
Documentation before a loss is ideal, but most of us forget to do this. Thorough documentation now is just as critical.
Regardless of whether your house is a total loss or has only smoke damage:
Go through the house room by room, closet by closet, shelf by shelf.
Narrate a video detailing what was there, what is missing, and what has been contaminated.
Your claim may take time to settle, and you’ll likely need to demo or clean the property beforehand. Documentation is essential. Also, keep any and all receipts.
3. Demo/Debris Removal
Rains have eluded us so far this season, but they will come—and some could be heavy. If your house is a total or partial loss, it’s best to demolish what is destroyed and stabilize the site (e.g., sandbags) to reduce future damage.
Steps to Prepare for Demolition:
Obtain a demolition permit. This typically requires an asbestos report/survey.
If no asbestos is detected, a demo permit can be obtained easily.
If asbestos is detected, the report must be filed with AQMD (Air Quality Management District), which has a mandatory waiting period. AQMD may establish an emergency permitting process to reduce the wait time, but get in line early.
The asbestos survey will also be filed with Cal/OSHA, which usually has a shorter timeline. Your local municipality, county, or state may assist with testing but likely not removal.
The asbestos survey is reimbursed by your insurance company, so getting it done sooner will keep you ahead of the long lines to come.
Leaving damaged property exposed to the elements will result in greater cleanup costs later.
Prioritize your safety and health. We will continue to provide information on wellness and rebuilding as we move forward. The fires will eventually be extinguished, but this is a major disaster.
Many people have lost everything, and countless others are displaced—including some of our own employees. This will be a difficult period that will define us as a community. Let’s work together with compassion, grace, and love.
