A Guide to Navigating the Insurance Claim Process
As a firm based in Los Angeles, several Quantum clients, friends and loved ones are impacted by the devastating fires which began on January 7th. It is an incredibly challenging time and we want to extend our sympathy and support to all those affected, and express our deep gratitude to the heroic firefighters combatting this historic and devastating fire.
We know that insurance claims can be difficult to manage, and so we have prepared this brief guide to help you navigate conversations with your insurance company. We will continue to update this guide as we receive helpful information.
Whether you're dealing with property damage, medical claims, or auto insurance, understanding how to manage your claim effectively can make a significant difference in the outcome. This guide will walk you through the essential steps and provide valuable resources to help you through the process.
UPDATE: The news reported that displaced clients may have been denied FEMA loans erroneously. This was apparently caused by a glitch in the system, which denied anyone holding insurance policies from qualifying. That was a mistake. They will be notified re: whether they need to reapply or not. You can apply for assistance at FEMA - California Wildfires or by calling 800-621-3362.
Document Everything from Day One
The moment an incident occurs, documentation becomes your most powerful tool:
Take extensive photos and videos of all damage and debris before any repairs or cleanup take place. If this is difficult for you to do, consider asking a friend or family member to help.
Take a screenshot of any evacuation orders.
Keep a detailed log of all conversations with insurance representatives, including dates, names, and key points discussed.
Save all receipts related to immediate repairs, temporary housing, or other expenses.
Consider using one credit card for all related expenses to simplify record-keeping.
Create a comprehensive inventory of damaged items, including estimated values and, when possible, original receipts.
Know Your Rights and Policy Coverage
Insurance policies can be complex, but understanding your coverage is crucial. Take time to:
Carefully review your policy, particularly the declarations page, loss of use benefits and coverage limits.
For loss of use benefits ask your agent or insurance company about the fair rental value (FRV) and additional living expenses allowed (ALE), length of coverage (typical loss of use is 24-36 months). Examples of ALE that could be covered by Loss of Use include: hotels, food, transportation, utilities, storage, pet boarding, laundry.
If you do not have access to a copy of your policy, contact your insurance agent or company and they will provide it to you.
Identify specific deadlines for filing claims and submitting documentation.
Understand your right to choose repair contractors and replacement options. For example, you can choose to rebuild in another location and still receive full replacement cost benefits.
Consider using a third party appraiser to assess damage in a partial loss situation.
Don’t let insurance company adjusters rush you into a quick settlement. The check they are offering may seem like a lot of money but could be far below what you are entitled to recover. It takes time to calculate what the insurance company owes you after a large loss.
Read all checks and drafts on both sides before depositing or cashing them. Don’t accept any checks with words like “full” or “final” “settlement” printed on them.
Consider contacting an experienced attorney for advice before signing any “release” or “waiver” forms. Your policy does not require you to sign away any legal rights in order to get paid fairly for a covered loss.
Working with Insurance Adjusters
Your interaction with the insurance adjuster is critical to your claim's success:
Request credentials and contact information from any adjuster who contacts you. (Be wary of out-of-state appraisers or contractors)
Take detailed notes during the adjuster's inspection.
Don't accept the first offer if it seems insufficient. Ask for the best way to claim coverage benefits.
Consider hiring a public adjuster for complex or large claims. While they charge a fee, they may be able to achieve better claim outcomes.
Get your own independent estimates for repairs.
Request all options available such as rebuilding, receiving a check and moving on.
Valuable Resources for Policyholders
Several organizations provide free or low-cost assistance to insurance consumers:
United Policyholders (uphelp.org) offers:
Step-by-step claim guidance and tips
Disaster recovery help
Free webinars and workshops
State Insurance Commissioners' offices can:
Provide consumer protection information.
Help resolve disputes with insurance companies.
Offer guides specific to your state's insurance laws.
If your property is impacted, you may also be able to receive additional short term benefits such as:
Property Tax Reassessment – Contact your local county assessor’s office to inquire about disaster related tax relief options, eligibility and documentation requirements, and filing deadlines as assessed property values may be reduced during periods of Governor proclaimed disasters.
Mortgage Forbearance - Contact your bank to see if you are eligible for forbearance options that allow you to temporarily suspend or reduce your mortgage payments. It is important to understand the key terms and conditions of the modification such as interest accrual, timing and structure of repayment options, and any impact to your credit score.
Common Pitfalls to Avoid
Watch out for these common mistakes during the claims process:
Waiting too long to file your claim.
Accepting a settlement too quickly without full understanding of damages.
Failing to maintain adequate documentation.
Not reading settlement documents carefully before signing.
Making permanent repairs before the insurance company's inspection.
It is unfortunate, but disasters bring out opportunistic scammers. Deal only with licensed contractors.
Professional Help: When to Seek It
Consider professional assistance if:
Your claim is large or complex.
You're not confident in handling negotiations.
The insurance company is delaying or denying your claim.
You need help documenting extensive losses.
Options include:
Insurance attorneys (usually work on contingency)
Construction consultants for complex property damage
Stay Organized and Persistent
Success in the claims process often comes down to organization and follow-through:
Create a dedicated claim file with all relevant documents.
Keep copies of everything you submit.
Follow up regularly on your claim's status.
Document all communication in writing when possible.
Set reminders for important deadlines.
Conclusion
Managing an insurance claim requires patience, attention to detail, and persistence. While the process can be challenging, understanding your rights and having access to the right resources can help you achieve a fair settlement. Remember that organizations like United Policyholders are available to provide guidance and support throughout your claim journey.
Remember: Your insurance policy is a contract, and you have the right to receive the benefits you've paid for. Don't hesitate to advocate for yourself and seek help when needed.
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