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Wildfires can expose issues across all areas of property claims, from small claims due to smoke damage to total loss claims where everything is lost. These claims are complex, difficult, and emotional. Every primary coverage will be addressed in total loss claims (building, contents, other structures, and Additional Living Expenses) along with many supplemental coverages and endorsements. Unfortunately, it's after events like these that Tugboat often sees unneighborly behavior from insurance companies. To help you navigate these challenging claims, here are some essential tips:
1. Keep Meticulous Notes
Get a fresh notebook or use a digital notepad to document every conversation with insurance personnel, contractors, neighbors, or anyone involved. This will help you keep track of important information and ensure nothing is overlooked.
Key Points to Note:
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Date and time of the conversation
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Names and roles of individuals involved
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Summary of the discussion and any promises made
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Follow-up actions required
2. Don’t Assume You’ll Get Paid the Policy Limit
Even if everything is lost, insurance companies often seek to limit their responsibility. They may contest your claim to minimize their payout.
What You Can Do:
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Understand your policy limits and coverage
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Be prepared for negotiations and possible disputes with your insurer
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Seek professional help, like a public adjuster or attorney, if needed
3. Request Full Limits in Writing, Especially for Contents
Insurance companies will ask for a detailed inventory list, which can be overwhelming when everything is gone.
Tips for Managing This:
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Request full limits for contents coverage in writing
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Refer to resources like the United Policyholders' Disaster Recovery Handbook for guidance
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Ask your insurance company if you can provide more general descriptions in categories (e.g., 20 men's jeans, 30 t-shirts) instead of itemized lists
4. Work Only with Experienced Fire Restoration Vendors
Fire restoration comes with unique challenges that require specialized expertise.
When Selecting Vendors:
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Ensure they have extensive experience in fire restoration
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Check references and reviews
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Verify their credentials and certifications
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Discuss your specific needs and expectations upfront
5. Prepare for a Long Process
If you have experienced a total loss, understand that these claims take time. The cleanup process is prolonged even before the rebuild begins. The entire process is emotionally taxing.
Coping Strategies:
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Stay organized and keep detailed records
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Maintain communication with your insurer and contractors
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Lean on support from friends, family, and community resources
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Take care of your mental and emotional well-being
Which coverage gaps show up after a total loss?
Every homeowners policy is built from the same standard coverage parts: dwelling coverage for the house, other structures for what is not attached to it, personal property for your belongings, and loss of use for the living expenses you run up while you cannot live at home. In a total loss all of them are claimed at once, and the same shortfalls turn up fire after fire.
Dwelling coverage pays to rebuild or repair the home. Adjusters may provide low rebuild estimates that don't reflect the true cost of construction, often quoting far below the coverage limit. After a wildfire, rebuild costs typically increase due to higher demand for materials and labor, which widens the distance between what the rebuild actually costs and what the insurance company has offered to pay. It also matters which kind of coverage you bought: replacement cost policies cover the cost to replace damaged property with new items of similar quality, while actual cash value policies take depreciation into account, often resulting in lower payouts.
Personal property coverage replaces your belongings. Creating a detailed inventory list after a disaster can be overwhelming and emotionally taxing. Special limits on certain items, such as jewelry, electronics, and collectibles, can lead to significant underpayment if these items are not accurately documented or if their value exceeds the policy limits.
Other structures coverage applies to the things on your property that are not attached to the main house, such as sheds, fences, and detached garages. Coverage for these structures is typically a percentage of your dwelling coverage, which may be insufficient. Insurance companies also often underpay claims related to these structures, leaving homeowners to cover the shortfall out of pocket.
Additional Living Expenses cover the cost of living elsewhere while your home is being rebuilt or repaired, including hotel stays, restaurant meals, and other living expenses. In cases of total loss, displacement periods can be long, sometimes stretching into years. While the initial ALE coverage amount may seem high, it can deplete quickly, potentially leaving you without funds to cover continued housing expenses, so track your spending against the limit from the first month.
Other limits only become visible once you file. Some policies may exclude or limit coverage for smoke damage, leaving you to cover those repairs. Many policies have limited or no coverage for landscaping, trees, and other outdoor property, all of which are costly to replace on a burned lot. Underneath all of it sits plain underinsurance: post-disaster inflation and increased demand for construction services drive up rebuild costs, so the limits you chose years ago are the ones that decide how this claim ends.
What does ordinance or law coverage actually pay for?
Ordinance or law coverage pays the cost to bring your home up to current building codes during a rebuild, which can be significantly higher than simply restoring it to its previous state. California's residential property claims guide is blunt about the alternative: unless there is language in your policy covering the additional costs associated with code changes, you may incur non-reimbursable expenses to rebuild in compliance with present codes.
The coverage pays only the increase in cost between the original component and the code-required equivalent, including the labor difference, so when a 2x4 stud has to become a 2x6 to meet code, it pays that difference rather than the whole new stud. The default endorsement is typically 10 percent of your dwelling limit, with optional 25 percent and 50 percent increments that matter most on older homes, and some states expand this coverage during a declared emergency through specific endorsements. An extended replacement cost endorsement is a different thing again: it provides additional coverage above your policy limit, offering a safety net if rebuild costs exceed expectations, and it sits on top of your dwelling limit as a percentage overlay rather than replacing it. Ordinance or law and debris removal are scheduled separately from the dwelling limit, with their own limits and their own conditions, so neither one is an extension of it.
How do you close these gaps before the next fire?
None of this is fixable in the middle of a claim. Review your policy regularly so it keeps pace with changes in your home's value and construction costs, make sure the insured value reflects the current replacement cost rather than just the market value, and keep an up-to-date inventory of your personal belongings with photos and receipts where you have them. That review is also the moment to ask what your ordinance or law limit is and whether you carry an extended replacement cost endorsement. State regulators publish material for exactly this situation: California's Department of Insurance keeps a wildfire resources page with claim guides, a consumer hotline, and its tips for wildfire claimants.
It’s incredibly tragic that people are forced to navigate such a difficult process as an insurance claim after losing so much. Tugboat encourages you to advocate for everything you are owed and lean on whatever resources are available. If there is another disaster or wildfire topic you'd like covered, tell Tugboat, and if you have questions about your own claim, Tugboat is here to help.
