What to Do if Your House is Destroyed by a California Wildfire

In their April 2021 article for CNN, Mallika Kallingal and Alexandra Meeks noted that “California had its worst wildfire season ever last year.” Nearly 4.4 million acres burned in the state during the 2020 fire season, starting earlier and ending later than in years passed. Over ten thousand buildings were destroyed, more than thirty people were killed and twelve billion dollars of the state’s economy were lost. In 2021, experts are expecting an even more severe season. Kallingal and Meeks wrote in their April article that “91% of the state is suffering from drought,” leaving brush dry and hazardous across California. Researchers recently declared that more communities in our state than ever before are currently facing significant fire risk. Sadly, damaged or destroyed homes are a reality of living in these zones. When loss or damage occurs, homeowners must decide whether to rebuild or relocate. Despite some risk, homeowners often choose to rebuild on their property. Working with the right design-build firm can help homeowners harden their new homes against future fires, protecting their investment and their families. Follow below to learn more about what to do if your house is destroyed by a California wildfire. We will cover everything from applying for FEMA aid to determining whether you should rebuild or relocate. 

California Could See Record Fire Season in 2021 Due to Drought and Dry Fuel

On 10 May 2021, Governor Gavin Newsom extended his drought emergency declaration to most of California’s fifty-eight counties. Axios’ Rebecca Falconer writes that Gov. Newsom’s declaration of drought emergency now covers forty-one California counties, affecting “30% of California's population, or almost 40 million people.” California’s wildfire-prone regions are expected to suffer even more this year than over the last couple years. This is because of the severity of the newly announced drought and the enormous amount of fuel available to burn. Writing for The LA Times, Alex Wigglesworth notes that it is "almost a given that California will see another historic fire season” in 2021. 

Quoting UCLA professor and bioclimatologist Park Williams, Wigglesworth writes that “‘dryness typically predicts a very active summer fire season in Western U.S. forests.’” Professor James Randerson of UCI tells Wigglesworth that there might actually be fewer fires this year. This could be because of the ways in which fires start during dry seasons. However, the few fires that do start in drought-stricken regions of California “tend to grow larger and escape human control more quickly.” With lots of dry fuel, fires easily and rapidly spiral “out of containment.”

More Communities Will Face Increased Fire Risk Year Over Year in California

Climate change is contributing to longer burn seasons in California year over year. As such, homeowners must come to grips with the likelihood that risk areas might expand. Wigglesworth references a UCI research study published in April 2021 in the Scientific Reports journal by Nature Research. He notes that UCI researchers found that “the number of communities facing severe fire risk has grown significantly in recent years.” They credit this to “both hotter, drier conditions and an uptick in humans living in previously unpopulated wildland areas.”

Six Steps to Take After Losing Your Home to a Wildfire in California

#1 Understand Your Rights Under Your Homeowners Insurance Plan

Before reentering your home or filing a claim with your insurance company, go through your plan. Ensure you fully understand the terms laid out in your plan and how these will apply to your loss. The post “Top Ten Tips for Wildfire Claimants” from the California Department of Insurance elaborates. CDI recommends that homeowners first “obtain a complete copy of [their] residential homeowner's insurance policy." This should include the declarations page of their policy. According to the CDI, insurance companies are required by law to provide homeowners with this document for free within thirty days after the request. Homeowners should focus on three primary elements of their policy. These include how much coverage they have to rebuild or repair, to replace their belongings and to cover living expenses. Never be afraid to ask questions to fully understand your rights as a claimant and as a policyholder in California. 

Check the Fine Print

In her article for CNBC, CFP Darla Mercado recommends that homeowners define the limits of their coverage. They should prepare to file for additional aid if needed. Mercado explains that per their individual policies, homeowners might have to front the bill for additional living expenses -- only to be reimbursed later on. However, other homeowners might “be entitled to money up-front for these costs.” Homeowners should also check the fine print of how much an insurer is willing to pay out to replace the home. Darla Mercado writes that a policy "that covers the ‘replacement cost’ of your home will only cover certain builds." They will "pay out the cost of replacing your damaged home with a similar dwelling in the current market.” Directly after a disaster, materials and labor costs are often higher than in typical times. This makes the cost to replace your home more than the valuation applied by the insurer. Such a situation could place the homeowner on the hook for extra expenses.

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Be Prepared for Disagreements

Homeowners should also prepare themselves for some push-back from their insurer -- particularly if they own a high-value home. In her article “Rebuilding Your Home After a Disaster” for The NYT, Ronda Kaysen writes that insurers are often reluctant to pay up. Quoting Jeff Blyskal from Consumer Reports, Kaysen elaborates. She writes that “‘the bigger the claim, the more likely you’re going to run into more resistance from the company.’” Referencing a 2014 report from Consumer Reports, Kaysen notes that those who filed more expensive claims were likely to disagree with the insurer’s valuation. The survey found that of those “who filed claims for $30,000 or more, 41 percent reported complaints." The complaints included "disagreements over damages or coverage, delays or slow payouts.” Understanding one’s insurance policy before filing a claim helps combat disagreements that might arise. It might also make a homeowner eligible to receive an advance on their claim to aid with expenses before the adjuster can inspect. 

#2 Start Tracking Expenses Right Away

No matter how minimal the expense, homeowners should track every cost incurred immediately following “loss of use.” Homeowners should keep all receipts -- both in paper form and digitized -- related to lodging, clothing, meals and medical care. They should also record costs for replacing important documents like passports, savings bonds, birth certificates and deeds. Apps like Evernote and Mint can help homeowners both keep track of and share expenses without too much hassle. In his article “The Best Apps for Managing Receipts in 2021” for The Bench, Nick Zarzycki recommends Receipt Bank. Zarzycki prefers the app for its ability to scan paper receipts and load that information into a database. Forceipt is another great option for expense tracking because it also offers scanning and automatic extraction functions. Above all, homeowners should avoid relying on their memory for loss-related expenses.

Those who experience traumatic events -- like the loss of a home -- can be disoriented for long periods of time. This can make them unable to recall events properly or record new memories effectively. According to the National Institute for the Clinical Application of Behavioral Medicine, “trauma can shut down episodic memory and fragment the sequence of events.” Homeowners who have just experienced the loss of their home and displacement of their family may experience brain fog. They may also experience other impairments due to the trauma. As such, writing down as many details of each expense as possible at the time each expense is incurred is vital. This helps prevent issues with the insurance company in the future. In addition to documenting expenses, homeowners should be sure to record all communication with their insurance company and adjuster before and after filing.

#3 Return Home to Assess the Damage Once it is Declared Safe to Do So by the Fire Department

If possible, homeowners should try to assess the damage to their home before an insurance adjuster arrives. According to Consumer Reports, this is because “‘the more you can document your property losses before the adjuster arrives, the faster the claims-filing process.’” However, homeowners should never return home until they have checked with local officials about the safety of doing so. Upon returning home, Cal Fire recommends looking around for any potential dangers officials might have missed. 

Look for any remaining sparks or embers in the surrounding landscape. If the home is still standing, turn off all appliances and keep the power off until you have left the home. Document everything you see with photos and notes. For more robust instructions about how to assess your home after damage or loss from a wildfire, read ReadyForWildfire.org’s “After Wildfire” guide. 

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#4 File a Claim with Your Insurance Company

Next, homeowners should file a claim with their insurance company -- preferably with their local agent. In the article “How to File a Homeowners Insurance Claim After a Fire” for Consumer Reports, Tobie Stanger offers advice. Stanger writes that “the first step is to get in touch with your insurer or the agent who sold you the homeowners insurance.” After you contact your insurer, the company will provide an adjuster. The adjuster will travel to your home and “assess the damage” before submitting an estimate for the company to review. Their assessment will determine the value of your home and the compensation you are qualified to receive per the terms of your policy. 

When dealing with an adjuster, Stanger suggests first verifying his or her identity because scammers often prey upon victims post-disaster. If the adjuster’s estimates do not match what you expected, seek out additional estimates from an independent contractor. The adjuster assigned to your case might not be familiar with the value of custom additions or other elements of your particular home. 

#5 Apply for Additional Assistance if Needed

Even if you have a fairly robust homeowners insurance policy, you still might need additional financial assistance. For instance, if you live in a community that was severely damaged, it might take a while to process the claim. Ron Nixon explained in his 2018 article “What FEMA Is Doing, and Not Doing, in Response to California’s Fires” for The New York Times. He noted that state and local governments must function as first responders in the event of a disaster. In order to receive federal help from FEMA, the governor of California must request aid for a community. He must also “indicate the amount of federal resources needed to respond to the disaster.” 

Next, the president will invoke the “Individual Assistance” category of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. If he or she does so, homeowners can apply for help from FEMA. According to the Sonoma County resource “FEMA Disaster Assistance,” assistance from FEMA “may be able to fill insurance gaps." It could also "provide help if you’ve been waiting more than 30 days on a homeowner’s claim.” FEMA may be able to help homeowners fill gaps, but only after they have filed a claim. They must either have received no answer or too little compensation. 

How to Receive FEMA Aid

To receive aid from the IHP -- FEMA and EPR’s Individuals and Households Program --, homeowners must register and establish their eligibility for aid. This aid covers damage or loss that is not covered by an existing insurance policy. Homeowners can learn more about the IHP by reading FEMA’s “Guide to the Disaster Declaration Process and Federal Disaster Assistance.”

When to Apply for FEMA Aid

After last year’s wildfires, Audrey Garces explained how to apply for FEMA assistance in an article for KQED. Garces noted that in order “to apply for disaster-related assistance through FEMA, it’s important to return to your home." You must return "as soon as Cal Fire and law enforcement officials say it's safe to do so.” Quoting FEMA spokesperson Frank Mansell, Garces explained that homeowners must “document the damage and file any insurance claims as quickly as possible.” 

This is because “most of FEMA’s activities can’t take place until insurance claims have been filed.” Thankfully, “insurance companies may be able to provide funds for living expenses in the meantime” as homeowners wait to hear back from FEMA. Even after you have received money from your insurance company, you can still apply for FEMA assistance if unmet needs remain.

#6 Decide Whether You Want to Rebuild or Relocate

Deciding whether to rebuild or relocate can be a complex -- and often frustrating -- process. Homeowners who still owe a mortgage on their home might be unable to take a cash payment from their insurance company. However, when the homeowner does not owe on a mortgage, the insurance company pays the entire settlement amount directly to the owner. As such, if the homeowner prefers to move on after a total loss and purchase a home elsewhere, they can do so. Those who choose to cash out rather than rebuild will likely receive a lesser settlement amount than they otherwise would. When deciding whether to rebuild or relocate, homeowners should consider continuing -- or increasing -- risk of disaster recurrence. They should also consider how long it will take to rebuild their home and how much will be covered by their policy. 

Should I Buy or Rebuild?

As mentioned above, homeowners who are trying to decide whether to buy or rebuild should consider a number of factors. They should consider the risk of recurrence, think about how their community will recover and account for all costs the build will incur. These costs not only include designing and building the new home, but also cleaning up debris and repairing well systems, sewer access and more. 

Consider Risk of Recurrence

When considering risk of recurrence, homeowners should keep in mind that California’s drought conditions and our changing climate are both major players. The number of communities at severe risk of fire damage is increasing in the state and mitigation of risk is not well-understood. An Associated Press article published by KTLA5 quotes VP of State Government Relations at APCIA Mark Sektnan. Sektnan notes that “unlike hurricane and earthquake mitigation, the science of wildfire mitigation is far more complex and still developing.” He explains that “we understand what steps need to be taken." However, "we do not yet have a quantifiable understanding of the impact these risk reduction efforts will have.” 

Think About How the Community Will Recover

Next, the homeowner should consider how their community will recover from damage wrought by the wildfire that destroyed his or her home. It is likely that other homes, businesses and infrastructure were either damaged or destroyed by the disaster. Years could pass before all infrastructure has been rebuilt and the local economy has recovered. In a July 2019 article for the Center for American Progress, Ryan Richards explained. He noted that recovery challenges can be extreme in communities not hardened against disaster. Richards wrote that “in the absence of this resilience, natural events can be catastrophic." In such situations, "communities may require years to restore limited functionality to critically important systems.”

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Take the Camp Fire in Paradise, California as an example. The 2018 disaster was the deadliest, most destructive and most expensive wildfire in the state’s history. Richards noted that “in Paradise, the path to rebuilding remain[ed] unclear a year after the Camp Fire.” Many homes were lost, buildings were destroyed and entire blocks were permanently abandoned. Infrastructure was massively affected too. In fact, “even the town’s water system has been compromised and may require hundreds of millions of dollars to replace.”

Prioritize Personal Safety Over Existing Local Laws

Homeowners should also consider safety over local laws. Christopher Flavelle explains in his article “Why Is California Rebuilding in Fire Country? Because You’re Paying for It” for Bloomberg Businessweek. Flavelle references the county of Sonoma, which began issuing rebuild permits shortly after the 2017 Tubbs Fire. He explains that “rather than strengthening building codes, the county...weakened rules." Officials chose to pass "temporary ordinances that let people expand their homes beyond their previous size and waiving development fees for new units.” Instead of relying on local ordinances to protect them, homeowners should seek expert builders who are beyond the curve. They should ensure that a local design-build firm has the tools and experience to rebuild their home to exceed current safety codes. The firm chosen by a homeowner to rebuild their home should look to the future. They should employ emerging technology to protect the property and its inhabitants. 

Navigating Loss Due to Wildfire with Element Homes

In our recent article “Preparing Your Home for the Next California Wildfire Season,” we explained how Element can help homeowners before and after disaster. One of Element Home’s staff members -- Amanda Leigh -- has years of experience navigating homeowners insurance claims. Over the last twelve years, Amanda has helped countless clients navigate the insurance industry, securing maximum payouts on their policies. Our entire staff understands the complexity involved in rebuilding California homes post-disaster and can help fire victims through every step of the rebuilding process. Element can help homeowners get relief from insurance companies, handle payments and secure housing in the interim. For more information, stay tuned for the next post in our series about dealing with California’s wildfires as a homeowner. We will discuss the costs of rebuilding a home and changing codes. Our article will also outline emerging technologies, what to do if you are underinsured and how to find the right design-build firm.

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