Fire losses can devastate your home and personal possessions, and seriously disrupt lives. In California, given the dry weather and prevalence of wildfires, fire losses are a serious threat to many property owners.
California law in Insurance Code §2071 provides minimum standards for fire insurance coverage. It requires coverage for fire losses “to the extent of the actual cash value of the property at the time of loss,” up to policy limits. Actual cash value under California law means the fair market value of the damaged property. (Jefferson Ins. Co. v. Superior Court (1970) 3 Cal.3d 398, 402.) Thus, every homeowner and property owner with property insurance coverage should have at least this level of fire insurance coverage.
Fires can cause extensive damages. There is the direct damage from the burning and charring of the structure from the fire, which if bad enough can affect the structural integrity of the home and require a tear down. There is also smoke damage from the permeation of the smoke into the walls, insulation, carpet, HVAC system, etc., which can be extremely difficult to remediate. There is likely water damage from the efforts to put out the fire. Finally, mold may can begin to grow within 48 hours if a property is not dried out. Fire damage requires immediate attention.
Making a fire claim poses unique challenges. It is heavily dependent on experts to determine the proper repairs, including potentially engineers, contractors, smoke and water damage remediators. Making an accurate and comprehensive inventory of the contents, which is often charred or completely destroyed, can be a difficult task following a loss. Cause and origin experts are often needed to determine the cause of the fire, and become particularly important if the insurer is pursuing suspicions of arson. All of this can make a pursuing a fire insurance claim, where either the scope or basis of the claim is being contested by the insurance company, an expensive proposition.
Coverage issues can arise with respect to smoke and mold damage, both of which may have exclusions of limits which the insurance company claims apply. If the insurance company suspects arson, it may deny the entire claim based on fraud. It is a risky strategy for an insurance company to accuse its insured or arson, however, because unjust accusations of arson or fraud are a basis for bad faith liability. Even where coverage is accepted, the cost to repair the structure, the value of personal property, and the additional living expenses for time out of the house, can often be the subject of hot dispute.
Fire insurance policies contain specific requirements for insureds, including providing proof of loss and submitting to an examination under oath if requested by the insurance company. These can be difficult or complicated conditions to comply with, and may require an insured to seek assistance or counsel.
If you have suffered a fire loss and have an insurance claim that you would like to discuss, please contact or call for a free consultation.