Eliminating Personal Property List Procedure? Sarah Arsone asked 4 weeks ago
Eliminating Personal Property List Procedure?

If a survivor of the 2025 Great Palisades Fire insured with State Farm declines to prepare a list of lost personal property due to psychological trauma associated with the task, what is the appropriate way to proceed with the claim?

State Farm has already advanced 60% of Coverage B (personal property). The insured has requested that State Farm waive the inventory requirement and instead treat the amount of insurance purchased as a stipulated value for personal property; however, State Farm has refused to waive the inventory requirement.

In this scenario, how would the approximately $200,000 already advanced be treated for federal and California state tax purposes?

1 Answers
John Trapani John Trapani Expert answered 4 weeks ago
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Hi Sarah,

As the L A fires were declared a federal disaster, if this home was the primary residence of the insured, all of the proceeds for contents “advance” or full payout are tax-free. The only limitation is that if the taxpayer wants to claim a casualty loss for the contents, the proceeds received for contents would have to be considered in the calculations.

UP has a tax information resouce page that you may find helpful.

John Trapani