Even with insurance, being made whole takes work

Owners or renters of the homes destroyed or damaged in the fire that tore through a San Bruno neighborhood Thursday are staring at a long and challenging process to recoup their losses.
Getting paid the full amount they’re entitled to for their
dwellings, possessions and future expenses will require understanding
insurance better than most people care to, and very possibly securing
legal assistance, said Amy Bach, executive director of United
Policyholders, a San Francisco consumer rights group focused on educating the public about insurance.
She offers some tips for people who suffered losses:
Q: What steps should people whose homes were lost or damaged in the fire take to get reimbursed from their insurance companies?
A: One is you file a claim or
notify your agent that you had a loss. That starts the clock running on
all kinds of legal duties the insurance company has with regard to
investigating your loss and helping tally up what you need in order to
recover. Two is getting a complete, current copy of your policies. No.
3 is to get in the habit of taking notes of who you talk to and when.
You have to be more proactive than people realize. People are going
to have to deal with a steep learning curve ahead of them or they’re
going to end up getting less than they’re owed. If they can’t handle
it, we recommend hiring some help.
Q: Are there any precautions they need to
keep in mind before filing their claims, anything that could
inadvertently undermine their case?
A: We advise people to stick to
the facts. Don’t offer opinions about what might have caused it. You
have suffered a loss, and your focus should be on adding up your
damages, figuring out how much money it’s going to take to get back to
where you were.
Q: Do many policies have exclusions for situations like this?
A: I never say never in this day
and age. In the past five years, there has been what I call “exclusions
gone wild.” But I highly doubt that any insurance company is going to
claim that these losses are excluded.
Fire is not a cause of loss that has been excluded by the insurance
industry, like floods, earthquakes or mold, so there shouldn’t be any
Q: Will most policies cover other costs, like possessions and the expenses people incur while waiting for homes to be fixed?
A: Generally you get an advance on
both living expenses and contents right away to get you started. What
the insurance company will pay early on in the claim process will be
only cash value, then once you prove you’ve replaced things they’ll pay
you the full replacement cost.
Q: What kind of deductibles will people be looking at?
A: I’m expecting the deductibles
to be a non-issue. I’m expecting to see here $250 to $1,000
deductibles. This isn’t like earthquake insurance, where you get these
crazy 10 and 15 percent of the damage deductibles.
Q: If PG&E or some other party is found to be at fault here, what are the implications for policyholders?
A: It’s a backup source of
recovery for insurance gaps, and it will be the only compensation for
people who have lost a loved one or suffered emotional damages that you
can’t claim under your insurance. Our view is that the insurance
companies should make the policyholder whole, and then they can go
after the utility to recoup what they pay out.
But the issue will be: Did the insurance company really make them
whole? If they didn’t, the person doesn’t want to sign away any rights.
People will need legal advice to make sure they’ve gotten everything
they’re entitled to from their insurance and everything they’re
entitled to from whoever is found to be at fault for the fire.
Q: Will insurance companies be particularly
cautious in what they pay out, to guard against any possibility of
victims exaggerating claims?
A: The publicly traded companies
that have to answer to shareholders are definitely on payout lockdown
as much as possible. So for sure, I think that adjusters are on orders
to be extremely careful about what they pay, when and how.
Give your insurance company a chance to do the right thing, but
understand that a certain amount of work on your part is required if
you want to get a fair settlement.
More information
Visit the United Policyholders site at www.uphelp.org. Click on the “property damage claims” link under the “claim tips” category. Or e-mail info@uphelp.org to request a flash drive with advice and tools or a free copy of the organization’s book, “Disaster Recovery.”

E-mail James Temple at jtemple@sfchronicle.com.