Fire Insurance Claim: A Guide to Navigating the Claims Process

Fire is a constant threat to buildings, particularly in dry parts of Texas. Property owners must take great care when choosing insurance to make sure that they are covered in the event of a blaze. They must also properly file insurance paperwork if a fire does occur so they can receive the benefits they are entitled to.

If you own property, the following information will help you understand what to do after a building or house fire to make the claims process go as smoothly as possible.

Understanding Your Fire Insurance Policy

Most homeowner's insurance policies, known as HO-3 policies, offer some level of fire coverage for your dwelling, other structures on the property, personal property, personal liability, medical payments to guests, and loss of use.

Dwelling Coverage

Dwelling coverage is also known as Coverage A. It encompasses fire damage to the structure that you and your family occupy. On your policy documents, you will see a face amount of the policy, which is the maximum you will be paid if your home suffers complete and total destruction.

Other Structures

Other structures are included in Coverage B. These include any structure on your property that is not your dwelling, such as detached garages, sheds, and fences.

Personal Property

Coverage C is for damage to or loss of personal property. It includes the contents of your household, such as personal belongings owned and used by members of your family.

Additional Living Expenses

Additional living expenses are covered by Coverage D. They include necessary living expenses you may incur to maintain your standard of living while your house is unable to be occupied because of a covered loss.

Personal Liability

Personal liability is handled by Coverage E and covers liability that you might face for injuries or property damage suffered by tenants or guests.

Medical Expenses

Coverage F is for medical expenses that occur due to the fire and is paid out to injury victims regardless of legal liability.

When you have a good understanding of the nature and coverage of your insurance policy, you will be able to navigate the insurance claims process more adeptly and with less stress. With an experienced attorney helping you, you won't have to worry about anything but rebuilding and tending to your and your family's needs.

When Would Homeowners’ Insurance Not Cover Fire Damage?

Generally speaking, your homeowners' insurance policy will cover all instances of fire damage not purposefully caused by you or anyone else named in the policy. Intentional acts are not typically covered in homeowners' insurance policies.

It is important to note that two categories of perils exist with a homeowner's policy: open and named perils. Your house likely has open peril coverage, which means that it is covered for any type of damage, including fire and smoke, that is not specifically excluded in the policy.

In contrast, your personal property has been named peril coverage. Named perils are events that can damage your property, such as fire, explosions, hail, and other destructive events. If you have fire as a named peril for personal items, you can claim coverage for the loss of these items in a fire.

What to Do After a Fire

Fires are traumatic events that often cause panic and shock. However, if you are involved in a fire, you must overcome these feelings and take the following steps to mitigate the fire damage and help ensure that your claims process is successful.

1. Secure Your Property Against Further Damage

Homeowners' insurance policies typically require policyholders to take steps to prevent further damage to a structure during or after a fire. Such steps typically include calling the fire department. They may also include boarding up or fencing off destroyed buildings to keep vandals and squatters out. In no case should you risk your life while securing your property.

2. File Your Insurance Claim Right Away

The passage of time can become your enemy after a fire. Waiting too long to file a claim can result in a denial. Most policies require policyholders to notify the insurance company as soon as possible after an incident. Additionally, delaying informing your insurance company can result in your claim being put at the end of a long line of other claims on the insurance adjuster's plate.

When you do reach out to your insurance company, make sure that you are extremely organized and have all of the required documentation needed to process your claim. Additionally, you should save and record all of your communications with the insurance company in case of disputes or confusion in the future.

3. Document Losses

Your policy will cover many of your losses. However, without documentation of these losses, you will not receive any insurance compensation. Hence, you should be meticulous when documenting the losses you have suffered. It's best to start the process as soon as possible and take your time to avoid leaving anything out.

4. Ask for an Advance on the Claim

If you have lost many essentials, such as clothing, food, and medicine, you can file a request with your insurance company for an advance of a portion of your insurance payout. You can do this in a written letter sent directly to your insurance company.

Requests for advances are standard practice and are usually received positively by insurance companies. Keep in mind that any advance you receive will be deducted from your final insurance payout.

5. Keep Track of Your Daily Living Expenses While Living Outside Your Home

For reimbursement purposes, keep track of your daily living expenses while you live outside your home. Your insurance policy should cover the difference between what you spend while not at home and what you would normally spend.

For example, suppose that your usual weekly food bill is $300. But because the hotel you stay at does not have a full kitchen, you spend $500 a week on food while living outside your home after the fire. You should receive a reimbursement of $200 per week for food.

You will also likely receive full reimbursement for hotel stays. If you stay with friends or family, you may be able to convince the insurance company to compensate them for housing you.

6. Check for Hidden Damage

Make sure to thoroughly check your fire-damaged property for hidden damage. Fire can wreak havoc behind walls, below floors, and above ceilings, and it's easy for this damage to go undetected. The last thing you want to do is file a claim without listing all of the destruction. Have professionals inspect your home thoroughly for any hidden damage.

7. Keep Paying Your Insurance Premiums

Once you file your fire claim, don't forget to continue paying your premiums. Although you have just experienced a significant insurance event, you need to keep your coverage active in case another unfortunate incident occurs.

Understanding the Fire Insurance Claim Process

1. The insurance claim process begins with you notifying the insurance company as soon as possible of the fire damage;
2. Once the insurance company has received your claim, it will likely send out an adjuster to investigate the site, assess the damage, and estimate the cost of replacements and repairs;
3. The insurance company adjuster will review your policy to identify the extent of your coverage;
4. After the adjuster has finished the investigation and determined what is covered and not covered by your policy, they will provide you with a written estimate that details the costs of replacing and repairing damaged or destroyed items;
5. When you receive the written estimate from the adjuster, you will review it with your insurance company. Once you are both in agreement regarding the adjuster's estimates, the insurance company will write you a check;
6. Remember that the insurance claims process can be time-consuming and complicated. As such, you should remain in close contact with your insurance company until your case is resolved. Doing so will help ensure that your claim is processed in as timely a manner as possible.

Tips for Dealing with the Insurance Adjuster

• Always be courteous and cooperative when communicating with your adjuster, but never feel obligated to accept an offer that you do not agree with;
• Never accept or agree to any settlements or stipulations until you have thoroughly reviewed every aspect and detail of your case and discussed them with an attorney;
• Always remember that the insurance adjuster has the best interests of the insurance company in mind and will try to pay you less than you deserve. You should be prepared to negotiate for a proper payout;
• Stick with the pertinent facts during the claim process. Do not give out any irrelevant facts and information. Doing so can muddle the claim process and even lead to a reduction or denial of a payout;
• Do not embellish or exaggerate the nature of the destruction and injuries you have suffered;
• Document every communication you have with your adjuster and insurance agent, including emails, phone calls, and texts;
• Reach out to an attorney for help if you have any doubts or confusion whatsoever;
• Have patience with the process, which may require multiple rounds of negotiations before a satisfactory settlement is agreed upon.

Insurance Company Obligations During the Fire Insurance Claim Process

Insurance companies are obligated by law and contract to act in good faith and fair dealing when processing insurance claims. Good faith and fair dealings typically entail:

• Prompt and clear communication with the claimant throughout the claims process;
• Robust defense for policyholders when facing a liability claim;
• Approving or denying insurance claims on time, including acknowledging receipt of claims and investigating their merits in a reasonable amount of time;
• Working at all times to arrive at an equitable and fair settlement of insurance claims promptly;
• Informing claimants of denials with detailed explanations and reasons.

If the insurance company handling your claim fails to act in good faith and fair dealings, you can potentially sue it for bad faith or breach of contract. A lawsuit will allow you to claim damages against the insurance company for losses incurred by its bad faith actions or contract breach.

What to Do If Your Fire Insurance Claim Was Denied

Upon receiving a denial from your insurance company, you should first review your policy and the reasons given for the denial to understand the failure to approve the claim. If you need more clarification as to why your claim was denied, contact the insurance company and ask for further explanation.

If you believe an error was made or that your claim was processed unfairly, request that the insurance company reopen the claim. You should also consider meeting with an experienced fire insurance claim lawyer who can evaluate your case and help you explore your options for moving forward.

Dealing with Fire Insurance Claims: The Bottom Line

Property fires are never welcome. But you can ensure a smooth claims process by understanding the scope of your insurance coverage and knowing what to do in the event you experience a blaze.

At the Omar Ochoa Law Firm, we have helped thousands of commercial and residential clients through the claims process and would like to help you too. Contact us for a free case review and consultation with an experienced property damage lawyer. Remember, you pay nothing unless we win.