California Wildfire Insurance Claims

Topics: Loss Control

Wildfire season has arrived this year in full force. While wildfires are a natural occurrence in California’s landscape, every year the season arrives earlier. This year, an estimated 1.5 million acres have already burned, with over 1,900 structures damaged or destroyed.  

Last year, the biggest and most destructive wildfire in history, the Camp Fire, hit Northern California and destroyed over 18,000 residential and commercial structures. This wildfire spread at a rate of over the size of a football field every second, destroying entire towns in its path. Additionally, at the same time, the Woosley and Hill Fires in Southern California claimed over 96,000 acres and damaged over 1,600 structures.

It’s still too early to estimate the total damages these wildfires will cause. However, it’s expected that the losses will once again be at record levels, exceeding billions of dollars in total. As an insurance agent in California, it’s important to stay updated about the facts and understand how you can help your clients get through these challenging situations.

What Causes a Devastating Wildfire?

While it’s impossible to avoid a catastrophe like a wildfire altogether, there are things businesses can do to better prepare for them – and recover from them. First, it’s important to understand why some areas are more prone to wildfires.

The geographical region itself can lead to an increased risk, with areas like the western United States, Portugal, Spain, Greece, the south of France and southern Australia all being well-known for severe wildfires. Both residential and commercial buildings in these areas have a higher threat of damage from wildfires when they are surrounded by brush, forest, grass or crops. Dry weather in these regions decreases the moisture levels of the vegetation, and combined with strong winds, the intensity of a fire increases dramatically, spreading over a wider area much quicker.

Recovering from the California Wildfires

California, sadly, is no stranger to these types of destructive wildfires. The state’s dry, hot weather from late spring to early fall can produce devastating wildfires which are made even worse by the strong Santa Ana winds.

There’s no doubt small business owners in these areas are experiencing a wide range of emotions, feeling helpless, frustrated and scared as they watch their livelihood literally go up in smoke. However, a businessowners policy (BOP) is designed to cover property fire damage to the building, office space, equipment and inventory. A BOP also includes business interruption insurance, which helps cover the profits a company would have earned, as well as the additional operating expenses incurred as a result of the fire, like the cost to operate in a temporary location.

The Business Insurance Claim Process Following a Wildfire

After property has been damaged by a wildfire, businesses will need start the process of filing a claim with their insurer. It’s important for a company to contact their insurance agent as soon as possible, as the agent can provide some necessary resources and help walk their clients through each step of the claim process. When the damage is excessive, the insurer may send an insurance adjuster to the location to inspect the property.

Insurance agents can share these tips for submitting a claim to help ensure their clients’ businesses recover to the fullest extent possible following a wildfire:
  • Contact the insurance provider as soon as it is possible to get the process started
  • Create an inventory list of the items damaged in the fire, along with copies of any receipts to substantiate the losses
  • Document the damage to the buildings and any other structures
  • Make a list of all items needing to be repaired or replaced
  • Keep track of all expenses, including costs associated with operating in a temporary location, any transactions that occur throughout the recovery period, and ongoing expenses for utilities or advertising that are paid even if the business is closed

Loss Control from AmTrust Financial

AmTrust’s Loss Control Department offers resources to help small business owners learn how to better protect their commercial property from a variety of risks, including wildfires. Additionally, we can help insureds identify specific hazards and offer solutions that fit each operation. We are dedicated to providing the right recommendations and resources necessary to create an effective loss prevention program for small businesses. Please contact us today to learn more.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Individual coverage may vary and may not be available in all states. In the event of a conflict with the material herein, the terms and conditions of any issued policy will control. Claim examples are general, may or may not be based on actual claims, and are for illustrative purposes only. Any available coverage for a claim will be determined based on the facts and circumstances of the claim as well as the terms and conditions of the policy, including any applicable exclusions or deductibles.

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