There are few things more frightening than getting caught in a house fire or returning home to discover everything you’ve owned has been burnt to the ground. Your house collapsed and your belongings were reduced to a pile of ash. All that remains is a somber shade of black. This has happened to thousands of people in the past and deciding what to do can be challenging. However, take a deep breath and contact your loved ones to tell them you’re safe. We’ll tell you exactly what you need to do if your house burns down in a simple 4-step process.
So what to do when your house burns down? The first thing to do is find a new place to stay. Then, don’t make any major decisions for a month. Prepare your fire report to file with the insurance company and file the claim. Stay in touch with your insurance agent until they offer you a full settlement amount for the market value of your home.
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Find A New Place To Stay
This one is obvious. Call your relatives. Tell them you’re safe. Gather the kids if they’re in school. You’ll need to find a new place to stay and this is your main priority. You can worry about the fire report and the insurance company after. You need to have a place to spend the night. If you have a relative that can offer you temporary accommodation, call them up.
If you don’t have relatives you’ll have to book a hotel or another form of lodging. If you’re out of money you can contact the American Red Cross or the Salvation Army because they provide emergency lodging. These agencies have branches in every state in the U.S. Give them a call and tell them your house burned down and you need temporary accommodation. They’ll help you out until you’re ready to file your claim.
File The Claim
This is the hard part. You can file a claim right away, although you’re not forced to agree on a settlement immediately. We recommend filing on the first day to speed up the bureaucracy. You’ll have to contact your mortgage lender/bank if you have a mortgage on the house. If you have mortgage payments, you should continue making payments because the bank might repossess the house and if you’ve been paying them off for 10 years there’s a chance the home appreciated and you would lose out on that appreciation. Keep making your car payments and your mortgage payments. This way you won’t lose your home and you won’t lapse on your car insurance. If you lost credit cards and ID documents in the fire, get them replaced immediately as those documents are critical.
Prepare The Fire Report
The Fire Department issues a Fire Report for each house damaged by fire. This is a report that the Fire Department in your jurisdiction files after they arrive on the scene and evaluate the damage. They record their experience with the fire and they list all notable damages. The fire report includes critical data such as the date of the incident, the damage incurred and other details related to the fire.
The insurance company will request a copy of the fire report, and you should produce multiple copies in case you need them later on. If the fire department does not issue you a report right away, you can get it at their billing agency. The fire department will issue a bill for their services and the insurer has to pay for the fire bill. In some cases, they will include the report directly with the bill. No matter the case, each house that burns down has a fire report that the owner can obtain.
Don’t Make Decisions For A Month
You’ll be distressed and prone to making emotional decisions. What if your adjuster offered you $300,000 for the home and your home was estimated at $400,000? It won’t be enough to cover the rebuilding cost. When you’re shocked and distressed, you’ll be more prone to being manipulated. This gives leeway for insurance companies to emotionally blackmail you and rush you into a decision that isn’t in your best interest. The insurance company will likely call you on the first day and send agents and brokers who will start estimating the value of the damage. Don’t accept deals and settlements until you’ve analyzed the facts for a few weeks, evidenced the damage and consulted law firms. Document the damage by taking pictures of the home and recording videos and photos. This way if you don’t reach an agreement with your insurance company, you can take them to court and force them to pay the full market value of your home.
The important thing is to not rush into a settlement on your first day or the first week. The insurer has to compensate you to the full extent of your insurance coverage. If your policy includes 100% replacement cost for the home, you need to ask the full market value of your home. In many cases, the insurance company will include liability damage and living expenses, in case you need money to pay for a hotel while your home in uninhabitable. Document everything and get photos of the damage, which is critical in the court of law.
Precautions For Fire Damage
If you’re reading this and you didn’t have the misfortune of your house burning down but you want to be prepared, there are few things you can do. There is no way to predict when a house will catch fire, however, you can prepare for the worst-case scenario by taking the following measures:
- Increase Coverage. If you have home insurance it might not be enough to compensate for the full market value of the home. Think about how much your home is worth and how much it would cost to replace your belongings. Consider hiring a realtor to take a look at your house and estimate the market value. Once you find out the figure, increase your home insurance coverage adequately. Consider shooting a video of your most valuable items and insuring them separately. This way even if your house burns down completely, you’ll get reimbursed for the full value of your belongings.
- Build An Emergency Fund. If you haven’t done this already, start saving money right now. You should have an emergency fund set aside that you never touch. This emergency fund should cover you for at least 3-6 months in living expenses in the event of a catastrophe. Start a bank account and set aside a couple of thousand dollars that you only use in the event of an emergency.
What If The Insurer Drags You Out?
The government forces insurance companies to act in a timely manner during catastrophic accidents. Example: In California, the state mandates that insurance companies must send a “notice of intentions” within 30 days of a file being claimed. This way if you file on the first day, you’ll be guaranteed to receive an offer in the first month. You’re entitled to a payment in that time frame if the insurer doesn’t dispute your coverage. If the insurer chooses to drag out your settlement, there are things you can do. Write them a letter and call them. If they’re irresponsible, consult the Department of Insurance, a branch of the Federal government which forces insurance companies to comply with federal laws or pay huge fines.