Pam Steinhauser's most vivid memory of the fire that destroyed her Encino home last summer is of her children's toys flying out of a second-story bedroom window; a firefighter's thoughtful attempt to salvage something tangible and comforting from the blaze that robbed her family of their sense of safety and security.
Although no one was hurt in the blaze, which apparently was sparked by a faulty wine refrigeration unit in the garage, the six-bedroom home was destroyed, leaving the family of six temporarily homeless and dazed.
"My first thought was that this is not happening to me, it can't be happening," Steinhauser said. "I was numb, just going through the motions, until neighbors showed up with water, money for a meal and support."
Adding insult to injury, Steinhauser and her husband, Jerry, realized when they filed their insurance claim that they were grossly underinsured, a common mistake among homeowners.
Insurance specialists say that thousands of homeowners nationwide buy too little homeowners insurance because they fail to properly estimate the worth of their personal property, a situation that can be avoided through properly appraising a home's value and its contents.
"If you ask friends if they know what's in their homes, more often than not they don't," said Pete Moraga, a spokesman for Insurance Information Network of California, a nonprofit insurance industry trade group. "Read your homeowners insurance contract; it will save you hassles later on."
Moraga and other insurance experts say it is not uncommon for home buyers to purchase only the minimum coverage mandated under the terms of their mortgage contracts, leaving them vulnerable to considerable out-of-pocket expenses when a fire damages or destroys their homes.
Under California law, lenders require only that buyers cover the replacement costs of the structure--the house itself. Homeowners who buy this minimal coverage, however, must foot the bill for new furniture, appliances, carpets, drapes and other basic necessities when a fire destroys those items.
Insurance experts recommend that at the minimum, homeowners purchase enough insurance to rebuild the house, replace the contents of the home at their current value and cover living expenses during construction.
Sherry Parker, a fire underwriting superintendent at State Farm Insurance, recommends that homeowners choose an A-rated, financially strong insurance company, one with a low complaint ratio. Those ratios, which calculate the number of justified complaints per 100,000 policies in force, are available at the California Department of Insurance's Web site at http://www. insurance. ca. gov/ docs / FS-ComplaintStudy.htm.
Parker also recommends that homeowners invest in the services of a professional appraiser to assess the cost of covering the contents of one's home. Homeowners also should periodically get a professional appraisal of their home's value, to see if their insurance coverage is keeping pace with home prices in the vicinity.
"You should check and recheck," Parker said. "In Southern California, prices are higher, and it costs more to build homes, so make sure your coverage matches the current replacement costs."
Insurance agents urge homeowners to keep an inventory of the contents of their homes--from cell phones to toaster ovens--by videotaping all items stored in every room of the house. They also recommend storing irreplaceable personal property, including photograph negatives and important documents, off-property, in a safe-deposit box.
Before the fire that damaged their home, the Steinhausers had been dropped by their insurance company after the family filed back-to-back claims for earthquake damage and a subsequent flood that damaged parts of their home.
Under the California Fair Plan--a government-and insurance industry-sponsored plan that offers property insurance to those deemed too risky by other insurance companies--they had enough coverage to replace the structure, but realized too late that they were underinsured by $200,000 for their personal property.
"My advice to homeowners is that you must be very conscientious about keeping track of what your policy covers," Steinhauser said. "Don't assume that your insurance agent, even a trusted one of many years, is staying on top of the value of your personal property. They often aren't."
The Steinhausers, who lost precious photographs, videos, most of their clothes and furniture and an art collection, ended up using their insurance money toward the purchase of a new home rather than putting their children through the disruption of reconstructing their home for the third time.
While some fire victims make the same choice as the Steinhausers, the majority of homeowners rebuild their houses, said Mike Trevino, an Allstate spokesman. Because most fire damage is limited to a few rooms of a house, rebuilding usually is a more cost-effective measure than buying elsewhere, he said. Also, many homeowners are emotionally attached to their properties and neighborhoods and seek to re-create the homes they've lost.
About 383,000 residential fires were reported nationwide in 1999, including more than 282,000 one-and two-family dwellings, according to Moraga. The property loss for homes and apartments that year, the last year for which data is available, totaled $5 billion.
The most common causes of residential fires are cooking, incendiary fires of suspicious nature (fireworks and arson), home heating, electrical wiring and appliances, according to the U.S. Fire Administration, the arm of the Federal Emergency Management Agency that tracks fires.
Whatever the cause, the emotional impact of a home fire lingers a lot longer than the time it takes to buy a new home or rebuild a lost one.
"I was in a state of near-euphoria in the beginning, I was so thankful that everyone was OK," Pam Steinhauser said. "For weeks I was fine, but then it all hit me. I'm still not over it."