First comes the evacuation, a mad scramble for insurance documents, financial statements, family heirlooms. As you drive away, smoke shrouds the windows, flames lick the rooftop. Your home is reduced to ashes.
After the firetrucks and reporters have gone, you're left with a charred concrete slab and lingering emotional trauma. You must deal with door-to-door solicitors and fend off shady contractors and other scam artists who prey on disaster victims. And if part of the house is left standing, you'll need to secure the property to fend off looters.
And then comes the Big Question: What do I do now?
Hundreds of Southern California homeowners are grappling with the monumental task of rebuilding their damaged or destroyed houses after last week's fires. Although it's too soon to chronicle their journeys (and misadventures) through the complex rebuilding process -- the dialogue with claims adjusters and contractors is just starting -- many fire victims have already realized that the steps taken before a disaster are as important as those done after.
"Usually after a disaster, people call us because they don't know the name of their insurance company,'" said California Department of Insurance spokeswoman Carrie Beckstein.
Homeowners who don't adequately prepare for a disaster often suffer far greater emotional and financial damage than those who do, according to insurance industry experts.
Caroline "Punkey" Stevens, 63, learned this lesson the hard way. Stevens, a part-time recreation counselor for the city of Burbank, was on her way home from work in April when a firetruck passed in the opposite direction.
"I said, 'Oh, please don't let it be my house,' only it was," she said. Her home of 30 years was "pretty much destroyed."
"I had nothing; I was absolutely devastated," she said.
Unfortunately, things got worse.
Since Stevens hadn't updated her homeowners policy in 30 years, her insurance company paid $100,000 less than what contractors said it would cost to rebuild the house. "I just paid the premiums and no one ever contacted me," she said.
Stevens eventually found a contractor willing to do the job for less but is struggling to pay rebuilding expenses.
The moral: Homeowners should periodically review their policies to make sure they're adequately covered, insurance experts say.
People shouldn't "wait for stressful times to find out they don't have what they need," said Allstate agent Wilbert Smith in Pasadena.
Often homeowners forget to conduct a photo or video inventory of their homes, a simple task that would greatly assist them when filing post-disaster claims.
"Once we had a person who told us they had $15,000 worth of exotic canned food, the weirdest stuff ever: canned rattlesnake, canned possum," said Farmers Insurance agent Bart Baker of Malibu. "If the owner had been able to come up with receipts or photographs, that would have helped him a lot in his claim."
Disaster victims must make fast decisions on subjects they know little about, including insurance and construction issues. In many cases, homeowners, clueless about the extent of damage and the cost of rebuilding, sometimes turn to independent insurance adjusters.
In many cases, a line of these adjusters shows up at the victim's front door, or what's left of it, offering to represent the victim in dealings with the insurance company. Typically the adjuster gets 10% of the settlement claim, according to Bill Rake, president of the Greenspan Co./Adjusters International in Encino.
While Frank Arnstein's Beverly Hills home was burning in a February 2002 fire, "at least seven or eight" adjusters stopped by to sell their services, Arnstein said.
"I didn't hire any. I said, 'I can handle all this myself with the insurance company,' " Arnstein said. "But then my builder said, 'You better get an outside adjuster.' "
Arnstein did, and he believes he made the right decision. The adjuster "handled everything from A to Z," he said. "There's no way a person who doesn't know what the insurance company will pay can handle" the claims process.
Insurance agents disagree. "Some of these guys are like ambulance chasers," Baker said. "They say, 'Your insurance company is going to rip you off,' and [victims] don't know what to do."
The homeowner has additional headaches to deal with, such as securing the damaged property against looters, the curious and other intruders. "Board up the house and gate in the property," Rake said.
Meanwhile, victims have to find a place to live after leaving emergency shelters. "A lot of people don't have family or credit cards, and they're left out on the streets," said Red Cross spokeswoman B.V. Castillo.
Homeowners often believe their insurer will pay for temporary housing, but that's not necessarily the case. The additional living expenses clause in most policies covers only added expenses, according to Allstate spokeswoman Lisa Wannamaker. To assist fire victims, Fannie Mae announced last week that lenders can suspend or reduce mortgage payments on a case-by-case basis.
Next comes the difficult decision of finding the right contractor to rebuild the home. The California Contractors State License Board warns homeowners to beware of unlicensed contractors who show up at the front door and offer to do repairs on the spot -- provided you pay a cash deposit.
The homeowner should get a written contract that details all the work to be done and ask to see the contractor's state license and other identification. And it's essential to get at least three bids and check each contractor's references for work done in your area, according to the license board (www.cslb.ca.gov).
If the insurance settlement doesn't fully cover rebuilding expenses, federal and state programs can help. Last week, President Bush declared Los Angeles, Ventura, San Bernardino and San Diego counties a disaster area, opening the way for federal assistance to fire victims. They can apply for low-interest loans from the Small Business Administration.
The maximum SBA loan for home repair or replacement is $200,000. A personal property loan of up to $40,000 is also available. Another option is a grant from the Federal Emergency Management Agency, which tops out at $25,000.
"People usually say, 'I don't want a loan; I want a grant,' " said Karma Hackney, Individual Assistance Program manager for the California Department of Emergency Services. But a FEMA grant often is not enough.
"If you have a $400,000 home, a $25,000 grant from FEMA is not going to cut it," Hackney said. "Low-interest loans and your insurance [make up] the best long-term recovery program."
Each disaster has its own set of recovery issues. "In a fire, often everything is gone, but in an earthquake, [damage] is mostly structural," Hackney said.
Whatever the disaster, home rebuilding is a tremendously stressful process that takes anywhere from months to years. For instance, Arnstein's Beverly Hills home took nine months to repair, and Stevens has been living in a rental apartment for nearly seven months while her Burbank house is being rebuilt.
Disaster victims must do their homework, understand their rights and hope for the best. "Disaster recovery never makes a person whole," Hackney said.
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Where to turn when fire strikes
California Contractors State License Board (800)-321-CSLB (2752) or visit www.cslb.ca.gov
California Department of Insurance (800) 927-HELP (4357) or (213) 897-8921
Federal Emergency Management Agency:
(800) 621-FEMA (3362)
Insurance Information Network of California at www.iinc.org
Small Business Administration (SBA): (800) 488-5323 or www.sba.gov
-- Jeff Bertolucci