Lost Your Home in the LA Wildfires? Insurance Claims, FEMA Help, and Your Mortgage

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Who this show is for

Welcome to Mortgage Mom Radio. I'm Debbie Marcoux, the Mortgage Mom — and this is take two for today. I apologize to those who joined right at 1:00: I set my text alert to go out at 1:00 a.m. instead of 1:00 p.m., so I stopped the stream and waited for the text to go out at 1:15.

Many of you joining today have questions and you're not sure what to do. You may have lost your home in the fire. You may be evacuated with damage that wasn't a total loss. And many of you with no damage at all are asking: what happens when my fire insurance policy comes up for renewal and my carrier drops me, like they've dropped so many others? In one recent year, well over two hundred thousand California policies were cancelled by private carriers, and many of those people never found new fire insurance — and there is fire insurance to be found. So today I want to give you resources, key steps, where to start, and how to move forward.

I'll say up front: I am not an insurance agent, so I can't answer questions about your specific policy. But I've been scouring the news and doing research since yesterday, and I have pages of notes for you. This is live and interactive — put your questions in the feed and I'll answer them.

Immediate help: 211, rides, and showers

The single most important starting point: from your cell phone, dial 211. They help with assistance like finding a place to stay if you've been evacuated or lost your home, including a temporary-housing program through Airbnb. Right before I went live I saw the Airbnb vouchers may have filled up — but call anyway. A lot of evacuees in those placements will go home once they can, and that opens up space. If you're displaced, call 211, see what they tell you, and keep calling every day.

If you lost your car or can't reach it, Uber and Lyft have been helping. Uber was covering rides up to $40 with a relief code, and Lyft had its own California fire relief code — check their apps for the current codes. Planet Fitness is offering free access to showers through January 15 at locations that are still open. A Toyota dealership was offering free rental cars. New help is coming out every day — two websites I found genuinely useful were Convoy of Hope and Frontline Wildfire Defense; both have pages of practical resources.

Step one: breathe, then document everything

If you have damage or a total loss, the very first thing to do sounds silly: sit down and breathe. Collect yourself. Then start making a list of everything that was in your home — every personal belonging — and next to each item, what it cost you.

And if you're watching because you're worried about a future cancellation, this part is for you too. Every single homeowner should stop today, take 15 minutes, and walk the house taking pictures: the sofa, the refrigerator, the TVs, the garage, the computers, the bedroom sets, the jewelry box. Keep receipts for anything new you buy. Most of us shop online now — log into your Best Buy account, your Amazon account, Home Depot, Lowe's, Pottery Barn, wherever you've bought things, and start downloading receipts. They go back a long way. Put everything into OneDrive or Dropbox — somewhere in the cloud — so that even if you lost your computer, you'd still have access. Old birthday-party photos can also show what you owned.

If you've had a loss, that inventory — what you had, what you paid, and a check mark next to everything destroyed or unsalvageable — is what the insurance companies need to see.

Your insurance policy: get it, read it, ask about rent

Next: reach out to your insurance agent and get a copy of your policy. Read through it, and if you don't understand it, have your agent walk you through it. Understand your deductible. Ask the big question directly: if I'm displaced, does my policy cover rent somewhere else while I rebuild? Your mortgage will most likely keep moving forward and you'll most likely keep making payments — we'll come back to that — so rent coverage is what keeps you housed in the meantime.

If you have a California FAIR Plan policy, remember that FAIR Plan covers fire and wildfire disaster only — like earthquake coverage, it's a single-peril policy. Your broker should also have set you up with a companion policy that covers everything else a normal homeowners policy would. That means FAIR Plan households have two policies — find both, and file both claims where they apply.

Your agent can also walk you through how and when to make a claim. This matters: claims have timelines. Some claims can't be made until the disaster has been declared over — and yesterday, Wednesday, the president declared a state of emergency, which brings FEMA into the picture. Ask your agent what your windows are, and don't miss them.

FEMA: who qualifies and what it covers

You can't apply for FEMA assistance unless the president has declared your area a disaster — and that's now happened, so everyone in LA County dealing with these fires is eligible to apply. You'll need to be a U.S. citizen, non-citizen national, or qualified non-citizen (the FEMA website defines those), verify your identity, and verify ownership or occupancy.

Understand what FEMA is: FEMA assistance is intended to supplement, not replace. Your insurance kicks in first; FEMA helps offset what insurance doesn't cover. And FEMA typically helps with your primary residence only — if you lost an investment property or a second home, they're generally not going to make up the difference.

What can FEMA provide? Rental assistance while you're displaced. Lodging expense reimbursement for hotel or motel stays. Home repair or replacement money, including utilities and residential infrastructure. Accessibility-needs money for survivors with a disability. Personal property assistance. Transportation, medical, dental, and funeral assistance. Temporary housing units when rental assistance isn't available, and hazard mitigation to help rebuild stronger. To calculate and verify losses, a home inspection is required. And for the interviews you've seen of people who had no insurance at all because their carrier dropped them — FEMA is exactly who can still help them. How much, I can't say; I don't work for FEMA. But get the application in, through FEMA's website. The Red Cross and Salvation Army are also there for immediate help.

Do you have to rebuild?

Some homeowners will want to rebuild; others will want to use this as an opportunity to relocate. The short answer: no, you do not have to rebuild. You can use your insurance payout to purchase a new home. Weigh the cost of moving against the cost of rebuilding: debris removal, mold mitigation, materials and labor, re-landscaping, ideally to the latest fire codes. If you have a replacement-cost-value policy, those expenses are probably covered. If you have an actual-cash-value policy, cleanup alone may exceed the policy, forcing you to pay out of pocket. This is where your insurance agent earns their keep — know which policy you have before you decide.

Q&A: escrow and closings in LA County

Mary asks: “Do you think the insurance difficulties will affect future purchases and refinances?”

Right now, yes. I have three loans that were supposed to close today — a home equity line of credit, a purchase, and a reverse mortgage — all in LA County. Because the president has declared a state of emergency and the FEMA map covers all of LA County, I cannot fund a loan there until FEMA declares the disaster over. Once that happens, the appraiser has to go back out to the property — not inside, but a drive-by with photos — to verify there's no damage. If your home lucked out, we fund and close.

So if you're in escrow on any real estate transaction — purchase, refinance, HELOC — talk to your loan officer and your agent and expect a delay. Could it be a week? Very possibly. Will these close this month? I absolutely believe so, as long as the winds die down, the fires get put out, and there isn't another wind event — I don't have a crystal ball. Moving forward it gets easier: brand-new transactions will order brand-new appraisals with current photos of the property and the surrounding comparables. As for what this does to home values — there's just no way to know until it's over.

Debris, soot, and smoke

What do you do with fire-damaged items? In many cases materials are too damaged to save. Start by calling whoever handles your trash service and ask how debris removal will work — you still own that land, and you're still the responsible owner. Then work your inventory: everything you own, with a check mark next to what's destroyed.

If your home is standing but smoke-damaged, there's a lot you can learn to do: removing soot, ventilating, washing walls, wiping down appliances and electronics with a vinegar solution or an enzymatic smoke cleaner, deep-cleaning the HVAC, washing clothing with vinegar (it may take several cycles), and sending rugs and curtains out for professional cleaning. I saw a news story about the only house still standing in its row on PCH, and I told my son: nobody got lucky in this. The smoke, the water, the smell from every home that burned around it — that owner has enormous work ahead. Frontline Wildfire Defense's site covers this in detail, down to textile cleaning.

One more thing: after fire comes flood. I saw people praying for a huge rainstorm — please don't. Fire-hardened soil sheds water almost like ceramic; with the vegetation gone, hillsides erode and slide, streams clog with debris, and drainage systems fail. Pray for a light drizzle and calm winds, not a downpour.

Q&A: work and lost income

Michelle asks: “Should affected people still go to work? Is there anything that can help with their income?”

If you can safely work, work. I was on the phone today with my loan processor — she's evacuated, there was fire in her garage, everything's covered in soot, no power, contaminated water — and she's working from her RV parked in front of her mom's house. Keeping your normal rhythm keeps your mental stability; it's easy to spiral if you let everything stop. If your job itself is gone because of the fires, there are programs for that too — look at FEMA, the Disaster Assistance Improvement Program, state and local relief funds, and the resource pages at Convoy of Hope.

What insurance costs now — and the FAIR Plan, explained

Let's talk about renewals, because a huge number of Californians have lost coverage since 2018–2019, entire condo complexes included, and it's been getting more expensive every year. In 2018, on a $600,000 purchase, I'd quote homeowners insurance around $1,200 a year — call it $80 to $100 a month. Today, that same buyer, I'm quoting more like $150 a month — an $1,800 to $2,000-a-year policy. And if they're shopping in a known high-fire area, I tell them we need an insurance quote before I'll even finish the pre-approval, because the FAIR Plan can change the whole payment.

If your carrier drops you, do not go without insurance. Start with an insurance broker — a broker shops many companies to see who will take your home. I use one for my clients constantly, and I'm happy to share his name and number; call my office or message me through the website. If no carrier will write the home, the California FAIR Plan is the last-resort option. It's expensive — that's why many people who were dropped never replaced their coverage — but the people hosing down uninsured homes on the news are the reason you carry it anyway. If it takes giving up a car payment to afford the premium, do it.

What the FAIR Plan actually is: it's not a state agency and not taxpayer-funded. It was established by statute in 1968 as a syndicated fire-insurance pool made up of every insurer licensed to write property casualty business in California. Each member company shares the plan's profits, losses, and expenses in proportion to its market share in the state. Your FAIR Plan policy is written out of that pool. Expect it to work like earthquake insurance: deductibles based on percentages, not a flat $1,000 or $2,000. If you have a FAIR Plan and you've had a loss, get your hands on that policy, understand your share, then apply to FEMA to help offset what comes out of your pocket. And remember the companion policy — FAIR Plan won't cover the slip-and-fall or the burst pipe; that's what the second policy is for, and it's why we quote both when we pre-approve you.

Your mortgage after a fire

The last step: if you have a mortgage, call your mortgage company. If your house burned down, the mortgage does not go away — you still have to make the payment; the insurance is what's there to offset your losses. But every servicer is different, and just like during COVID, some will offer help. Call the 800 number on your statement, tell them you've had damage or a complete loss, and ask if there's anything they can do temporarily. They may be willing to defer payments for a couple of months while you get settled. I can't promise they will — but it is absolutely worth the phone call.

The checklist, one more time

One: breathe, and get yourself somewhere safe — 211, the Red Cross, a shelter. Two: make the list of everything you own and what it's worth, and dig for receipts through every store account you have. Three: if your home is standing, walk it today and photograph everything — and call your agent about riders for expensive jewelry or art so you're insured accurately. Four: get copies of your policies from your insurance agent, learn your claim timelines, and don't miss your window. Five: file with FEMA. Then re-evaluate from there. If I've done a mortgage for you and I have a copy of your policy, reach out and I'll send it over. If I can help with anything at all, I will research, I will Google, I will try to find answers for you.

Wrap-up

I hope this helped even one person. Call me at 844-935-3634 — that's 844-WE-LEND-4 — or go to mortgagemomradio.com and use the contact button, and I'll send you anything I can find to point you in the right direction. Prayers for less wind, for just a small dusting of rain, and for all of our first responders. I'll be back next week — talk to you all real soon.