What Advance Insurance Payments Are You Owed in a Wildfire?

When a wildfire strikes, the destruction can be immediate and overwhelming. Homes may be lost or uninhabitable, and families are often forced to evacuate with little warning. In these moments, immediate financial support can make a critical difference. Fortunately, California law requires insurance companies to offer advance payments for additional living expenses, also known as ALE, to help wildfire victims manage urgent needs.

This blog will walk you through what these advance payments cover, how to request them, and why proper documentation is essential. Knowing your rights under California’s insurance laws can help you avoid unnecessary delays and ensure you receive the wildfire compensation you’re entitled to.

What Are Advance Insurance Payments?

Advance insurance payments are early disbursements from your insurer to help cover your out-of-pocket costs immediately following a covered wildfire loss. Rather than waiting for the full claims process to conclude, these payments provide much-needed relief while your insurer assesses long-term property damage.

California’s Insurance Code requires insurers to offer reasonable advance payments upon notice of a wildfire-related claim, especially when a total or partial loss renders a home uninhabitable. These payments typically fall under your policy’s “Loss of Use” or “Additional Living Expense” coverage.

What Do Advance Payments Cover?

Advance insurance payments are designed to cover necessary and reasonable costs that arise when your home is uninhabitable due to wildfire damage. These expenses can include:

• Temporary Housing: Hotels, Airbnb rentals, or short-term leases.
  
• Food and Meals: Especially if your temporary housing lacks kitchen facilities.
  
• Clothing: If your belongings were destroyed or inaccessible.
  
• Essential Toiletries and Supplies.
  
• Pet Boarding: If your temporary housing doesn’t allow pets.
  
• Transportation Costs: If you’re forced to commute farther or rent a vehicle

These payments are not loans; they are partial disbursements from the total compensation your policy provides. However, they must be justified with receipts and proper documentation, which is why it’s important to keep detailed records from day one.

How to Request an Advance Payment

Insurance companies won’t always automatically offer an advance. You often need to ask in writing. Here’s how to get started:

1. Contact Your Insurer Promptly: Notify them of the loss and state that your home is uninhabitable.
2. Request an Advance for ALE: Ask what documentation they need and confirm the maximum amount available under your policy.
3. Send a Formal Written Request: Include the date of loss, your policy number, and details about your living situation.
4. Keep Receipts: Every dollar you spend, from meals to hotel stays, should be documented with receipts and dates.

If your insurer refuses to issue an advance without a valid reason or delays your request, they may be acting in bad faith, which can lead to additional legal claims.

Know Your Rights Under California Law

California is one of the few states with specific wildfire-related insurance protections. According to the California Department of Insurance, insurers must:

• Offer a fair advance payment when a policyholder suffers a covered loss and the home is uninhabitable.
• Not require a complete inventory before issuing ALE payments.
• Allow policyholders to recover reasonable costs for additional living expenses without needing to spend excessive time negotiating.

Moreover, California Insurance Code Section 2060 requires insurers to act in good faith, communicate promptly, and avoid delaying claim payments. If they fail to follow these mandates, they can be held accountable through legal action.

Common Mistakes to Avoid

When requesting or using ALE advance payments, wildfire victims often make a few common missteps. Here’s how to avoid them:

• Not Asking for an Advance: Insurers might not offer it unless you request it directly.
• Failing to Document Expenses: Missing receipts can delay reimbursement or lead to claim denials.
• Assuming Full Coverage: Your policy has ALE limits, so it’s crucial to budget and monitor spending accordingly.
• Delaying Contact with Your Insurer: Reporting the loss late can jeopardize your ability to receive benefits.
• Not Seeking Legal Guidance: If your insurer denies your claim or delays payment, consult a wildfire attorney to explore your options.

Additional Tips for Managing Advance Payments

• Use Digital Tools: Save receipts and invoices using cloud storage or a document app.
• Keep a Daily Journal: Note where you stayed, meals purchased, and any changes in costs.
• Work with Your Wildfire Attorney: They can help ensure your expenses align with your policy limits and prevent unnecessary disputes.

Know Your Rights

Advance insurance payments can be a lifeline in the chaotic days and weeks following a wildfire. But too often, victims are left in the dark about their rights or face pushback from insurers unwilling to provide the support they’re legally required to offer. If you’ve lost your home or the ability to live in it because of a wildfire, don’t wait to take action.Work with a knowledgeable wildfire attorney to ensure your fire damage claim is handled properly. At Adamson Ahdoot, we’re committed to holding insurance companies accountable and helping you secure the full compensation you need to rebuild.