As many residents know, California wildfires are increasing in number and intensity year over year. Because of this, more homes are at risk of fire damage or of loss to wildfires. In our blog post “What to Do if Your House is Destroyed by a Wildfire,” we outlined five steps homeowners should take after loss. First, we recommended that homeowners call their insurance company and ask for a detailed explanation of their current homeowners insurance policy. Next, we suggested homeowners start tracking all expenses related to their home and their new living situation right away. Third, we instructed homeowners to return home to survey the damage only after they were cleared to do so by local experts. After this, they should file a claim with their insurance company and apply for additional assistance if needed. Finally, homeowners should educate themselves about recurrent risk of wildfire, surrounding infrastructure and available design-build teams before determining whether to rebuild or relocate. In this post, we will discuss how to rebuild your home after a wildfire -- from establishing a budget to choosing the design-build firm. Follow below to learn more.
The appraisal value of your home is unlikely to match the cost to rebuild. In her article “Rebuilding Your Home After an Insurance Claim” for The Balance, Mila Araujo explains why. Araujo writes that “the cost to rebuild a home after major damage is often higher than its market value.” This can be due to the high cost of materials to rebuild, “rush labor charges and specialists' fees." Additional costs might include "a temporary home for you and your family, and more.” How much your insurance company is willing to pay for the reconstruction of your home depends on what kind of policy you have. Typically, homeowners will hold a Replacement Cost Value policy or an Actual Cash Value policy. In her article “Rebuilding Your Home After an Insurance Claim” for Coverage.com, Elizabeth Rivelli explains the difference.
Rivelli writes that the RCV of a fire damaged home "is the cost of rebuilding your house to [its condition] before it was destroyed.” However, the RCV of your home is not the current real estate market value. This amount is determined by your home’s “square footage and the cost of construction in your area.” Extended Replacement Cost and Guaranteed Replacement Cost coverages are often found in RCV policies. An extended replacement cost policy “will pay to rebuild your home to its original condition." They will do so "even if the cost is greater than your dwelling coverage limit, up to a certain amount.” Guaranteed replacement cost coverage means “your insurance company will pay to rebuild your home to its original condition." They will pay the amount "regardless of the construction cost, with no limit.”
Actual Cash Value policies are often less expensive than RCV policies. However, they do not consider the original condition of the home before it was fire damaged. Instead, an ACV policy “factors your home’s depreciation into your payout.” As such, under an ACV policy, the insurance company will not “pay you to rebuild your home to its original condition.” Homeowners with ACV policies should check for an inflation protection clause. These clauses “impact your claim payout based on the current inflation rate in your area.” Policyholders without this clause will likely end up with a low payout that does not cover the full cost of a rebuild. Regardless of your policy type, homeowners should keep in mind that certain elements of the rebuild might not be covered. These might include debris removal and custom elements. Additional Coverage clauses might include these aspects of your rebuild.
Element Homes’ Amanda Leigh has over twelve years of experience helping homeowners recover from the loss of their homes due to wildfires in California. Over the last twelve years, Amanda has helped countless clients navigate the insurance industry, securing maximum payouts on their policies. Throughout her career with Element, Amanda has been able to secure high payouts for her clients. We recently spoke with Leigh about her experience rebuilding homes after wildfire damage and what homeowners might expect.
She notes that “adjusters will offer a settlement that’s comfortable for them, that many people accept.” After such a painful experience, homeowners “just want to move on with their lives, even though they are entitled to more.” Leigh explains that the majority of settlements offered by insurance companies “don’t include code upgrades." They are also rarely "enough to build the house back to its previous square footage.” According to Leigh, Element Homes is “happy to write an estimate and have a discussion with your insurance company." Doing so could "settle things a bit quicker.”
Before the restoration or construction process can commence after fire damage, the lot must be cleared of debris as soon as possible. Homeowners should not attempt to remove this debris by themselves, choosing instead to hire a licensed contractor for the job. The Napa County resource “Wildfire Debris Clean-up and Rebuilding FAQs” explains. Napa County notes that “the safe and appropriate removal of household hazardous waste and debris and ash” must be conducted by licensed professionals. This is because “the improper handling and disposal of hazardous material may impact you, the environment, and the general public health.”
Before a lot is cleared of debris, the county will likely send over a team to conduct a mandatory inspection. Debris removal might be covered under your homeowner’s insurance policy. If it is not, you might be eligible for a subsidy from the state of California. The California Governor’s Office of Emergency Services resource “Debris Removal” notes that “CalRecycle maintains a list of interested contractors in fire debris removal work.” This list is “available to all general contractors and subcontractors” helping homeowners with their rebuild. Homeowners can submit the Right-of-Entry form to Cal OES to secure state and federally subsidized debris removal. The California State Department of Toxic Substances will coordinate with the US EPA to clear your property. Contact the California State Department of Toxic Substances Control or the U.S. Environmental Protection Agency for more information.
If your home completely burned down during a California wildfire, an inspector is unlikely to check for structural damage and aesthetic damage. Instead, they must check the utilities surrounding your home. Design Everest resource “A Guide to Rebuilding After a Fire” notes after removing debris from a fire damaged property, one must contact an inspector. Homeowners should “contact a Town-licensed septic evaluator to have the system inspected.” If a licensed inspector approves, you might be able to “continue to use your existing septic system.” However, repairs might be required in order to proceed with the build. If your home does require septic system repairs, “you will need to secure a repair permit from the Onsite Septic Division.”
Make sure that the firm you hire understands updated wildland building codes. They must also have experience with disaster resilient design and be aware of recent changes to building codes in California. The right design-build company will not only understand local laws, but they will also be up-to-date with the latest wildfire hardening techniques. In addition to wildland building codes, they should also understand maintenance requirements and educate homeowners about them. We noted in our article “Preparing Your Home for the Next California Wildfire Season” that homes in high risk wildfire zones must be maintained. For example, LA County homeowners of property located in the Very High Fire Hazard Severity Zone (VHFHSZ) are subject to certain rules. They are required by law to "maintain their property in accordance with the Fire Code (L.A.M.C. 57.322).” An effective design-build firm will rebuild your home and design the landscaping in a way that stands up to wildfires. Look for firms with exhaustive experience rebuilding in California’s high risk fire zones for the best results.
In our recent article “What to Do if Your House is Destroyed by a California Wildfire,” we referenced an article written by Christopher Flavelle. Flavelle explained in his article “Why Is California Rebuilding in Fire Country? Because You’re Paying for It” for Bloomberg that counties will often lessen build codes after a disaster to encourage families to rebuild. Christopher Flavelle referenced the county of Sonoma, which began issuing rebuild permits shortly after the 2017 Tubbs Fire. He noted that “rather than strengthening building codes, the county...weakened rules." Instead of relying on local ordinances to protect them, homeowners should seek expert builders who are beyond the curve. They should ensure that a local design-build firm has the tools and experience to rebuild their home to exceed current safety codes. The firm chosen by a homeowner to rebuild their home should “employ emerging technology to protect the property and its inhabitants.”
In his article “What I Wish I Knew After My House Burned Down” for The Bold Italic, Roger Magoulas offers advice. Magoulas, who once lost his home to a fire, recommends homeowners work with the right team on reconstruction of their home. Magoulas identifies Title 24 as one new rule to ensure the design-build team you hire understands. As many in California are aware, the state government “is implementing continually tighter rules leading toward 'net zero' houses.”
Title 24 provides an update to California’s energy code. Magoulas writes that those hoping to rebuild after fire damage “will spend a lot of time on window inventories." They will also spend on "heating system capacity, the color of floors (which affects heat gain) and other items you may not expect." Each of these will play into whether you can "get a permit to build.” If your builder or architect is unfamiliar with these new rules, they might hire a consultant to help.
Lastly, homeowners should hire a single design-build team to reconstruct their home rather than assembling a team of contractors and subcontractors on their own. We explain why hiring a single firm is better than finding licensed professionals yourself in “Benefits of Working with a Design-Build Firm.” These benefits include working under a single contract and engaging with a team of experts who already know how to work well together. Design-build firms also provide homeowners with an all-inclusive estimate of the reconstruction of their fire-damaged home. This includes both the timeline and budget of the build.
Unexpected delays are less common -- especially with a firm that understands California’s building codes and how to rebuild in a high risk wildfire zone. Lastly, it is less likely that the vision you have for your home will be lost because you will communicate with a single team. Given these five benefits, working with a design-build firm takes a lot of stress off the homeowner. This is particularly true for homeowners who have recently lost their home to a disaster. Unlike piece meal teams assembled by a homeowner, design-build firms handle each element of the rebuild -- from obtaining permits to scheduling additional inspections.
Custom home designer Element Homes is one of California’s premier design-build firms -- serving both Northern California and Southern California. The Element Homes team has many years of experience rebuilding homes lost to wildfire. Element Homes has reconstructed homes in both the San Francisco Bay Area and the Greater Los Angeles Area. From coastal homes to those nestled in the mountains of California, Element Homes understands local building codes. Our team also knows wildfire hardening techniques and recent changes to state legislation.
Those who choose Element Homes for their home reconstruction project will have the benefit of working with Amanda Leigh. As mentioned above, Amanda Leigh has over twelve years of experience negotiating with homeowners insurance companies. She continues to do so on behalf of homeowners who have recently lost their homes to wildfires. She can help homeowners get the best possible payout for their rebuild, swiftly beginning the rebuild process. If you are wondering how to rebuild your house after a wildfire, look no further than Element Homes.
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