Fire Insurance: Deny, Delay, and Prepare to Defend

You never forget a fire in your house.

As I opened the garage door to hear the incessant shrill of the fire alarm, questions shot through my brain: Is this fire real? Or is it the irritating alarm system that is always a problem?

Opening the door on the landing, I discovered a smoke-filled house. (I forgot my fire training. You should never open a door without feeling the bottom of the door.) I could not see my nose. My lungs filled with acrid smoke, and my body spontaneously started coughing as fear radiated through me. What next? Where is my dog? What do I do?

My cell phone was almost dead. My mind raced. Would I have enough power to call 911? Should I call first or try to get my dog? Should I throw the breakers for the house?

My alarm service failed. If I had not called 911, I would have lost everything. Make sure to test your alarm systems frequently.

The Fire

Thankfully, my phone had enough power to call 911.

Before the fire department arrived, the police came. A friendly policeman denied me entrance to my house to find my dog, but he went in and found my white dog, Grayson, hiding under the bed. He found him by shining a large flashlight through the smoke. The dog hates noise. Shaking, I coaxed Grayson from underneath the bed as the fire department started running hoses through the house to the basement.

The fire department was incredible. They arrived quickly and were very competent. I was lucky.

Thankfully, my three dogs were OK. We sat outside--the dogs patiently waiting in their crates-- and watched a four-alarm fire consume our house.

What now? The fire was out. It was midnight.

I walked my dogs and tried to decompress. Tomorrow would be a new day.

What Caused the Fire

Have you ever read the warning on electronics about the potential for a lithium battery fire? This was my new reality.

Hurricane Debbie moved through Pennsylvania, dumping five inches of rain on the Borough in forty-five minutes. My new house has a sump pump. The sump pumps are piped underground to a cement pit to mitigate pollution in the Chesapeake Bay. All works well in normal rain, but the pits are undersized for the instantaneous flow of the weakening hurricane.

Earlier that day, my friends and I battled ten inches of water in my basement. Slogging through water makes you hate life. Everything wet is heavy. The fight is on to prevent black mold and protect electronics. Somehow, water got onto the home electronics system in the fight, which caused the fire.

Rebuilding My House

That night, I hugged my dogs and thought no big deal. I was insured. The replacement value for my house was more than the value, and I had $299,000 of interim living while I figured things out. How bad could this be?

My Experience with Insurance

I called the insurance and got a voicemail. I slowly realized that the insurance company, HIPPO, is a financial institution acting as a new-age digital insurance company.

So, I followed the instructions and filed a digital claim through the portal. A reclamation company pulled into my driveway as I loaded the dogs to go to the groomers for baths to remove the smoke from their fur. They offered fans and dehumidifiers to help me. I took their offer. They called the insurance company and got approval. Amazingly, they got a desk agent. This is the only time that I have had a desk agent answer a phone.

The reclamation company connected me with a disaster services network for temporary living. I moved into a hotel and waited for Monday, thinking I would quickly restore my house to pre-loss condition. During dinner, the waitress shared a story of a poor soul who stayed in the hotel for a year as her house was rebuilt. I smiled and thought, thank heavens, that will not be me. I was so naive.

Defend, Delay, and Deny. Prepare to Fight an Endless Cycle of Insanity.

My journey started on August 9th. Today marks my sixth month in a hotel. Rebuilding my house is a daily fight. The house has been demolished to the studs, my personal belongings are cleaned and in storage, and the items that classified as non-salvage properly disposed of in three dumpsters.

My "large loss adjuster" never answers the phone. She will call intermittently on an 800 number that has no name recognition. The time to answer an email is three-to-four days.

I now have a much deeper understanding of the need to defend, how insurance denies, and the mind-numbing processes of delay. I write this blog to help others work through their tragedies. Here are my learnings:

• Buy Insurance from An Agent. When you have a claim, there is no substitute for a real person—an insurance agent—to help you through the process. I made the mistake of buying insurance from a faceless online service.
• Get the Policy. Online insurance companies give you a shell of a policy online. The details—the definition of replacement value, depreciation, and policy details—are not shared with the purchase and will not be sent if requested. For example, my claim for $173,600 for content replacement was depreciated to $63,455. The devil is in the details. It has taken me seven months to get the details on my policy. I only got it through a lawyer and a third-party mediator. HIPPO would not send it to me directly. The language is as think as the smoke in my house.
• Hire a Third Party. Don't do this by yourself. The large loss desk agents are over-worked and not incented to help. Hire a firm to do the restoration and secure an insurance public adjuster. Don't use the insurance company "preferred vendors." The cost to rebuild my house by HIPPO's preferred builder ServePro was $129,000. The demolition was $130,000. The math is illogical. A rebuild is usually 2-3 times the cost of the demolition. The time for the rebuild is 14 weeks. I estimate that the insurance process to close the gap will take 30 weeks. I estimate that my house will be rebuilt by October 2026.
• Get a Large Binder. Prepare for a Long Fight. The paperwork to fight the claim is mind-numbing. Building the records for content reclamation took me four months and I had help from the third-party reclamation company.
• The Leverage is the State Insurance License. I filed a breach of contract claim, but to no avail, with the state of Pennsylvania. The state reviewed the claim and after a six-month review, recommended a lawyer. The legal process takes years. The state will not rule on a monetary issue, but they will revoke the license if the insurance company does not respond to time-based deadlines. Each state has different acceptable deadlines for the insurance company to respond to a claim, an adjusted living expense report, a content claim, or a restoration. While the state will not revoke a license for the failure to pay a claim, they will take action if the insurance company does not respond within deadlines. This is why you need a third-party adjuster to track the numerous claims for adjusted living, remediation, cleaning, storage, demolition, and rebuild. The insurance industry is an amazing maze of confusing rules and regulations which favor the insurance agency. As a policy holder, I was unable to get clear answers. The maze is maddening.
• Prepare for a Long Fight. When you pack out of your house, take clothing and personal items for four seasons. Nothing will happen quickly. Insurance preferred vendors will always want to pay 80-90% of the replacement value; and the fight to close the gap, will take a long time. The insurance game is to try your patience. In the process, manage the interim living allowances carefully. Plan to be out of your house for 12-16 months.

I hope that this helps. I am lucky that I own my home and have no third parties to manage at a mortgage company. I am also fortunate that I am not having to work with children in school/practice schedules, and the relocation of a family. I feel for those that do.

In short, don't get water on a lithium battery. And, if you do, don't fight the insurance company on your own.

All the best.