📋 First-Party Property Claims Overview

A first-party property insurance claim is one you make against your own insurance company for covered losses to your property. Unlike third-party claims (where you seek compensation from someone else's insurer), first-party claims involve your homeowners, renters, or property insurance policy. California law provides strong protections for policyholders seeking to recover for property damage.

Common First-Party Property Claims

🔥 Fire & Wildfire Damage

Structure damage, smoke damage, debris removal, additional living expenses, and total loss claims from California wildfires

🌊 Water Damage

Burst pipes, appliance failures, roof leaks, and sudden water damage (not flood, which requires separate coverage)

🔒 Theft & Burglary

Stolen personal property, jewelry, electronics, cash limits, and damage caused during break-ins

🏠 Homeowners Claims

Dwelling coverage, personal property, liability, medical payments, and additional living expenses (ALE)

Types of Property Coverage

🏠 Dwelling Coverage (Coverage A)

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Covers the physical structure of your home, including attached structures like garages, built-in appliances, and permanent fixtures. Most policies cover the dwelling at replacement cost value (RCV) rather than actual cash value (ACV). California law requires insurers to offer guaranteed replacement cost coverage.

Key issues: Underinsurance, code upgrade costs, extended replacement cost endorsements, and disputes over scope of repairs.

📦 Personal Property Coverage (Coverage C)

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Covers your belongings - furniture, clothing, electronics, appliances, and personal items. Standard policies have sub-limits for valuable items like jewelry, cash, firearms, and collectibles. May be actual cash value or replacement cost depending on your policy.

Key issues: Depreciation disputes, proving ownership, sub-limit caps, and inventory documentation.

🏚 Additional Living Expenses (Coverage D)

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Covers the increased cost of living when your home is uninhabitable due to a covered loss. This includes temporary housing, restaurant meals (above normal food costs), storage, laundry, and other necessary expenses. California policies typically provide ALE for a reasonable time period.

Key issues: Duration disputes, reasonable cost limits, and documentation of increased expenses.

🏗 Other Structures (Coverage B)

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Covers detached structures on your property such as fences, sheds, detached garages, guest houses, and pool equipment. Typically limited to 10% of dwelling coverage. Separate limits may apply.

Key issues: Determining what qualifies as "other structure" versus dwelling, and coverage limit adequacy.

📖 Related Reading

For comprehensive information on insurance bad faith claims in California, including punitive damages and Brandt fee recovery, see our detailed guide:

Insurance Bad Faith in California - Complete Legal Guide →

⚠ California Wildfire Protections

California has special protections for wildfire victims under Insurance Code sections 10103.7 and 2051.5:

  • Insurers must offer replacement cost coverage
  • Extended replacement cost (at least 25% above policy limits) must be offered
  • ALE must extend for at least 24 months for total losses
  • Claims must be handled per the Fair Claims Settlement Practices Regulations

🔍 Evidence: Proof of Loss & Inventory

Proper documentation is critical to recovering full policy benefits. California regulations and case law establish what evidence you need and how to present it effectively.

Proof of Loss Requirements

The sworn proof of loss is a formal document required by most policies after a claim. Under CCR 2695.7(h), insurers cannot require a signed proof of loss before beginning their investigation, but they may require one before final payment.

📄 Proof of Loss Components

  • ✓ Date, time, and cause of loss
  • ✓ Description of damaged/destroyed property
  • ✓ Claimed value of each item or category
  • ✓ Other insurance covering the loss
  • ✓ Interest of others in the property (mortgages, liens)
  • ✓ Sworn signature under penalty of perjury

📷 Documentation to Gather

  • ✓ Photos and videos of damage (before cleanup)
  • ✓ Pre-loss photos of property and belongings
  • ✓ Police or fire department reports
  • ✓ Receipts, credit card statements, bank records
  • ✓ Appraisals of valuable items
  • ✓ Warranty cards and owner manuals

Personal Property Inventory

Creating a comprehensive inventory is often the most time-consuming part of a property claim. Under California law, you must make reasonable efforts to document your losses, but insurers cannot demand an impossible level of proof.

📝 Inventory Best Practices

  • ✓ Go room by room systematically
  • ✓ Include item description, age, condition, and quantity
  • ✓ Research replacement costs (not original purchase price)
  • ✓ Note brand and model numbers when known
  • ✓ Include items in storage, garage, yard, and vehicles
  • ✓ Do not forget clothing, linens, toiletries, food items

💰 Valuation Methods

  • ✓ Replacement Cost Value (RCV): Cost to replace with like kind and quality
  • ✓ Actual Cash Value (ACV): RCV minus depreciation
  • ✓ Check your policy for which method applies
  • ✓ RCV policies pay ACV initially, then holdback after replacement

Dwelling/Structure Documentation

🏠 Structure Claim Evidence

  • ✓ Multiple contractor repair estimates (get 2-3)
  • ✓ Architectural or engineering reports if needed
  • ✓ Building permits and original construction documents
  • ✓ Scope of work detailing all repairs needed
  • ✓ Code upgrade requirements from city/county
  • ✓ Photos showing construction quality and materials

📈 ALE Documentation

  • ✓ Temporary housing receipts (hotel, rental)
  • ✓ Restaurant and meal receipts
  • ✓ Storage unit contracts and payments
  • ✓ Laundry and dry cleaning costs
  • ✓ Pet boarding or additional pet expenses
  • ✓ Additional transportation costs

💡 Inventory Resources

United Policyholders (uphelp.org) offers free home inventory spreadsheet templates specifically designed for California claims. The CDI website also provides inventory guidance. Using standardized formats can help ensure completeness and organization.

⚠ Burden of Proof

While you must prove your loss, California courts recognize that perfect documentation is often impossible after a total loss. In Cooper v. Travelers Indemnity Co., the court held that policyholders can prove losses through testimony, circumstantial evidence, and reasonable estimation when documentation was destroyed. Insurers cannot demand impossible levels of proof.

💰 Damages

California law allows property insurance claimants to recover the full value of their covered losses, plus additional damages when insurers act in bad faith.

Damage Type Description
Dwelling Damage (Coverage A) Full cost to repair or replace your home to pre-loss condition, up to policy limits. Replacement cost policies pay without deduction for depreciation. Extended replacement cost adds 25%+ above limits.
Personal Property (Coverage C) Value of damaged or destroyed belongings. RCV policies pay replacement cost; ACV policies deduct depreciation. Sub-limits apply to jewelry, cash, firearms, collectibles.
Additional Living Expenses Increased cost of living while displaced - housing, food above normal, storage, laundry, transportation. Continues for reasonable repair period or policy time limit.
Other Structures (Coverage B) Detached structures: fences, sheds, detached garages, guest houses. Typically 10% of dwelling coverage limit.
Debris Removal Cost to remove debris after a covered loss. Usually limited to a percentage of dwelling coverage or separate sub-limit. Critical for fire and storm losses.
Code Upgrade Costs Additional costs to bring repairs up to current building codes. May require separate endorsement or is limited to a percentage of dwelling coverage.

Bad Faith Damages

When insurers wrongfully deny, delay, or underpay property claims, additional damages become available:

Bad Faith Damage Description
Consequential Damages Foreseeable economic losses caused by insurer's conduct: foreclosure costs, credit damage, lost business income, increased repair costs due to delay.
Emotional Distress Mental anguish from wrongful claims handling. No physical injury required in first-party insurance cases. Particularly significant in total loss situations.
Brandt Attorney Fees Fees incurred to obtain policy benefits wrongfully withheld. Recoverable as contract damages under Brandt v. Superior Court.
Punitive Damages Available when insurer acted with malice, oppression, or fraud. No statutory cap. Can be substantial for egregious conduct.
Prejudgment Interest 10% per year on amounts wrongfully withheld from date they should have been paid (Civil Code 3289).

📊 Sample Damages Calculation

Example: Wildfire Total Loss Claim

Dwelling replacement cost $650,000
Extended replacement cost (25%) $162,500
Personal property (RCV) $195,000
Other structures (10%) $65,000
Additional living expenses (24 months) $84,000
Debris removal $45,000
Policy Benefits Subtotal $1,201,500
Prejudgment interest (if delayed 18 months) $180,225
Emotional distress (if bad faith proven) $150,000
Brandt attorney fees $200,000
POTENTIAL TOTAL RECOVERY $1,731,725+

⚠ Underinsurance Crisis

Many California homeowners are significantly underinsured. After recent wildfires, reconstruction costs have surged, often exceeding policy limits by 40-60%. Key protections:

  • Extended Replacement Cost: Adds 25-50% above dwelling limits
  • Guaranteed Replacement Cost: Covers full rebuild regardless of limits
  • Review your coverage annually - construction costs increase yearly

📝 Sample Language

Copy and customize these paragraphs for your California first-party property claim demand letter.

Opening Paragraph
I am writing to formally demand full payment of my property insurance claim under Policy No. [POLICY NUMBER]. On [DATE OF LOSS], my property located at [PROPERTY ADDRESS] suffered a covered [fire/theft/water damage/etc.] loss. I timely reported this claim on [DATE] and have cooperated fully with your investigation. Your company's failure to promptly and fairly adjust this claim violates California Insurance Code Section 790.03 and the Fair Claims Settlement Practices Regulations (CCR Title 10, Section 2695).
Policy Coverage Summary
My homeowners policy, Policy No. [POLICY NUMBER], provides the following coverage: Dwelling (Coverage A): $[AMOUNT]; Extended Replacement Cost: [25%/50%]; Personal Property (Coverage C): $[AMOUNT]; Other Structures (Coverage B): $[AMOUNT]; Additional Living Expenses (Coverage D): $[AMOUNT]. My policy provides [replacement cost/actual cash value] coverage for personal property. All premiums have been paid in full, and the policy was in full force and effect at the time of the loss.
Loss Description - Fire
On [DATE], the [NAME] Fire, which has been declared a state emergency, destroyed my residence at [ADDRESS]. The structure was a total loss, along with all personal property contained therein. I was forced to evacuate on [DATE] and have been displaced ever since. I immediately reported this loss to your company on [DATE], Claim No. [CLAIM NUMBER]. I have submitted a complete sworn proof of loss, detailed personal property inventory, contractor repair estimates, and all other documentation requested by your adjuster.
Loss Description - Theft
On [DATE], my home at [ADDRESS] was burglarized. The police report (Report No. [NUMBER]) documents forced entry through [location] and the theft of personal property. I immediately reported this loss to your company on [DATE] and have provided a complete inventory of stolen items with their replacement values, supported by receipts, photographs, and credit card records where available. The total value of stolen property is $[AMOUNT], and I have also incurred $[AMOUNT] in damage from the break-in.
CCR 2695 Violations
Your company has violated the California Fair Claims Settlement Practices Regulations (CCR Title 10, Section 2695) in the following ways: (1) Failure to acknowledge my claim within 15 days as required by CCR 2695.5(e); (2) Failure to accept or deny my claim within 40 days as required by CCR 2695.7(b); (3) Failure to provide a written explanation for the partial denial of my claim as required by CCR 2695.7(b)(1); (4) [INSERT ADDITIONAL VIOLATIONS AS APPLICABLE]. These violations constitute evidence of bad faith and expose your company to regulatory penalties as well as civil liability.
Damages Demand
I hereby demand payment of the following amounts within [30 DAYS] of the date of this letter:

1. Dwelling replacement cost: $[AMOUNT]
2. Personal property replacement cost: $[AMOUNT]
3. Other structures: $[AMOUNT]
4. Additional living expenses to date: $[AMOUNT]
5. Debris removal: $[AMOUNT]
6. Less deductible: ($[AMOUNT])

TOTAL POLICY BENEFITS DEMANDED: $[TOTAL]

If this claim is not paid within the time specified, I will pursue all available remedies including bad faith damages, Brandt attorney fees, and punitive damages.
Deadline and Consequences
If I do not receive full payment by [DEADLINE DATE], I will file a lawsuit in California Superior Court for breach of contract and insurance bad faith. I will seek all available damages including policy benefits, consequential damages, emotional distress, Brandt attorney fees pursuant to Brandt v. Superior Court (1985) 37 Cal.3d 813, and punitive damages pursuant to Civil Code Section 3294. I am also filing a complaint with the California Department of Insurance regarding your violations of CCR 2695.

Please direct all further communications to [YOUR NAME OR ATTORNEY NAME AND ADDRESS].

🚀 Next Steps

What to do after sending your demand letter.

Expected Timeline

Days 1-14

Insurer receives and reviews your demand letter with claims department and legal counsel

Days 14-30

Response with payment, revised settlement offer, or continued denial with explanation

Days 30+

If no adequate response, proceed with CDI complaint and/or litigation

If They Do Not Pay or Respond

  1. File a Complaint with the California Department of Insurance

    Visit insurance.ca.gov to file a complaint online. CDI investigates claims handling violations and can take enforcement action. Document all CCR 2695 violations in your complaint.

  2. Consult a Property Insurance Attorney

    Many California property insurance attorneys offer free consultations and work on contingency for underpaid or denied claims. The potential for Brandt fees and bad faith damages makes strong cases attractive.

  3. Consider Appraisal

    Most California property policies include an appraisal clause for disputes over the amount of loss. Each party selects an appraiser, and the two appraisers select an umpire. This process can resolve valuation disputes faster than litigation.

  4. File Lawsuit in Superior Court

    Property claims are filed in the Superior Court of the county where the property is located or where you reside. Claims exceeding $25,000 are unlimited civil cases. You can pursue both contract claims (policy benefits) and tort claims (bad faith damages).

📖 Learn More About Bad Faith

If your insurer has acted in bad faith by unreasonably denying, delaying, or underpaying your claim, you may be entitled to significant additional damages. Read our comprehensive guide:

Insurance Bad Faith in California - Punitive Damages, Brandt Fees & More →

⚠ Watch the Statute of Limitations

  • Contract claims (policy benefits): 4 years from denial or breach (CCP 337)
  • Tort claims (bad faith): 2 years from wrongful act (CCP 339)
  • Some policies have shorter contractual limitations: Check your policy carefully

Do not delay - the shorter tort limitation applies to your bad faith damages claims.

Need Legal Help?

Property insurance claims can be complex, especially after major losses. Get a 30-minute strategy call with an insurance attorney to evaluate your claim and discuss next steps.

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California Resources