by Josh Frankel, CFP®
Director
Portfolio and Wealth Management West Bearing Investments
This article was originally published in 2020. As the author, I chose to focus on the Camp Fire in northern California as a case study for fire safety and financial preparedness during disasters. My colleague, Mary Lago, CFP®, CTFA, grew up in Paradise, California, and tragically her mom lost her home in the fire. Fast forward, to January 2025, and my own hometown of Pacific Palisades, California, was also devastated by yet another unimaginable catastrophe.
My mom and stepdad were among the thousands of families who lost their homes and personal belongings (photo below). My sister and her family were displaced, but their home was spared.
Source: Los Angeles Times
My hometown will take years to recover, and the road to rebuilding will be long and windy. Building on our 2025 Investment Outlook theme of “Lessons Learned”, I want to share three lessons learned from these tragedies so everyone can prepare as best they can.
Lesson One: Plan Ahead
The U.S. Fire Administration and FEMA have created a fire safety checklist, which serves as a good reminder on important mitigation measures. Properly functioning smoke alarms and a fire escape plan are especially important during fire season. If you live in an area with a risk of wildfires, consider your community escape route as well.
Keeping gas (or charge) in your car can also come in handy if you don’t have time to fill up and need to leave town in a pinch. As a point of reference, it took my mom nearly five hours to drive to my aunt’s house (a drive that normally takes 30 minutes). Fortunately, she had ample gas in her car to get there.
Lesson Two: Review Your Insurance Policies Annually
In addition to fire safety, it is critical to ensure you have proper insurance to cover potential losses. Many insurance companies are restricting their coverage in designated areas, meaning it is more important than ever to review your policies.
There are many considerations to build a solid insurance plan, and we recommend conducting an annual review with your insurance agent. During your next review, here are 10 questions to ask about your homeowners’ policy. Guidance on these questions will be a step toward ensuring you have proper protection.
Does your homeowners’ policy contain actual cash value or replacement cost?
Do you need documentation of your belongings in the event of complete loss?
What level of coverage do you have for your living expenses while you rebuild a home from potential loss?
Does the policy cover all risk, as opposed to named perils only?
Does the policy determine the value of the home by an interior-exterior home appraisal service, as opposed to a formula or an estimator?
Does the policy reflect changes in construction costs? And, has coverage been reassessed after home improvements?
Is the covered home in an area with potential exposure to natural catastrophes—flood, windstorm, earthquake, wildfire, etc.?
Does the covered home have special liability exposures, such as swimming pools, recreational equipment, etc.?
If the home is uninhabitable for a period, does the loss of use provision allow the policy owner to maintain her or his customary standard of living?
Is there a cap on coverage when rebuilding a home to code after a loss?
Lesson Three: Keep an Inventory of Your Personal Belongings.
A complete inventory of your personal belongings is important for both the homeowner and the insurance company. A documented list of your belongings will help the insurance company cover you in the event of a loss. The claims process will be more efficient, and you may need the inventory list for estate planning purposes.
The insurance company, Chubb, offers a few ideas on how to build a home inventory. They encourage taking 4-6 photos of each room, taking shots from multiple angles to document the contents. Next, they encourage taking pictures of artwork, jewelry and other high-value items. A video of each room and belongings is another way to document belongings.
Finally, here are a few other considerations to help protect your cherished memories and belongings:
Digitize print photos
Store important files securely on the cloud
Maintain an accessible emergency preparedness kit
Consider a fireproof safe
Although this is not a pleasant topic, it reinforces how critical it is to take steps knowing that no one can completely protect themselves from loss. But this real-life example illustrates how planning can help accelerate the recovery process.
We encourage you to review your coverage, but even more important is to work with a trusted agent who can help explain your policy and coverage and a reputable insurance company that will promptly pay appropriate claims.
Ferguson Wellman, Octavia Group and West Bearing do not provide tax, legal, insurance or medical advice. This material has been prepared for general educational and informational purposes only and not as a substitute for qualified counsel. You should consult qualified professionals to understand how this information may, or may not, apply specifically to you.