Los Angeles Fires: Take Home Insurance, Learning for Homeowners

Posted on: Jan 17, 2025 | 3 mins | Written by: HDFC ERGO Team

Los Angeles Fires: Take Home Insurance, Learning for Homeowners

Unless you live under the rock you must have heard about the Los Angeles fire that has shocked the entire world. Notably, the Palisades and Eaton Fires started in early January 2025 collectively scorching over 40,000 acres, destroying more than 12,000 structures, and resulted in at least 25 fatalities. According to various media reports, the financial toll is staggering, with damages estimated between $52 billion to $57 billion.

These events underscore the unpredictable nature of disasters not just in the U.S., but globally, including in India.

What exactly happened in Los Angeles?

On January 7, 2025, a fire erupted in the Pacific Palisades neighbourhood, which is assumed to be driven by severe Santa Ana winds and drought conditions. It rapidly consumed thousands of acres, destroying numerous homes, including those of celebrities like Paris Hilton and Bella Hadid. Simultaneously, the Eaton Fire ignited in Altadena, further contributing to the widespread devastation.

The fires have resulted in not only the tragic loss of life and property but also massive evacuations, power outages, and significant economic disruptions. This is what we know so far, and the images circulating on the internet and television are heightening our collective anxiety. Incidentally, we have nothing to fear. Los Angeles is quite far away from India. If you Google the distance the shortest distance (air line) between India and Los Angeles is 8,401.40 mi (13,520.74 km). Of course, the fire won’t reach us, but that doesn’t mean we shouldn’t be alert.

Why should we take note of the Los Angeles fire?

While wildfires of this magnitude may be less common in India, the country is no stranger to natural disasters. Floods, cyclones, earthquakes, and even urban fires have caused significant property damage and loss of life in recent years. The Chennai floods of 2015, the Kerala floods of 2018, and the Cyclone Amphan in 2020 are stark reminders of nature's unpredictability.

Also, wildfires have shown us their wrath in the recent past. In June 2024, Uttarakhand faced severe forest fires amid a heatwave, with hundreds of large fires ravaging the hilly state. The thick smoke leads to hazardous air quality, impacting public health and causing economic disruptions. Experts have warned that such incidents could become more frequent due to climate change. In early 2021, the Simlipal Biosphere Reserve in Odisha experienced prolonged wildfires due to a dry spell and a below-average monsoon. The fires affected nearly a third of Simlipal National Park, causing extensive damage to the local environment, property, and livelihoods.

These wildfires lead to considerable damage and destruction as follows:

Environmental Damage

The primitive and the most evident damage is the destruction of flora and fauna, loss of biodiversity, and degradation of ecosystems. The fires ravage all that comes its way, leaving nature barren and charred.

Economic Losses

Wildfires spread rapidly and can extend to areas that are densely populated leading to damages to property, loss of timber resources, and financial burdens on firefighting efforts.

Health Hazards

One of the by-products of wildfires is the smog and soot that leads to considerable air pollution leading to respiratory issues among local populations.

Climate Impact

The release of carbon emissions contributes considerably to global warming.

Lessons for Indian Homeowners

While some of the damages due to wildfires are difficult to control or recover there is something that can be done to protect your home and property. Getting comprehensive home insurance can help you recover damages to your property if fate takes a turn for the worse. Home insurance serves as a financial safety net, protecting homeowners from unforeseen events like floods, cyclones, earthquakes and even wildfires. Here’s why it's essential:

1. Protection Against Natural Disasters

Most home insurance policies cover damages from floods, earthquakes, cyclones, and fires, ensuring financial support for repairs or rebuilding of property once a claim is placed after a disaster strikes.

2. Coverage for Personal Belongings

Beyond the structure, home insurance or property insurance also compensates for the loss or damage of personal belongings to insured elements as mentioned in the policy documents.

3. Liability Coverage

If someone is injured on your property, liability coverage can help cover legal and medical expenses, given that your policy has this provision.

4. Temporary Living Expenses

If your home becomes uninhabitable due to damage, some policies cover the cost of temporary accommodation paying you the rent or lump sum whatever is applicable.

Steps Indian Homeowners Should Take

Various videos and memes are doing the rounds of the internet where Hollywood celebrities are seen mourning over their losses, especially to their property after the fires. Many ignored the importance of having fire insurance. In India, where forest fires could be an eventuality due to climatic changes, homeowners should not underestimate the importance of home insurance.

However, before buying a home insurance to secure your property, take note of the following:

1. Assess Your Risk

Understand the specific risks associated with your property's location. For instance, coastal areas might be more prone to cyclones, while certain regions close to forests could be prone to wildfires. Make a note of things that you need to safeguard your property from.

2. Choose the Right Coverage

Ensure the home insurance policy you choose covers a wide range of potential disasters. Standard policies might not cover all-natural calamities, so consider add-ons or riders for comprehensive protection.

3. Evaluate the Sum Insured

The sum insured should reflect the current market value of your property and belongings to ensure adequate compensation in case of loss.

4. Understand Policy Exclusions

Be aware of what your policy does not cover to avoid surprises during claim settlement. Check if your policy covers your property for the disasters that you need protection from.

5. Maintain Documentation

Keep records of property ownership, valuations, and an inventory of belongings to facilitate smooth claim processing.

6. Regularly Review and Update Your Policy

As property values and personal belongings change over time, ensure your insurance coverage remains adequate. If your policy expires you won't be able to place a claim for the damage so ensure timely renewals.

Conclusion

The tragic events in Los Angeles highlight the devastating impact of natural disasters and the importance of preparedness. For Indian homeowners, investing in comprehensive home insurance is a proactive step towards safeguarding one's home and financial future. While we cannot predict when or where the next disaster will strike, we can ensure that we are prepared to face it with resilience and security.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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