One of the first steps that many who lost their homes took wascontacting their insurance companies. Real estate lawyers andlenders caution, however, that although contacting the insuranceagent quickly is a good first step it is not nearly enough toensure that a claim will be processed efficiently. Belinda Austinis one such loan officer who, having been active in the mortgageindustry for more than eight years while living in Carlsbad, hasseen how assumptions and naiveté about insurance claims can lead toeven further disaster.

"I believe the worse thing homeowners can do right now isassume," she says. "Do not assume that you have adequate insurancecoverage. Do not assume that the lender will extend your interestrate for free due to a disaster… Homeowners need to understandtheir homeowner insurance policy inside and out. I stronglyencourage everyone to contact their insurance agent to make surethat they have adequate coverage."

Contacting one's insurance agent seemed to be the easy part formany homeowners. As of Oct. 25, State Farm, the largest homeinsurer in California, had received more than 2,000 propertyclaims. Approximately 500 of those claims involve homes that wereeither destroyed entirely or damaged beyond the point of beinghabitable. Austin's advice is a little more complex to follow,however. "Adequate coverage" can mean everything from making sureone's replacement costs vary with inflation to carrying Ordinanceand Law Coverage, which covers the costs associated with rebuildinga home after newly enacted building codes have been put in place,and Additional Living Expenses Coverage.