One of the first steps that many who lost their homes took was contacting their insurance companies. Real estate lawyers and lenders caution, however, that although contacting the insurance agent quickly is a good first step it is not nearly enough to ensure that a claim will be processed efficiently. Belinda Austin is one such loan officer who, having been active in the mortgage industry for more than eight years while living in Carlsbad, has seen how assumptions and naiveté about insurance claims can lead to even further disaster.

"I believe the worse thing homeowners can do right now is assume," she says. "Do not assume that you have adequate insurance coverage. Do not assume that the lender will extend your interest rate for free due to a disaster… Homeowners need to understand their homeowner insurance policy inside and out. I strongly encourage everyone to contact their insurance agent to make sure that they have adequate coverage."

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