Attended the class "What Appraisers Need to Know About Property Insurance" by the Appraisal Institute. It was hosted by Appraisal Institute - Southern California Chapter and SCCAI Eastern Branch, Northwestern Branch & RICS California Chapter. Presenters were Joe Derhake, Thomas Dawson and Bryan Hill. Met the manager of the restaurant Tamayo Restaurant and Art Gallery who gave me a tour of the art gallery. $6.5M worth of art in the 1928 building which used to be the DMV. There was one other woman there. Learned some interesting things about insurance and the recent LA fires. #realestateappraisal #propertyinsurance #SCCAI #RICS #marycummins #realestateappraiser
From the class description
"TOPIC: Basics of Property Insurance. What Appraisers Need to Know.
As extreme weather events like the 2025 Los Angeles wildfires grow more frequent and severe, property insurance is becoming an increasingly critical concern for appraisers and property owners alike. In some cases, soaring insurance rates have rendered assets virtually uninsurable. This session explores how environmental due diligence and clear communication of value can help mitigate insurance risks and improve outcomes for clients.
Session Overview:
• Joseph Derhake, PE, will discuss the insurance crisis through the lens of recent climate-related disasters, including the L.A. fires. He will explain how due diligence data can be used to increase a property’s climate resilience and support better insurance outcomes. Attendees will learn practical strategies for assessing risk and mitigating environmental impacts in high-risk areas.
• Thomas Dawson, ASA, will introduce core insurance concepts relevant to personal property appraisers. His presentation will cover:
o How to communicate the value of appraisal services for insurance purposes.
o How to empower clients to ask the right questions when dealing with insurance agents.
o The key roles and responsibilities in the insured-insurer relationship.
o The claims process and how to support clients with real-world examples.
• Bryan Hill, CAC, will provide first-hand insight into the environmental impact of the L.A. fires and current approaches to mitigation. His extensive experience in wildfire response and disaster assessment will help attendees understand how appraisers can work alongside environmental experts in post-disaster scenarios.
Speakers:
Joseph Derhake, PE
Founder and CEO, Partner Engineering and Science, Inc.
Joseph Derhake has over 25 years of experience as a professional engineer and leader in environmental and engineering due diligence for commercial real estate. He has overseen thousands of transactions, investigations, and remediation projects, while contributing to policy development at major financial institutions. His background bridges technical, environmental, and financial considerations within the commercial property space.
Thomas Dawson, ASA
Appraiser and Insurance Specialist
Thomas Dawson brings over a decade of experience at the intersection of insurance and personal property appraisals. A certified commercial insurance specialist since 2016, he has quoted and managed thousands of policies covering homes, autos, fine art, musical instruments, manuscripts, and other collectibles. As an ASA-accredited appraiser since 2017, Dawson specializes in high-value personal property with a focus on musical instruments and music collections. He also has a background in music performance, production, and licensing.
Bryan Hill, CAC
Technical Director, Partner Engineering and Science, Inc.
Bryan Hill has over 20 years of experience in environmental consulting and industrial hygiene, including 15 years focused on wildfire response and post-disaster services. As a California Certified Asbestos Consultant, he specializes in indoor air quality, hazardous materials management, and environmental risk assessments related to climate disasters. His hands-on experience in wildfire zones brings a critical perspective to property assessment and recovery."
Some notes. I was hoping to get a copy of the slide deck so I didn't take a lot of notes.
Immediately after the fire rents and home prices briefly went up as people quickly grabbed needed rentals and homes. Those prices came back down quickly. Manhattan Beach went up 15% temporarily. Some higher priced rents went from $15-$25K/month. There was really no price gouging enforcement in the higher range.
There are about $75 billion in insured losses and $100B uninsured.
It'll take probably 5-6 years to build back after fires based on past fires.
Most hard lumber comes from US. Most soft lumber comes from Canada. We have wood in US.
We may not have enough local labor to rebuild. They will come from surrounding counties. Building construction was previously down because of interest rates.
US made products and businesses will be raising prices also when non US prices get higher from tariffs. It's human nature.
Some areas in Altadena will need extra soils reports to rebuild because of landslide zones. They will need extra reinforcement for same reason. (same with Palisades)
Smokers = Homes which survived fire but have interior smoke damage.
It costs about $30K to clean a smoker home.
Attics are contaminated from ash, dust, char from fires besides heavy metals like lead. Lead max level is 10 micrograms. Lead dust can come in through the best windows because of drainage holes and the intense winds.
Fire debris is removed by the wet method to limit dust for this reason.
Palisades land value going down as more supply comes on the market.
The best architectural properties in Chicago were built after the Chicago fire of 1870. Maybe same will happen in Palisades.
Insurance presentation
Insurance forms HO3 most common. HO4 is for renters. HO5 is to replace the home and contents combined.
Cash value is replacement value minus depreciation. Antiques are valued differently as they have already been depreciated all the way.
Insured must prove loss as part of insurance contract. They must provide photos, videos, appraisals of lost items or the claim will be denied. You can appraise item after the loss if you have photos. Videotape, photograph your possessions, home every six months to a year. Keep that in a safe place in case of fire. The cloud? It's best to itemize high priced items on insurance application ahead of time.
You don't get the insurance home replacement value until you actually replace the home and have receipts. (Obviously you can take insurance money and not rebuild. You just need to make sure mortgage is paid first. You may owe taxes unless you buy a new home depending upon state and your tax situation.)
Insurance prices have risen from about 40-80 cents a sf to $1-2 today for commercial property.
The insurance company uses a software system to calculate value based on size and materials.
Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.
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