I’m a Mill Fire Homeowner. Should I Sell or Keep My Property?

With over a hundred homes destroyed and thousands of residents displaced, many are wondering what they should do now.

First, it is essential to know that if Roseburg Forest Products started the Mill Fire, then one of the claims against Roseburg will be based on “Trespass by Fire.” Trespass by fire would most likely allow homeowners to recover for either their property’s loss in value (known as diminution in value) or the cost of restoring the property to its pre-fire condition, but not both.

Most homeowners opt for restoring their property to its pre-fire condition because they want to see their home rebuilt and the property repaired. However, if a homeowner sells their property before it is rebuilt, they are likely to be limited to recovering only the loss in value. If a homeowner no longer owns the property, they cannot seek to recover the costs of building or cleaning up the property – it is no longer their property, and they would not have the right to either rebuild or clean up.

Below are two examples comparing a loss-in-value claim and a rebuild claim. In both examples, the homeowner had a property that had increased in value to $400,000 but was still only insured for $325,000 as the policy had not been updated in a couple of years. In both hypothetical examples, the home was destroyed by the Mill Fire.

Mill Fire Loss-in-Value Claim

Pre-fire value:                                                                         $400,000

Post-fire value:                                                                       $  25,000

Loss in value:                                                                           $375,000

Amount received from insurance:                                   $325,000

Amount recoverable for loss-in-value claim:             $  50,000

Rebuild Claim

Cost to rebuild:                                                                       $550,000

Amount received from insurance:                                   $325,000

Amount recoverable for rebuild claim:                        $225,000

You can see that calculating a homeowner’s losses using a Rebuild Claim approach results in a much greater number. In short, this is mainly because of the high costs to rebuild.

If a homeowner has a genuine desire to rebuild and to clean up the property to a condition as close as possible before the Mill Fire, then Roseburg Forest Products needs to make that homeowner whole by paying the rebuild costs. Selling a property before it is rebuilt means the homeowner no longer seeks to rebuild and will limit them to claiming the loss in value only.

Many homeowners feel overwhelmed after the devastation of a fire destroys their homes and property. They feel like they will never be able to rebuild, but, if given the money necessary to rebuild, they would. Homeowners who wish to keep their property and rebuild need to work with an experienced attorney to ensure they seek a rebuild claim against Roseburg.