WHAT TO DO IN CASE OF A FIRE

What the building's insurance will not cover are improvements or "betterments" — alterations to an apartment done by the resident before the fire. The building will repair walls, for example, but not pay to replace pricey wall covering. If flooring needs to be opened to dry the subfloor, the building's insurance will pay for new wood and the installation but not elaborate finishes. It might provide a new refrigerator or a sum equivalent to the cost of a basic model, but the resident and his or her homeowners' insurance pay the balance for a higher-end model.

Homeowners' insurance is designed to cover only the contents of an apartment that might be damaged or lost to the fire. If a resident has no homeowners' insurance or not enough coverage, he or she is free to sue the person deemed responsible for the fire, in which case "they would need to hire a lawyer who specializes in this," says Steve Greenbaum, director of property management at Mark Greenberg Real Estate.

If the coverage on collateral damage to an adjacent apartment was merely insufficient, which is not uncommon, it is up to the two insurance companies to duke it out in a process known as subrogation — the back and forth between insurers until a settlement is agreed upon.

The best homeowners' policies cover temporary housing. That was the case with 240 East Houston Street in Manhattan, which recently caught fire. The husband of board president Christine Stokes had the presence of mind to call their insurance company quickly on the night of the fire to see how to proceed; as a result, they had a hotel to stay in within hours. If the building or another party is found to be liable for the fire, the resident's insurance company will attempt to recover the payout for temporary housing from the responsible party.

After the Fire, Call Emergency Restoration

Immediately following a fire, you need to be sure the managing agent is onsite, helping displaced families gather what belongings they can. Although condo and co-op boards have no legal obligation to provide housing, many may see it as a moral obligation to assist the temporarily homeless and shell-shocked residents. Displaced residents pay no maintenance or common charges while they are out of their homes, and the co-op or condo's insurance covers the loss of income. Residents and management should take photos to document what might be useful down the line.

The first call after 911, however, should be to an emergency restoration company, whose job it is to do damage control. These are the operations that come in to mitigate water and smoke damage. "Our basic task is to dry out the building because the longer you wait, the more damage it will do," notes Barry Swidler, owner of American Fire Restoration, which responded to a fire at the condo at 240 East Houston Street on Manhattan's Lower East Side.

Pumping out quantities of water is only the first step; dehumidification and mold remediation follow, as does tending to fumes. "We had air movers there for weeks and weeks," Swidler says. The bill for the services was roughly $250,000.

Removing debris or knowing when to preserve it is also part of a restoration company's brief. According to Dennis Melandro, owner of Long Island's Tri-State Restoration, which responded to the Georgetown Mews blaze, rubble and broken glass must be cleared for safety, but everything needs to be sorted out to see if it is valuable and insurable.

"If we can't identify it, we don't throw it out," says Melandro. "We don't want to throw out anything that could have caused the fire — the investigation part of the whole disaster is crucial."

Next page: Security Needs and Collecting on Insurance >>