- Cover Cause of Loss
- Full Extent of the Damages
- Compliance with Contractual Obligations
- Read your Policy
- Additional Expense Incurred as a Result of Loss
Settling a property insurance claim is not a single event because unless it is a total loss and the carrier is paying the policy limit instantly, the last settlement will be the total of many smaller settlement payments made to the property owner over time. Whether or not the carrier will pay enough to cover the loss is a function of every selection made in the claim. Also, before any settlement is accepted, you must prove these 5 things.
- Covered Cause of Loss
Some causes of loss are apparent such as a wildfire that came down the mountain and consumed the town in its path. However, other causes are not quite as clear. The property insurance policy will tell you what is covered, what is rejected, and if there are any sanctions or revisions that change the language in your policy. Review it carefully, keeping an eye out for provisions that can be read more than one way because courts agree these uncertainties favor the policyholder. Remember, in the most common types of homeowners or property owner policies such as an open-perils policy, the coverage is presumed for all losses that are not specifically excluded- which means the language of the exclusion must match your loss accurately. Sanctions that do not match cannot be used to exclude coverage. On the other hand, if you have a named-perils policy, the cause of your loss must be named specifically in your policy, or coverage is excluded.
- Full Extent of the Damages
Trying to figure out the full extent of your damages can be a challenge. An example, a kitchen fire can release smoke, soot, and toxic fumes all the way through a house. Proving the full extent of the damages rapidly becomes a question of what all is damaged, how badly, whether it can be cleaned, repaired, or must be replaced, and at what cost? The answers to these questions depend on whose interests are being served in the process, the property owners, or the insurance carriers. If you want it to be yours, you will need to provide evidence of your claim, including the documentation of the loss independent assessment of the damage to the home/building(s) inventory of the personal property determination of what should be replaced vs. repaired damage hides, too. Water damage can result in mold damage. Soot can collect in ductwork, walls, flooring, etc. Even the smallest piece of the charred wood left in a wall can produce a noxious, long-lasting odor that pushes its way back into the room through the tiniest of openings. If the insured or the contractor discover any additional damage, make sure it is documented then provide your insurer with additional evidence of your need and cost to repair or replace the additional damaged property.
- Compliance with Contractual Obligations
A homeowners insurance policy is a legally binding contract between the insurer and the insured. Both have a series of contractual obligations that must be met following a loss. Failure to meet these obligations can lead to claim delays and denials for the policyholder, or breach of contract and bad faith lawsuits for the insurance carrier. All homeowner’s insurance policies require policyholders to take reasonable steps to mitigate their damages. Contact the police if you think a crime was committed. Provide your insurer with prompt notification of your loss. Cancel any debit or credit cards that were damaged or compromised.
- Many more. Read your policy.
Valuation Reflects scope of damages and costs to repair or replace. Things can get very intense when the carrier provides its first lowball valuation of the damaged home or personal property. Certainly, it will appear to be a very thorough response to the loss. It will be calculated using industry software, and it will likely catch a lot of insurance policy jargon- ACV, RCV, standard/ recoverable/ non-recoverable depreciation, and more- in the offer. Do not be distracted by the display. Valuation is a highly subjective arena, and the result tells the truth about who the numbers favor. The insured has every right, and indeed the obligation, to provide the carrier with their own documented scope of loss and valuations of the damages.
- Additional Expenses Incurred as a Result of your Loss
- Most policies provide coverage for the additional costs that may be incurred as a result of the loss. This type of coverage goes by many names — Additional Living Expenses, Loss of Use, Additional Costs Incurred — and is restricted by either a time or monetary limit.
