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BBQ hot dogs, not your home
HAPPY FOURTH OF JULY! We hope you enjoy the fireworks. You deserve it. However, if you have a neighbor who loves illegal fireworks but has really, really, bad aim, you may soon have the need to report a homeowners insurance claim for fire damage. If so, we have you covered. Below are a few tips for you.
FIRST TIP – IGNITE THE CLAIM PROCESS ASAP
Insurance companies and their policies require that you provide immediate notice of the claim. When you call them, be prepared to provide them a short statement as to what happened. Don’t go on and on though. Be brief and stick to the facts like:
- Date of loss
- Brief description of how you think it happened
- Description of the damage, including location
- Description of the damaged contents
When you report the claim, consider prefacing your short statement with phrases like, “it appears”, “based on my initial inspection, and “from what I can tell”. Here’s why: you don’t want to limit supplementing your claim if additional damage later becomes apparent. For example, there may be non-obvious damage related to the fire like the presence of carbon fiber that is hazardous to health or soot/smoke damage in your a/c duct system for example.
SECOND TIP – LOCATE YOUR POLICY
The last thing you need, aside from fire damage due to your annoying neighbor’s fireworks, is a frantic search for your insurance policy. At the very least, you should locate the declarations page. This is essential to understanding your policy coverages, coverage limits, exclusions, deadlines, etc. Therefore, send a written request for a certified copy of your policy to your insurance company. Also consider sending a request for the policy to the agent who sold you the policy.
THIRD TIP – IT’S ALL IN THE PRESENTATION
Don’t throw anything away or allow anyone to remove property because it is damaged. Make it available for inspection first. While the insurance company gets around to inspecting the damage, begin preparing a detailed list of any personal property that was damaged or that you suspect may be damaged.
While preparing the list or “inventory”, know whether you have “replacement” coverage or “actual cost value”. Let’s say your neighbor’s bottle rocket went through your master bedroom window and damaged your collection of Christian Louboutin or Salvatore Ferragamo shoes. If you have replacement coverage, then the insurance company should fully reimburse when you buy the latest but similar Ferragamo or Louboutin shoes to replace those that were damaged. However, if the policy provides for “actual cost value,” then you would be limited to recovering what the damaged shoes were worth right before the loss. Therefore, if those shoes were old and worn, then you will likely be compensated accordingly, if at all.
FOURTH TIP – TRACK YOUR EXPENSES
If you had to move out after the fire, track living expenses such as: 1) hotel expenses, 2) extra gas, 3) laundry, and 4) meals. Policies generally cover the costs of additional living expenses that you incur when your property sustains a loss and you have to move out. The key word here is “additional”. Additional refers to the difference between what it cost you and your family to live on a daily basis at your home prior to the loss and what it cost afterwards, while you were out.
FIFTH TIP – GET ORGANIZED
After you report the claim, expect an avalanche of documentation, policy language, phone numbers, names, dates, titles, and times to sort through. You should be ready to take notes during every phone call with the insurance company and preserve all correspondence/documentation related to the claim, including fire department reports, police reports, invoices, bills, receipts, permits, contracts, and photographs.
If the claim ends up in litigation, you should know that memories tend to get hazy. For example, the insurance company adjusters may forget what they said to you, what you told them, what they observed during their inspection, what documents they received and reviewed from you in support of your claim, etc. If you properly document and preserve all evidence relating to your claim, your legal professional can use it to help the insurance company representative(s) fill in the gaps and increase the likelihood of success at trial or mediation.
SIXTH TIP – TOOLS OF THE TRADE
Your insurance company has a few tools to assess your claim. Three of these tools include the recorded statement, the sworn proof of loss, and Examination Under Oath.
The recorded statement is basically a recorded interview. Generally, these questions are designed to provide the insurance company with more information as to what you believe caused the loss, what you did immediately after the loss to mitigate the damage (for example, did you call the fire or police department?), who was involved, and the timeline/sequence of events. Again, stick to the facts. Don’t use the recorded statement as an opportunity to voice your frustration, discuss fundamentals of insurance law, or discuss your love of Ferragamo shoes.
The sworn proof of loss is a document often requested by insurance companies and required under the policy. Basically, this document contains the amount you are claiming. You generally do not have to use the form provided by the insurance company. However, the proof of loss needs to provide the information requested under the policy and be notarized. You should also submit an estimate in support of the proof of loss. An improperly prepared or notarized proof of loss may limit or preclude your recovery.
Without getting into too much detail, an examination under oath is essentially a deposition and equally as fun, if you are a masochist. If you receive a request for an examination under oath, that would be a good time to seek immediate legal consultation. Avoid going to one without proper representation. Contrary to what the commercials tell us, insurance companies are not your good neighbor.
SEVENTH TIP – BE THE BIG ANNOYER
Insurance companies are under a duty to investigate your claim in good faith and to respond to your requests for information, status updates, etc. Therefore, if you feel like your insurance company is dragging their feet, be the big annoyer. Send frequent, written requests for updates.
If they send you a payment, send them a letter or email thanking them for the payment and advising them that you do not consider the claim to be closed. Unless your insurance adjuster was your long lost brother or sister, there is a chance that the payment is insufficient. Therefore, don’t be shy about letting them know, in writing of course. If the check indicates that it is in full satisfaction of the claim, you can generally proceed to chuckle under your breath, cross out the language, and deposit the check.
If 90 days has passed since you reported the claim and the insurance company hasn’t made a decision, demand an explanation in writing and consult a legal professional. Barring extenuating circumstances, insurance companies are legally required to render a coverage decision within 90 days from the date you report the claim.
EIGTH TIP – THE MORE YOU KNOW
Don’t start rebuilding until you know your rights and options. You do not want to be in a position where you start the rebuilding process then discover additional damage or otherwise require additional repairs that you were not aware of or compensated for prior to commencing the rebuilding process.
Recent Fire Claim Settlement
We recovered over $1 million dollars for homeowners that sustained significant fire damage to their home. The homeowner called the fire department, even the local news station was involved. After several months of investigation, a recorded statement, and a proof of loss, the insurance company tendered full policy limits to the homeowners.