Duties After Loss

You are required to perform specific duties under your policy of insurance.  Failure to meet these obligations may jeopardize your claim. The following is an example of Duties After Loss found in one policy and some general advice. Your policy may contain different language; read your policy closely.

1. Give prompt notice to us or our agen
2. Notify the police in case of loss by theft:
3. Notify the credit card, electronic fund transfer card, or access device company in case of loss as provided for in E.6. Credit Card, Electronic Fund Transfer Card Or Access Device, Forgery And Counterfeit Money under Section 1 - Property Coverages:
4. Protect the property from further damage.  If repairs to the property are required you must:
   1. Make reasonable and necessary repairs to protect the property; and
   2. Keep an accurage record of repair expenses
5. Cooperate with us in the investigation of a claim;
6. Prepare an inventory of damaged personal property showing the quantity, description, actual cash value and amount of loss.  Attach all bills, receipts and related documents that justify the figures in the inventory;
7. As often as we reasonably require:
   1. Show the damaged property
   2. Provide us with records and documents we request and permit us to make copies; and
   3. Submit to questions under oath and sign and swear to them;
8. Send to us within 60 days after our request, your signed, sworn proof of loss which sets forth , to the best of your knowledge and belief:
   1. The time and cause of loss;
   2. The interest of the "insured" and all others in the property involved and all liens on the property;
   3. Other insurance which may cover the loss;
   4. Changes in title or occupancy of the property during the term of the policy;
   5. Specifications of damaged buildings and detailed repair estimates;
   6. Inventory of damaged personal property described in 2. e. above;
   7. Receipts for additional living expense incurred and records that support the fair rental value loss; and
   8. Evidence or affidavit that supports a claim under E.6. Credit Card, Electronic Fund Transfer Card Or Access Device, Forgery And Counterfeit Money under Section I - Property coverages: stating the amount and cause of loss.

While the majority of the homeowners' insurance policies address the Coverages, Conditions, and Responsibilities of the insurance company, this section addresses the responsibilities and duties of the insured after a loss.  Failure of the insured to perform these duties can potentially reduce or even negate insurance coverage that would otherwise be available. 

The following are general suggestions and are not all inclusive of how the insured should respond in every case. 

1.  Give prompt notice to us or our agent;

You are required to notify your insurance company or agent promptly after a loss.  Insureds who do not sustain significant damage to their property sometimes put off notifying their insurance company until others who did sustain much more significant damage have an opportunity to submit their claim. While this way of thinking is benevolent, it may put you at risk in receiving full coverage for all your damages. Place your claim promptly and let the insurance company prioritize the inspections.

4.  Protect the property from further damage.  If repairs to the property are required you must:
a.  Make reasonable and necessary repairs to protect the property; and

b.  Keep an accurate record of repair expenses

You are required to protect your property. A common practice after a fire is to have the house boarded up. This action may reduce your exposure to liability in the event someone enters your damaged home uninvited.  This is not the insurance company's responsibility.  They do not have to send a contractor out to keep your property from being damaged further. You must do this.  A common mistake made by some insureds after they suffer a catastrophic loss is to abandon all property at the loss location.  If some of the property is not damaged and you do nothing to protect the undamaged portion of the property which is subsequently damaged by another occurrence, like rain, it is possible that you will not be able collect for these new damages.   If you do take steps to protect your property and another occurrence causes a loss, this newly damaged property should be covered since you made the effort in good faith to protect covered property.

Additional factors to consider are:

Did you protect the property in a timely manner and did you do an adequate job to protect your property?  You cannot be required to personally perform any temporary repairs for which you are not qualified or capable; you may select a qualified, licensed contractor to perform these duties.  

The cost for temporary repairs has to be reasonable.  What is reasonable after a storm?  You can bet it will cost more to tarp a house after a storm than what it would have cost before the storm hit. The answer to what is reasonable may not be cut and dry.  One contractor might charge $750.00 to board up a house, and yet another contractor might charge $1,100.00 to board up the exact same type of house.  In reality, either of these charges might be considered reasonable by your insurance company.  What may not be reasonable is for another contractor to charge $9,000.00 to perform these same services. Before you hire a contractor to do some temporary repairs, you may want to get a bid and ask him if his cost is comparable with the majority of the other contractors in the area performing the same services. Your insurance company may not have to reimburse you for the full cost to do temporary repair if they can prove the cost was not "reasonable".    You should be aware that the cost you incur for temporary repairs does not increase the policy limit and will limit the amount available to make repairs.

Keep all receipts for repair costs you incurred. Try not to pay in cash, but if you do pay cash - get a receipt for the services on company letterhead.  Keep a written log of the hours you spend doing your own repairs, cleanup, and demolition work.  The insurance company usually owes you a fair reimbursement for your labor.  Be careful to include only the actual time spent working. You may not be reimbursed the full hourly rate cost a professional would have charged if it takes you four times longer to perform the same work.

5.  Cooperate with us in the investigation of a claim;

Your policy probably does not define the word cooperate. If you find that you are not able to comply with a request made by your insurance company, you may considrer speaking with a professional. 

6.   Prepare an inventory of damaged personal property showing the quantity, description, actual cash value and amount of loss.  Attach all bills, receipts and related documents that justify the figures in the inventory;
Anyone who has been through a large loss knows that the stress that follows destruction can be nearly as devastating as the initial loss.  There are several things you can to do to help minimize the distress of dealing with the aftermath of disaster.   Before disaster strikes, you can document electronic and computer equipment with photos and recording of purchase date, price, and serial numbers.  Don't forget the contents of your shed, including mowers and tools.   Also, overall photos of the rooms and contents of your home can be invaluable.

After the disaster, a spiral notebook in which you record all disaster related expenses, hours and type of work done, temporary repairs, and details of conversations with your insurance company and contractors will prove invaluable to you.   Save all receipts for repairs and replacement of personal property.  It may help to tape them to a page in your notebook with an adjacent handwritten explanatory note of the item being replaced.  Then, correlate this item with the item number on your insurance company's personal property inventory list.  Do not take a chance of losing your notebook; submit photocopies of any information needed by your insurance company.   

You need to create the personal property inventory sheet for your insurance company. (An example of a detailed personal property inventory estimate has been proved for your review. A blank personal property inventory sheet has also been provided for your convenience and use.) You will need to list how many of each item was damaged, describe the damaged item, the cost to replace the item, and its age. The age of these damaged items are used to determine Actual Cost Value. If your damaged items were old but in excellent condition, make this very clear to your insurance company. Remember the cost to replace a damage item now will usually be higher than what it originally cost. 

7.  As often as we reasonably require:
a.  Show the damaged property
b.  Provide us with records and documents we request and permit us to make copies; and

c.  Submit to questions under oath and sign and swear to them;

You have to allow the insurance company to inspect your property as often as they feel is necessary in order to complete your claim. As long as they give you at least 48 hours notice before they inspect, it is usually best to allow the re-inspection. It is probably best not to deny the insurance company access to your property without first speaking with your attorney. 

You can be required to deliver records and documents. This requirement is not specific as to what records and documents.  Never claim or suggest that you have written information if, in fact, you do not possess it.  ALWAYS BE TRUTHFUL.

You and your spouse may be required to answer questions under oath in separate examinations.  Your reply to these questions might be evaluated for consistency and accuracy.  It may be wise to obtain legal counsel before attending any E.U.O.  (Examination Under Oath) meetings.

8.  Send to us, within 60 days after our request, your signed, sworn proof of loss which sets forth, to the best of your knowledge and belief:
a.  The time and cause of loss;
b.  The interest of the "insured" and all others in the property involved and all liens on the property;
c.  Other insurance which may cover the loss;
d.  Changes in title or occupancy of the property during the term of the policy;
e.  Specifications of damaged buildings and detailed repair estimates;
f.  Inventory of damaged personal property described in 2. e. above;
g.  Receipts for additional living expense incurred and records that support the fair rental value loss; and

h. Evidence or affidavit that supports a claim under E.6.  Credit Card, Electronic Fund Transfer Card Or Access Device, Forgery And Counterfeit Money under Section I – Property Coverages: stating the amount and cause of loss.

If required by YOUR insurance company, send them a Sworn Proof of Loss.  Some policies require the insured to submit a Sworn Proof of Loss after a loss.  Other policies simply say send us this proof within 60 days after we request it.  IT IS IMPORTANT TO KNOW WHAT YOUR POLICY REQUIRES.  Some insurance companies have Sworn Proof of Loss Form which meets their criteria.  This form must be completed fully, accurately, and within the specified time limit.  You insurance company may require specific information (see list above) which must accompany the Proof of Loss.  Submission of the information required by the insurance company is critical.  You are required to submit a detailed building estimate. This could entail many pages of single spaced line item details.  (An example of a detail estimate has been provided for your review.)  A copy of individual estimates from contractors may not be sufficient if they are not detailed. You will need to submit a copy of the personal property estimate outlining the quantity, description, and actual cash value of the items claimed. (An example has been provided.)  You will need to attach photocopies of all bills, receipts, and related documents that justify the figures in the inventory. To submit a valid building estimate and a comprehensive personal property inventory list as outlined in the policy may be more that what the average policyholder can provide immediately after a catastrophic loss.  If you fail to provide this documentation within the proper time period, or fail to provide all necessary documentation, you may jeopardize full recovery of your claim. 

Confirm with your agent that your policy covers Additional Living Expenses.  Keep a detailed record and receipts for all of the additional expenses you incur such as hotel expense, restaurant bills, trips required to secure the damaged property and attend to pets.  Remember, these are additional costs paid above your normally incurred expenses and those required to maintain your standard of living.  Keep in mind that the insurance company will compare your expenses against your established standard of living.  Consider keeping all the receipts in a notebook or binder with an explanatory note to yourself regarding each.

If your insurance company has hired a Cause and Origin Investigator to assist them in determining how the fire was started, you should give me a call right now. There is no charge to speak with me for this initial call.  Even if you do not hire me, I might have some good advice you could use.