Fire Insurance Estimates

When a fire substantially damages a building, there are basically four estimates of damage the homeowner will need to prepare. Each one of these estimates is commonly associated with a policy Coverage. The four coverages found in the Homeowners 3 Special Form policy, HO 00 03 04 91 are Coverage A - Dwelling, Coverage B – Other Structures, Coverage C – Personal Property, and Coverage D – Loss Of Use. Each one of these coverages has limits and may have sub-limits. An Ordinance or Law endorsement is also commonly found on most homeowner's policies. If this endorsement is contained in your policy, you will have an additional coverage to pay for loss due to the enforcement of any ordinance or law regulation the construction, repair, or demolition of a building or other structure. When preparing your fire estimate, the following information may be helpful.

Coverage A & B - Dwelling & Other Structures
Many times the damages under Coverage A & B are grouped together. While the insurance company should prepare this type of estimate for you, it has been my experience that the insured should prepare their own estimate. However, this type of estimate can be complex, and it should be completed by a professional. Items in each room should be listed and broken out in great detail. Not only should all the burnt and chard items be categorized and priced, additional consideration should be given to other items, which were exposed to the intense heat. Some items may not have been even been damaged by the direct heat of the fire, but they did sustain significant smoke damage. If these items cannot be cleaned, they will have to be replaced. It is very important to create a proper estimate the first time around.

Coverage C – Personal Property.
Most policies require the insured to prepare their own estimate of damages for this coverage You are required to give a description of the damage items, determine what it will cost to replace the item, and determine the actual cash value of the item. When the loss is large, this task can be challenging and somewhat intimidating. You may be wise to seek professional advice on how to get started. For more advice about handling personal property after a fire, see Service/fire.

Coverage D – Loss Of Use
This coverage pays for any additional living expenses you incur while your home is being repaired. Additional Living Expense, meaning any necessary increase in living expenses incurred by you so that your household can maintain its normal standard of living. You will need to keep all receipts for the expenses you incur. You should also realize that many insurance companies subtract the regular expenses you are no longer incurring from the total amount of additional living expenses you do incur.

Ordinance or Law
This endorsement will allow for an additional amount of insurance under Coverage A. and sometimes Coverage B. This endorsement will only pay when the insured is required to comply with a law, ordinance, or building code and when the expenses incurred are above and beyond that which has already been allowed to complete the repair. If your house is at or is approaching a total loss, this coverage should be taken into consideration at the very beginning of a claim. This coverage needs to be documented before demolition.See more about Ordinance or Law

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