A house fire can be a life changing event that no person should ever have to endure. If you happen to find yourself in this unfortunate situation, it's very important to advise the insurance company of the fire as soon as humanly possible. Here are five critical steps you should know and take after suffering fire damage to your property.
1: Know Your Policy and You're Coverage Limit:
Larger fires will consume most household items. The policy refers to household items as Contents or Coverage C. Along with furniture, clothing, and the like; this usually means that your insurance policy has burned or has incurred water damage beyond reading. It's very important to obtain a replacement copy of your policy and the declarations page. This task can be completed by visiting your agent's office or asking the insurance company adjuster that inspects your damages. Review your policy declarations page for the amount of coverage limits you are insured for under the main categories of your policy.
Look For:
- Coverage A: The amount listed under Coverage A will be the primary amount of coverage for your building or home.
- Coverage B: This amount is the amount of coverage you have for any out-buildings or items on your property. Items like sheds, pools, fencing, etc. This limit is usually calculated at 10% of your Coverage A limit. So, if you have $200,000 worth of coverage on your home, you will have $20,000 in coverage for Other Structures.
- Coverage C: This is the amount of coverage you have for all your Personal Belongings, known as Contents. In summary, contents is everything that would fall out of your home if you flipped upside down. Items like furniture, clothing, linens, utensils, electronics, etc. This limit is usually calculated at 70% of your Coverage A limit. So, if you have $200,000 worth of coverage on your home, you will have $140,000 in coverage for Contents.
- Coverage E: This coverage amount is the limit you have for Loss of Use or Additional Living Expense (ALE). This coverage is for your loss of the use of your home when it is not livable. You may need rent a home or live in a hotel while repairs to your home are being completed. This temporary housing may be 30 more miles away from work than normal. That will incur more fuel, which in turn is an additional expense over and above your normal expenses of living. This limit is usually calculated at 20% to 30% of your Coverage A limit. So, if you have $200,000 worth of coverage on your home, you will have $40,000 to $60,000 in coverage for Loss of Use or Additional Living Expense (ALE).
Many homes and businesses are grossly underinsured. If happen to be one of the unfortunate who find out that you are underinsured after you suffer a loss, you should still be prepared to fight. Most people would think - "If I'm underinsured then they will just write a check for my policy limits." Shockingly enough, it doesn't really work that way. Most insurance company adjusters will still undervalue or lowball your property damage in an effort to pay less than what is actually owed on most fire damage claims.
2: Get It All In Writing
It is very important to have everything involved with your claim documented. Have your contractors provide all estimates in writing. Having quotes and estimates that detail the complete cost of replacing or repairing your home from qualified professionals will go a long way in proving the amount of fire damage you have suffered.
If your clothes are being cleaned at the dry cleaner, get a complete and detailed list of the costs, including tax, shipping, etc. Generate a list with descriptions of all your damaged items, like clothing, furniture, bath and kitchen goods, children's toys, household items, electronics, etc. Ask each individual family member to generate a list of personal items that have been damaged as well. Working together as a family makes this task much easier. Fewer items will be forgotten and left off the list as well.
If you can't remember all the cost for all of your items, you can request information from your Credit Card Company and the retail shops where you purchase items to assist and help calculate the true replacement costs of your personal items. It's also a good idea to walk the isles of stores where you often shop (Wal-Mart, Macys, JC Penny, Sears). This helps to rattle your memory of the items you owned prior to the fire damage.
3: Document, Document, Document
Your policy will most likely have Coverage E - "Additional Living Expenses." If you are in situation where you need to pay for living arrangements during the time your property is undergoing repairs, it's very important to keep all the receipts. They may include lodging, meals, travel, and a slue of other purchases that are a result of the fire damage you suffered. Keep all theses receipts and documents from the time of the fire until your building or home is repaired or replaced. Do not mail the actual receipts to your insurance company. You must keep the originals for yourself and mail the copies to the insurance company incase they become lost in the mail.
It's very important to document and keep detailed notes of all correspondence and conversations you have had with any and all insurance company representatives. Organize everything in a note book, ring binder, and pocket folder to keep organized. Every time you discuss any part of your claim with anyone; obtain and document the persons name, their phone numbers and extensions, their job title, and any supervisor's names. This data is crucial when insurance representatives, contractors, or anyone else begins to contradict themselves.
4: Don't Sign Or Authorize Anything
Many insurance adjusters will request that you to sign a release before they will release any payments for your fire damage claims. However, you are not required to sign a release or any other document in order to collect any undisputed funds. The insurance company is required to release to you the total amount that they believe it will take to put your property back to the condition it was prior to the loss... even if you do not agree with that amount. If your insurance company requests that you sign a release, ask them to submit in writing the reasons for requesting such an authorization. Always be extra cautious about signing a release and potentially signing away your rights.
5: It's YOUR Choice and YOUR Decision
It's your property, it's your policy, and it's your money. You are in control, because you have paid for the coverage! You do not have to accept any insurance company recommended or authorized contractor to do the fire damage repairs to your home. You are not required to agree with or accept the insurance company's estimate. You must be aware and protect yourself from low-ball estimates from the insurance companies and their insurance friendly contractors.
You should always obtain your own estimates from professional contractors for the repairs involving fire damage claims. It's important that you compare your contractor's estimates with the ones provided by the insurance company. At any time if you feel as if you're not being treated fairly or that the insurance company may be trying to lower their costs at your expense, then follow the "Appraisal Clause," in your policy. (See more information on how to use the Insurance Appraisal Clause in the event you disagree with insurance company using the links below.)
You must educate and protect yourself. You may be unpleasantly surprised to find out that you're NOT "in good hands," there is no one "on your side," and they are NOT there "like a good neighbor."
(C) Copyright of Insurance Claims Group, Inc. & Joseph P. Brennan: Joe Brennan is President and owner/operator of Insurance Claims Group, Inc., a national independent adjusting, appraisal, and umpiring firm. Joe has been in the property loss business for more than 24-years. Mr. Brennan is highly educated with the appraisal process and has acted as an appraiser and umpire on dozens of fire damage claims.
Get your Insurance Appraisal Questions Answered FREE! No cost, no obligation, I will answer your questions. Mr. Brennan can be reached at;
Insurance Claims Group, Inc.
2054 Kildaire Farm Rd., Suite # 426
Cary, NC 27518
Ph: 919-669-9111
Fx: 919-573-9595
See more Fire Claim Tips.
Copyright of Insurance Claims Group, Inc. & Joseph P. Brennan: You may freely republish this article, provided the text, author credit, the active links and this copyright notice remain intact.
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