| INSURANCE CLAIM |
Disclaimer The information, forms, and techniques herein represent the author's opinions only and is not legal advice. Any and all advise given herein is not legal advise. The information and forms provide general educational information only. If legal or other expert advice is required by the reader, the services of a competent attorney, accountant, insurance agent, or other professional should be sought. The information, forms, etc. come without warranty of any kind, either express or implied, including but not limited to implied warrantes for quality, performance, merchantability, or fitness for any purpose. The author shall not be liable to the user or any other person or entity with respect to any liability, loss, or damage caused or alleged to be caused directly or indirectly by this information, forms, etc.
Copyright © 1992 Michael L. Smith, Revised 1998, 2000 All rights reserved. No part of this publication (except forms) may be reproduced or transmitted in any form or by any means, electronic or mechanical, without permission in writing from the author. The forms may be printed out for private, one time, use only. Any and all commercial use of this site, without prior agreement, is strictly prohibited. All copyright infringements may result in severe penalties.
An insurance adjuster's expertise is in the area of policy interpretation and negotiation. He is trained in investigating causes of loss, determining liability, identifying costs of restoration through others, and negotiating settlement.
There are two types of adjusters used by insurance companies. The company adjuster, referred to as claim representative, and the independent adjuster. Both represent the insurance company but from different positions.
The company adjuster, also known as a claims representative, is a paid employee representing the insurance company's interests by settling claims fairly and expeditiously. Usually working out of the branch office or a local claims office, this person is responsible for handling a specific type of coverage. In most claims offices each department is broken down by the type of coverage, that is, auto, homeowner's, medical, etc. Each adjuster will have a designated territory for which he is responsible. At times your agent may also act as adjuster but only on smaller claims that are less than $1,000.
An independent adjuster is one who contracts with an insurance company to represent the companies interests. Usually an independent adjuster will adjust claims for several different insurance companies at the same time. Most states require that independent adjusters be licensed to prcatice.
A branch of independent adjusting is Catastrophe Adjusting. When there has been a catastrophe that causes a substantial amount of insurance claims to be filed insurers rely heavily on independent adjusters to provide immediate claims assistance. These people are generally well trained and experienced in emergency situations and are experts in additional living expenses (ALE), emergency building ordinances, local labor and material price fluctuations and availability, governmental habitability requirements, and other disaster related issues.
If your agent hasn't already done so, call the insurance company and arrange for a preliminary meeting with the adjuster. Most states require that he meet with you within ten days. Remember to write down all dates on your log.
Your first meeting should be used to establish a good rapport. Remember first impressions are hard to break. Get to know as much about the adjuster as possible. Knowing the adjuster's reputation within the company and industry can also be very helpful. Experienced adjusters are more likely to be members of related trade and training associations as well.
At your first meeting be sure to exchange information such as telephone numbers, availability, and where he can be reached in an emergency.
Insurance companies very often use computers as a method of quick settlement. Remember the maxim garbage in - garbage out. It still exists. Any settlement based on a computer printout is only as complete as the program and the person inputting the claim.
Insurance companies may also use their own in-house structural damage appraisers. These employees have experience in the field of construction and cost estimating. When an adjuster has a structural claim and needs expert advice regarding the extent of damages and reconstruction costs he will have the in-house appraiser called out to the loss. The structural damage appraiser will assess the damages and then calculate a cost for restoration based on local labor rates and material costs.
There are a number of issues to discuss with the adjuster when he arrives. These can be broken down into five categories: A) Policy Coverage, B) Loss Issues, C) Supplement to the Claim D) Additional Living Expenses and E) Proof of Loss.
Claim Number: Ask for the insurance company's claim number. If an independent adjusting company is assigned to your claim ask for their claim number as well.
Coverage Verification: Verify what the deductible amount is on the policy. If needed, confirm the total amount of property coverage including residential building, outbuildings, unscheduled personal property, additional living expenses, any riders or endorsements. Confirm whether you have Actual Cash Value coverage or Replacement Value coverage on your personal possessions. Confirm the total amount of Liability Coverage. This information is clearly stated on your insurance policy. Both you and the adjuster should have the same information. If any discrepancies arise at this point simply compare your policy with the information the adjuster has. If necessary, have your agent involved.
Payees: Confirm with the adjuster who will be named on the insurance draft including your spouse, mortgage company, etc.
Walk Thru: Show the adjuster all your damages. Get his acknowledgment of the damages. If you have completed your personal property summary ask for payment so you can get started replacing your lost property.
Emergency Work: If you have had any emergency work completed, give a copy of the bill or receipt to the adjuster. Request reimbursement or a check payable directly to the Emergency Service firm.
Contractor Solicitation: Does the adjuster intend to notify his own contractor to bid on the restoration? If so, arrange for a time for the three of you to meet and discuss the scope of restorations and a walk-through of the damaged area. It is best to have the adjsuter present when his contractor scopes the loss. This will minimize any future miscommunications, or worse, any lost or forgotten repairs.
Insurer's Option to Repair: Within the policy there my be a provision which provides that the insurance company has the option to make the repairs themselves. This option is seldom used, but in the event it is the insurance company should notify you of such a decision in writing within thirty days from the time you submit your proof of loss. The notice should state that all new materials will be of like, kind and quality, it should indicate the completion date, and the completion date should be within a reasonable amount of time.
If the insurer takes this option, they assume all responsibilities for completion of work. To protect your interests you need to deal with the insurer the same as you would any other contractor. Obtaining there scope of repairs, comparing it with bids from other contractors, signing a restoration agreement etc., must be completed before any work begins. See Step Four, Restoration Agreement.
At times there may be a situation where damages are not obvious or verifiable. These types of damages are called hidden damages. Every effort should be made to discover hidden damages but there are times when it is simply impossible to do so. Examples of hidden damages are; water under flooring or in the walls, charred framing behind walls, melted electrical wiring, broken water lines etc.
If there are hidden and/or uncertain damages that were not accounted for in the original bid and later discovered you will need to contact your insurance company for a supplement to the claim.
Discuss any additional living expenses you may incur and estimate the total. It is standard practice, and legal precedent, that the insurance company provide, in advance, some of these additional living expenses.
Keep notes of all your meetings with the adjuster. You may need them later when you complete the Proof of Loss form or during negotiations. Finally, before the adjuster leaves ask whether his company will require a Proof of Loss form.
Usually insurers do not require a Proof of Loss. If one is required for your claim however don't worry, it will be as beneficial for you as it is for the insurer. If you are honest in your claim, fair in your reasoning, and clear in your communications the Proof of Loss is beneficial. (If you are not honest in your claim don't bother filing one).
The sooner you fill out and return your Proof of Loss the better. It establishes the starting date for settlement. Most state statutes provide that the claim be settled within 60 days from receipt of the Proof of Loss.
Be sure to include your Statement of Loss in the Proof of Loss so that it becomes all one document.
The format of a Proof of Loss form is relatively straight forward. The list below explains what is likely on the form. If you are unsure about any category discuss it with the adjuster before he leaves.
1. NAME, ADDRESS, DATE, PHONE NUMBER.
2. POLICY NUMBER Do not confuse this with the claim number.
3. NAME OF INSURANCE COMPANY Record the name of your insurance carrier, not the agent or adjuster.
4. INSURANCE PERIOD The starting and ending date of your coverage as indicated in your policy.
5. COVERAGE Name of policy and type of protection.
6. AMOUNT The amount of coverage you have on the type of loss.
7. LOCATION Address of the property where the loss occurred.
8. OCCUPANCY Is it your primary residence? If it is not there are different limitations and exclusions.
9. TITLE AND INTEREST This is the Loss Payable Clause. Any other party named on the title of your property or any party having an interest in the property such as a mortgage company should be named here. If there are none, write insured in the blank.
10. OTHER INSURANCE Other insurance companies that you have which cover this loss. Write none if it applies. Do not include companies that do not cover the peril for which you are submitting the claim.
11. CHANGES Indicate any conditions that have changed the insurability of your property since the beginning of coverage. Write none if there are no changes.
12. AUTHORIZED PAYEE Your name, and the name of anyone else having title to the property (i.e., your spouse). From your meeting with the adjuster you will have determined if your mortgage company is to be named on the insurance draft.
13. STATEMENT OF LOSS Attach your completed Statement of Loss. Write SEE ATTACHED STATEMENT PAGES 2 THRU ?. Remember, the Statement of Loss includes your copies of emergency repair bills, receipts, photos, personal property summary, witness accounts, contractor bid, additional living expenses and other documentation.
14. CLAIM AMOUNT Add up the costs and bid price for each part of the restoration from your Statement of Loss. After having added all the sub-totals together subtract the deductible amount as indicated on your policy.
15. DECLARATION After having read through the Proof of Loss print your name in the declaration statement, sign and date it.
Limiting Statements on Form: If the insurers Proof of Loss form includes language such as "Full, Final,and Complete" be cautious. If you beleive there are hidden and/or undiscovered damages such language on the form must be lined out and initialed. It is very important that the adjuster acknowledges that the claim is not limited to the information on the Proof of Loss when there may be hidden and/or undiscovered damages.
Page Numbering: When you have finished the Proof of Loss and attached everything number the document beginning with the Proof of Loss. Count the total number of pages and number each in sequence. Include on each page the total pages. For example, Page 1 of 12, Page 2 of 12, Page 3 of 12, Page 4 of 12, etc. By doing this nothing gets lost or misplaced during settlement.
Accuracy: Having a precise and comprehensive Proof of Loss will work wonders. Before giving your completed Proof of Loss to the adjuster make certain that you have included every foreseeable cost. This will be your only opportunity to do so. If you attempt to add something later it will be difficult.
Record Keeping: By this time you will have accumulated
most of the documentation you need for settlement. These records are vital to your claim.
Remember, make three copies of the Proof of Loss. Keep the original in a safe place for
your own record, give one copy to the adjuster, and use the third as a working copy. If
you mail your Proof of Loss be sure that it reaches its destination by sending it
Certified Mail or Registered Mail.
Disclaimer The information, forms, and techniques herein represent the author's opinions only and is not legal advice. Any and all advise given herein is not legal advise. The information and forms provide general educational information only. If legal or other expert advice is required by the reader, the services of a competent attorney, accountant, insurance agent, or other professional should be sought. The information, forms, etc. come without warranty of any kind, either express or implied, including but not limited to implied warrantes for quality, performance, merchantability, or fitness for any purpose. The author shall not be liable to the user or any other person or entity with respect to any liability, loss, or damage caused or alleged to be caused directly or indirectly by this information, forms, etc.
Copyright © 1992 Michael L. Smith, Revised 1998, 2000 All rights reserved. No part of this publication (except forms) may be reproduced or transmitted in any form or by any means, electronic or mechanical, without permission in writing from the author. The forms may be printed out for private, one time, use only. Any and all commercial use of this site, without prior agreement, is strictly prohibited. All copyright infringements may result in severe penalties.
