| 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.
The clearer your descriptions of the loss the better you're chances are of getting the fairest settlement. You do this by simply creating your own Statement of Loss.
Use the forms or make your own. They will help verify the circumstances of the loss and identify all of the costs involved.
Later, in Step 3, you will learn about the Proof of Loss. Remember, your Statement of Loss and the Proof of Loss are two different types of information. Consider the Statement of Loss as your description of the loss, and the Proof of Loss as the insurance company's verification. More about the Proof of Loss later.
If you have the forms begin by locating the Statement of Loss form and any other forms you wish to use.You can obtain the forms by going to the "FORMS" page.
The first page should begin with your Statement of Loss form. Fill it in as accurately as possible. Check what caused the loss. For example, the fire and smoke from the peril, and the water used in putting it out. Be sure it is covered by your policy. If you are not sure simply contact your agent.
Give a brief description of the loss by describing the area affected, the type of damage, and how extensive the damage is.
Under Additional Information check the boxes indicating any other information you are including.
Take photographs of all the damages. They provide positive proof to substantiate your claim. If any damaged articles must be moved to a safer location get a picture before moving them. The photos do not need to be color. In some instances black and white pictures are much more effective. Photos should be taken as soon after the loss as possible. For claim purposes it is best to photograph only the damaged areas. Take pictures from several different positions; standing directly in front, shooting from the sides, close-up shots as well as distant shots.
After you have taken the photographs choose which ones will best emphasize the loss and provide the clearest measure of damage. Discard any photos that are too broad or do not depict the damages accurately. On each photograph have a caption, describing the view, the damages and the date the photograph was taken. Be sure to have two copies made, one for the insurance company and one for you to keep in your personal file.
If a neighbor or friend has witnessed the loss or is familiar with your household they may be willing to assist you in documenting the loss. A brief statement made by such a witness will help to verify the damages and substantiate your claim. Their support also indicates to the adjuster that the claim is well documented and complete.
If your loss was caused by theft, arson, vandalism, or other crime call the police and have it documented as soon as possible. Explain in detail the events and circumstances surrounding the incident. Request the Police Report Number, you will need it later for the insurance company.
If your claim is a result of such a crime usually the insurance adjuster will request a recorded statement from you. This may add to the stress of your loss so be sure you have plenty of time to prepare for the adjusters questions. A competent adjuster will be sensitive to your emotional state, provide you plenty of time, and limit his questions to factual information relating to the loss only.
Fire department reports are your best evidence for describing the nature and cause of the catastrophe. If the fire department was involved request a copy of their report. If the fire department sends you a bill include it in your Statement as well.
Include your Emergency Work Statement and any receipts from Step 1. If the adjuster has already paid for this work include it any way and make a notation that it has been paid.
Your Personal Property Summary should include all the personal possessions that were affected by the loss. When complete, it should list the cleaning and repair costs, or the replacement cost and the actual cash value for each item.
For larger losses use a camcorder to record all
the damaged contents. Later, you can review the tape on a VCR and put everything in
writing. If possible, have someone else filming while you are showing damaged items and
describing damages. Not only will this method of documentation create a more complete list
but you also have clear proof to refer back to if needed.
The worksheets help to itemize all the damaged property, room by room. For each item determine the cleaning/repair costs. If it must be replaced calculate the replacement cost and actual cash values.Use the "ACV CALC" page for your calculations.
BOX 1. Next to the name of the item, in Box 1, indicate the quantity of items. For example, if six dining room chairs were destroyed include all six. This space may also be used to indicate the style, model number, or note any distinguishing feature.
BOX 2. Determine whether the item can be cleaned and/or repaired. If it is damaged beyond repair do not fill in this space, go to box 3. If it can be repaired write the costs here. Estimates for cleaning and repairs can be obtained from restoration companies, appliance repair shops, furniture refinishing companies, dry cleaners etc. If the price for such repairs is less than the Actual Cash Value or Replacement Cost use it. Why? Because the adjuster will only pay the lesser amount as stated in the policy. If the item is not restorable and must be replaced go on to Box 3.
BOX 3. To determine the replacement cost find the current price of the same or similar item in new condition. This can be done by searching through advertisements, contacting distributors, or pricing the items in catalogues. If you have Replacement Cost coverage and the adjuster refuses to make payment until after you have purchased new items you are still entitled to the Actual Cash Value immediately. In either case, you must know how much the new item costs. It will be used to calculate the Actual Cash Value.
Boxes four through eight calculates the Actual Cash Value. An easier way to calculate the Actual Cash Value is by going to the "ACV CALC" page. After each calculation write the amounts on your worksheets.
In Box 4, Age, record the amount of years since you purchased the destroyed item.
BOX 5. From the depreciation schedule, indicate the Annual Depreciation. If the item is not listed on this sheet determine the amount of years the item would, under normal circumstances, be functional. Then divide the amount of years by 100. The result is the Annual Depreciation. For example, if the usefulness of an item is five years, divide 5 by 100, the result is an annual depreciation of 20 percent.
BOX 6. Multiply the Age (Box 4) by the Annual Depreciation (Box 5) to get the Total Depreciation.
BOX 7. Multiply the Total Depreciation (Box 6) by the Replacement Cost (Box 3). The result is the Depreciated Cost of the item.
BOX 8. Subtract the Depreciation Cost (Box 7) from the Replacement Cost (Box 3) to get the Actual Cash Value.
BOX 9. Multiply the Actual Cash Value (Box 8) by the Quantity (Box 1) to get the total Actual Cash Value.
BOX 10. If you have Replacement Cost coverage, multiply the Replacement Cost (Box 3) by the Quantity (Box1) to get the Total Replacement Cost.
Once you have completed these calculations you can subtotal the Clean/Repair Costs (Box 2), the Actual Cash Value (Box 9) and the Replacement Cost (Box 10).
This procedure may seem complicated and tedious at first but once you have calculated the first few items it becomes very easy.
The Personal Property Summary provides a space for subtotals of each of the worksheets. Add the subtotals together in each column.
When these calculations are complete you will have an accurate and thorough price list of all your affected personal property. With this the insurer will have all the information needed to pay this part of your claim. If proof of price is required include repair quotes, advertisements, and any other documentation that verifies price.
Remember, often times the insurer will hold back the full Replacement Cost until they receive some form of proof of purchase or ownership. When you have been reimbursed for the balance of the replacement cost for each item check it off your list.
In order to be sure that the same materials are used in reconstructing your home as you had prior to the loss make a list of them. Later you can provide a copy of this list to the contractor and have it included in his bid.
Identify anything that could be substituted for something of lesser quality, or items that could be overlooked during restoration work. If you have high quality plumbing fixtures for example, be sure they are not replaced with contractor's grade. "Contractor's standard grade" or "contractor's special" items are usually the least expensive priced.
Model numbers, quality, and manufacturers' names are useful here. Take photographs of the old items. If you have receipts from the original items and warranty papers keep them together with the photos. You may need to refer back to them at a later time.
Restoration contractors can be found by looking through the yellow pages of your local telephone directory, by word of mouth, through local advertisements or through building supply outlets. Whatever method you use it is completely up to you but make sure that you have at least three different contractors bid on your restoration. This may take some time and effort but it is vital for reaching a fair settlement.
Contact these firms at your earliest opportunity. Depending on the size of your loss it can take a significant amount of time before a bid is completed and the sooner you have it the better. Arrange for each contractor to meet with you individually and schedule your appointments so that you will have your Structure List complete before the meeting. That way you can provide the contractor with a copy to use in creating his bid.
Be sure to explain to each contractor that his bid should include; all charges relating to the repairs; the starting date and completion date, and the terms of your restoration agreement. With these issues in mind he can create his bid accordingly.
Later when the contractor returns with his bid you can go over it with him and check that everything is included in his list of repairs. While you are reviewing the bid have the contractor fill in your Contractor's Bid Form. Attach all the paper work together and number each page. (Example 1 of 4, 2 of 4, 3 of 4 etc.)
Is the company reputable, responsible and qualified? Do they appear to be trustworthy? The best way to determine this is by doing a bit of research on each company. It will save you from many potential problems in the future. At your first meeting with the contractor ask questions that can later be independently verified.
References: Ask for business references such as suppliers, subcontractors, etc. Check these accounts to determine if they are current and in good standing. Ask for a couple of recent(or current) jobs the contractor has had and the names, addresses of his client.
Restoration Experience: How long has the contractor been in business and what experience has the company had in restorations of damaged property?
Insurance Experience: Has the contractor done insurance work before? Which companies? Knowing that the contractor is on an insurance company's approved list can be an indication of the contractor's reliability, but also his partiality.
If you decide to use a contractor that was referred by the adjuster be cautious. It is a double-edged sword. On the one hand, the contractor may have the ability to get past many of the insurance company's brigade of stop-gap measures and directly to the decision makers. On the other hand, the contractor may be willing to accept an adjuster's insufficient scope of repairs in an effort to win the contract and obtain more restoration contracts in the future.
Subcontractors: What sub-contractors will be used at your residence? Does the contractor have a good business relation with his subcontractors? Subcontractors will be the first to tell you how reliable the contractor is in paying for there services.
If the contractors bid is to include cleaning and repairs of your personal property be especially cautious. Many restoration companies will subcontract these cleaning and repairs to others. Be sure their subcontractor specializes in cleaning and refurbishment of property which has suffered the type of damages you incurred. For example, if you had smoke damage to clothing and fabrics a special treatment is required. The smell of smoke does not wash out. Ozone treatment is used. It is the only method that will thoroughly break down the chemical composition of creosol, the pungent smell of smoke. For walls and furniture special chemical sponges must be used. The cleaning company should be familiar with the use of these methods.
Licensed: Most states require that the contractor be licensed. Ask for the contractor's license number and verify it with the state contractor's board. Does the contractor have separate licenses for electrical work and/or plumbing work? If he does not refer back to "Subcontractor's" and find out who he will be using.
If the contractor does not have the required licenses stay away. A restoration agreement with him may not be upheld since he is working outside state regulation. Further, you may be unprotected if anything happens on the job, including accidents, failure to perform, payments to sub-contractors etc.
Bonded/Insured: Is the contractor bonded and insured? Verify this with your local building permit department or state contractor licensing board. Ask them what the expiration date is on the contractor's liability insurance policy.
Better Business Bureau: Call your local Better Business Bureau to check if there have been complaints filed against the company by dissatisfied clients.
Emergency Contact Numbers: Ask for the supervisor's remote phone number or pager number. Call the contractor's business office to determine when and how they respond to your inquiries and requests.
Starting/Completion Date: Ask the contractor when restorations can begin and what date will they be finished. Will he put it in writing? This is one of the most often overlooked items and yet one of the most important.
The differnece between "Contractor Bids" & "Contractor Estimates": Within the insurance industry, the term estimate is sometimes loosely, and wrongly, used to mean bid. A bid is a contractor's offer to perform work for a specified price. Your acceptance of his bid creates a legally binding agreement.
An estimate is much different. It is simply a figure that the estimator believes is correct. It has no promise to perform as the bid does. Remember, a reasonable bid made by a legitimate contractor will always be a safer bet than an adjuster's quick estimate.
Contractors normally do not charge for their bids. However, an estimate is another matter. The contractor will want to be compensated for his time when writing an estimate (and rightfully so). If the adjuster has recruited the contractor to prepare an estimate be sure his bill is sent to the proper place, the adjusters office.
Once the scope of repairs is agreed upon between you and the contractor a bid can be created. An accurate bid is a product of thorough research and cost assessment. This includes researching materials, labor, scheduling, legal requirements and financing for the job. The list below shows a few of the various factors a good contractor will consider before writing a bid.
Materials:
Locate and price materials.
Provide suppliers with measurements, etc.
Obtain suppliers' bids.
Labor:
Provide sub-contractors with list of required repairs.
Receive bids from sub-contractors.
Scheduling:
Check for delivery of materials.
Schedule work of employees and sub-contractors.
Estimate inspection dates.
Legal:
Check: zoning, local ordinances, community or residential by-laws.
Investigate building codes, apply for building permit.
Financing
Prepare supplier accounts. Negotiate payment with sub-contractors.
Evaluate each of the following conditions to determine which contractor will be most suitable for your restoration.
How do the contractors compare based on your initial research?
What differences are there in the contractors' scope of repairs or bids?
Which special materials, manufactured goods or other items listed in the bids are most similar in kind and quality to those listed in your Structure List.
Most important, how do the bid prices compare in scope of repairs?
Once you have decided on which contractor to use you can begin negotiations for settlement with the insurance adjuster. The insurance adjuster naturally will want to pay the lowest bid. However, as indicated above, there are always other factors besides the price to consider.
Note that the insurance company, through its adjuster, is responsible to determine the extent of damages, evaluate coverage, and make payment on the claim. However, the adjuster does not contract directly with the general contractor. And he does not make any guarantees regarding the contractor's workmanship. The insurance company has a legal obligation to cover the costs for restoration only. If a subsequent problem arises between you and the general contractor you can be sure the adjuster will not be there to help resolve any problems. The only protection you will have at that point will be based on your agreement with the general contractor.
Debris removal is normally handled by the contractor. However, check to see if it is spelled out in the contractor's bid. If the contractor does not have the equipment necessary to remove it you will need to contract others.
Contractors seldom do landscaping work. If you have plants that were destroyed contact a nursery or landscaper. Check your policy to determine whether your plants are covered and for how much.
If the damages to your residence (or any part) prevent you from using it you are entitled to its Loss of Use. Providing it is your primary residence, you have two options here. You can either claim for Additional Living Expenses or for the Fair Rental Value of the affected premises.
Additional Living Expenses are those expenses that you would not otherwise incur but for the loss. This includes moving expenses, temporary housing, additional costs for food, etc.
Fair Rental Value is the amount one would pay to rent the damaged premises prior to the loss. This includes not only that area of the residence that you reside in, but also any area that you rent to others.
Don't forget that these expenses are covered only for the time it takes to repair the damages or for your household to permanently relocate.
| Air Conditioner 8% | Fan, electric 12% | Ironing Board 10% | Radio 10% |
| Awnings 20% | Firearms 5% | Refrigerator 5% | Cassette Player 10% |
| Bedding Supplies | Fishing Equip 5% | Stove 5% | CD Player 10% |
| Mattress, Springs 5% | Furniture |
Toaster 12% | CD's 75% |
| Blankets 10% | Upholstered 10% | Kitchen Cabinets 4% | Roofing |
| Sheets 20% | Wicker 20% | Kitchen Utensils |
3 ply hot mop 10% |
| Bicycles 20% | Chrome & Glass 15% | Pots, Pans, Cutlery5% | Asphalt shingle 5% |
| Boats 10% | Metal 5% | Dishes 20% | Wood shingle 4% |
| Books 5% | Furnace 5% | Chinaware 5% | Cedar shake 7% |
| Calculator 10% | Garden Tools 10% | Ladders 5% | Metal 5% |
Carpets |
Golf Clubs 10% | Lawn Equipment |
Scale (bathroom)10% |
| Low Grade 15% | Hair Dryer 12% | Mowers (power) 20% | Sewing Machine 5% |
| Medium Grade 10% | Heater (elec) 12% | Mowers (manual)10% | Ski Equipment 20% |
| High Grade 8% | Iron 20% | Mowers (riding) 15% | T.V. 10% |
| Superior Grade 5% | Jewelry |
Edgers (electric) 15% | Tennis Racket 20% |
Clocks |
Dress 8% | Light Fixtures |
Tools |
| Electric 8% | Costume 20% | Lamps 10% | Hand 5% |
| Grandfather 3% | Kitchen Appliances |
Lamp Shades 10% | Power 12% |
| Clothing 25% | Blenders, Mixers 12% | Inset lamps 5% | Toys (childrens) 25% |
| Curtains 20% | Can Opener 10% | Luggage 5% | Vacuum Cleaner 12% |
| Dishwasher 12% | Coffeemaker 12% | Medicines 35% | Washer 10% |
| Drapes, Blinds 8% | Freezer 5% | Musical Instruments |
Water filter sys 12% |
| Dryer 12% | Frying Pan (elec) 12% | Piano 4% | Water Heater 10% |
| Equestrian Equip 8% | Knife (elec) 12% | Guitars 5% | Water Pump 10% |
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.
