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With the most recent wildfire
catastrophe occurring here in Southern California many
concerns arise for homeowners regarding what to do after a
loss and whether they are insured for an adequate and
sufficient amount. A loss can be a very tragic event and other then doing
the obvious, one may not know what to do afterwards or how the
claim process works. The following article was written by our
very own Wes Bannister addressing these concerns. Be
sure to read 'Actual Cash Value vs. Replacement Cost'
to have a better understanding of what the two mean and how it
can affect you.
What To Do When A Loss
Occurs by Wes Bannister
If you have a fire in your home
the first thing to do is make sure everyone is safe and out of
the home. The second important thing is to let the fire
department know your home is on fire. The third
important thing is to let your insurance company know about
your loss. Those three things are logical, and most
people follow them automatically. However, after you
have done those three things, what do you do next?
A fire in your home is a
tragedy. Even if small in nature, it can cause damage to
your personal belongings, your structure, and your ability to
continue your normal life in that home for a period of
time. Smoke and water damage, not to mention the damage
done by the fire fighters to vent the fire and put out the
flames, can be dramatic.
One of the first things your
insurance company will do is to assign an adjuster. The
adjuster's job is to work with you to help you get relocated,
if necessary. The next assignment is to work with you to
determine the damage to your property and its value.
You will generally be asked by
the adjuster to fill out an inventory form to list the items
lost or damaged and to assign a value to each. If you
were prepared, you will have an inventory of your personal
goods already completed and stored in a safe place, other
than your home. However, if you are like most of us,
you will not have a complete inventory prepared and ready to
hand to the adjuster. Maybe you will have the next best
thing, either pictures or videos of your home, with open
drawers, closets, and cabinets to view the contents. We
strongly recommend to everyone to either take pictures of your
belongings or video record your belongings. Taking an
inventory of all your possessions by means of pictures or
video camera will be such a big help to you and the adjuster
at the time of a loss. These will be for your use,
primarily, to mentally reconstruct your loss. Nothing is
harder to do than looking at a pile of ash and trying to
remember what it represents in the way of property! Be
sure to keep these records offsite and in a secure area.
Once the adjuster has your
inventory of your personal property, a bid or two from
contractors to repair or replace your real property, the
adjustment will proceed. If you have a homeowners
policy, much if not all of your costs to relocate to new
living quarters would be covered. The adjuster will then
total your loss and make an offer for settlement. If
accepted a check will be prepared to you and to your lender,
if there is one, equal to that amount.
However, the payment is not a
final settlement of your loss. If you remember items
that were forgotten or inadvertently omitted, you can request
a supplemental loss settlement that reflects their
value. Also, much of the loss payment for property will
be based on actual cash value (replacement cost less
depreciation). If you have the all important endorsement
of replacement cost for personal property attached to your
policy then as you replace the items, the additional cost will
be paid to reflect the replacement cost of the loss.
When you do receive your settlement from the insurance company
you'll want to pay close attention to the wording on the check
to see if it says "full and final payment of any and
all". If this wording is on the check and you cash
the check then this would be your acknowledgement of final
payment. So, be sure that you don't endorse a check that
has this wording if you are still in the process of
determining your settlement.
It is important to work with
your adjuster to finalize the loss. They are there to
assist you and the insurance company in making you
"whole" and indemnified. If there are
disagreements in values, items lost, or coverage, your agent
can assist you in reaching an agreement of settlement.
We have provided you with a
detailed inventory list that can assist you in valuing all
your personal possessions. Again, this can be extremely
helpful and beneficial to you and the adjuster at the time of
a loss. The inventory list has been provided by one of
our insurance companies, Allied Insurance. Please feel
free to use this as a guide in determining the values of your
property.
Home Inventory List (Provided
by Allied Insurance)
Actual Cash Value
vs. Replacement Cost
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