After ensuring you and your family’s safety, one of the most important issues to following an earthquake, fire or other disaster resulting in damage to your home or property, is properly presenting your damage to your insurance company. It is your responsibility to assert your claim. Your insurance agent will not telephone you and ask whether you suffered a loss. Often, the process of filing and settling an insurance claim is frustrating. However, if you are well informed about the applicable insurance regulations, you can avoid many of the pitfalls.
Here is a ten step outline for presenting your property insurance claim. These ten steps are not the exclusive outline for presenting your claim, since every claim is different.
Call your insurance agent immediately to report your claim
As soon as possible after the loss, contact your insurance agent to report the claim. Some insurance companies do not have readily available agents, and in that case, call the company directly. Record the name and title of the person to whom you spoke. Once you have contacted the insurance company and reported the claim, send a follow-up letter confirming that you have reported the claim.
Photograph or video all damage and write an inventory of all damaged property.
After reporting your claim, but before doing anything else, photograph and, if available, videotape your damaged property. Be as complete and detailed as possible. If you have personal property which has been damaged or destroyed; prepare a detailed inventory listing the property and the type of damage sustained. You can give a copy of your photos, videotape and inventory to the insurance claims representative on your first meeting. Remember to keep several copies for yourself. If you have receipts of purchase of the damaged or destroyed property, provide them to the insurance company.
Don’t throw away any damaged property until the insurance company has inspected it.
The insurance company has a right to inspect the property and, because you will ask them to reimburse you for the value of the damaged property, the insurance company should have an opportunity to look at it before you throw it away. If property has been lost or destroyed and cannot be located, the insurance company is not released from its responsibility to pay. Keep in mind, however, that any item which is missing is more difficult (but not impossible) to claim. It is better to keep the pieces of destroyed property to show your insurance company. Ask your insurer if they want your destroyed or damaged property or to tell you when you can throw damaged or destroyed property away. If an insurance company refuses to give you instructions, write them a letter giving a date in the future on which you will discard the property if you do not hear from them. Sixty days is reasonable, but be sure you send the letter registered mail so that you have a record of it.
Keep a log of contacts and communications with you insurance company.
It is a good idea to keep a diary on the claim and record your contacts with the insurance company and anyone else relating to your claim in the calendar book. When you call or meet with the insurance company or schedule a meeting (even if it is canceled), document your contacts. If you are ever asked at a later time to reenact or explain events that happened during the claims process, the diary will be invaluable.
Communicate with your insurance company in writing, and confirm telephone conversations with a letter.
Confirm important conversations with your insurance company representatives, sending a letter restating everything that was discussed during the call. This serves three important functions: (1) it creates a record of what transpired for future reference; (2) it gives you an opportunity to explain your understanding of any conversation; and (3) it invites the insurance company to respond if they disagree.
Ask your insurance company to communicate, keep you informed and timely process the claim.
Your insurance company is required to take certain actions within required time periods. It is even obligated to inform you if it cannot respond on time and must provide you with a reason for why. If an insurance company is not keeping you informed or not diligent in responding to your inquiries or adjusting your claim, you should write and document its lack of responsiveness.
Be wary of signing a release of your claim without consulting an attorney.
Be very careful about agreeing to close your file or completely settle your claim. An insurance company may ask you at some point during the handling of your claim to complete a “proof of loss” form. These are quite common and if requested you must comply. A proof of loss form is signed under oath and requires you to be truthful in stating the total amount of loss. You are perfectly within your rights to limit your response by adding the word “partial” or the phrase “known as of today,” or other language that makes it clear that you are not limiting the claim. Insurance companies are prohibited from requiring you to sign a form releasing them from any further responsibility or liability in order to pay undisputed amounts.
The insurance company must independently adjust your claim. This means that if you believe your claim is worth $150,000 and the insurance company believes it is only worth $75,000, the insurance company must pay you the $75,000 and allow you to dispute the full value of the claim, without requiring you to sign a release.
Know when to contact a professional to help present your claim. A demand that the insured sign a release is something that may warrant consulting an attorney.
Know when to ask for help in determining damage to your property.
Insurance policies will often include coverage allowing you to hire an expert, like an engineer or other professional, up to a certain dollar limit, at the insurance company’s expense. If there is a disagreement, demand that your insurance company allow you to hire your own professionals to evaluate the claim. Even if the insurance policy does not include a provision allowing you to hire a professional and the insurance company is retaining a professional, ask if you can participate in the selection of the professional. If they suggest someone, make sure that the professional is not someone who makes a living off of insurance companies. Contact the suggested professionals, ask about their business and try to determine if they really provide services to the general public or mainly to insurance companies. Many times professionals who mainly evaluate damages for insurance companies make unrealistically low damage estimates.
Verify any proposed estimate submitted to you by the insurance company.
A claims adjuster or an insurance company-retained contractor may prepare an estimate of what it will cost to repair your damaged property. Neither of them will ever do any actual repair work on your damaged or destroyed property and, therefore, it is quite convenient for them to set an estimate even if is not realistic. Be sure to find out if the amount of money offered by the insurance company is sufficient to take care of your problem. If you believe that the amount is insufficient, make sure that the insurance company understands that you consider the amount an initial payment only, and promptly contact a professional who will help you determine exactly what it will cost to fix your damaged property.
Know all deadlines applicable to filing a lawsuit before the expiration of any statute of limitations.
Many insurance policies in California have a one year suit limitation period which has generally been interpreted to mean a lawsuit must be filed within one year after your claim has been concluded by the insurance company. However, insurance companies may subtract from this one year period the time it took you to discover the damage and then report the claim. Once the limitations period expires, the insurance company will almost always take the position that it has no further obligation to you, no matter what your losses may actually be. (This area of the law is very complicated and you should retain a qualified attorney if you are unsure of any time limitation.)
These ten steps are simply an outline of possible pitfalls in presenting your property claim. Each claim is different. Using your common sense, asking lots of questions and staying proactive in your claim will help ensure that you obtain the best possible results.