Property loss: an insurance property lawyer’s step-by-step guide on what to do when disaster strikes

When it comes to a fire, a flood or some other disaster, working with your insurance company is a key aspect of recovering from the loss.

Contacting the broker or insurer to report the damage is one of the first to-do items to get the ball rolling toward recovery. Emergency support should be quick to come for those who have been put out of their homes and need the basics such as a place for the night, food and clothing. The insurance company can even provide a cash advance. Most policies also include provisions for longer-term alternative living arrangements, if that’s deemed necessary.

First steps

The first step an insurer is likely to take is to dispatch a field representative or adjuster to assess the damage. That needs to be done quickly so that any problematic issues, such as drywall that’s sustained water damage, can be removed to prevent molding.

It’s a good idea to get a copy of your insurance policy and review it to know exactly what is covered and what is not. An experienced insurance property lawyer that handles property loss claims can advise the homeowner on any potential coverage issues, policy limitations and exclusions so they know what to expect. Having that knowledge early can be helpful if there’s a dispute with the insurance company later on.

Proof of loss

The next step is completing the proof-of-loss document, which involves a detailed accounting of every item that may have been in the house — and assessing the value of each one. This can be a tedious and difficult exercise for a homeowner who has just suffered a big loss and whose life has been turned upside down, but it’s important to be specific and thorough

The insurance company may ask for receipts of big-ticket items like jewelry. If the receipts are lost, in a fire, for instance, the insurance company may ask for photos of the item or of you wearing that particular piece of jewelry to prove ownership.

Independent adjuster

It can be overwhelming for a homeowner to consider every detail of an item — the brand, model number and current value. That’s where hiring an independent adjuster can be useful. This is an individual who knows the process and can help itemize and substantiate the loss, often at amounts much higher than the insurance company’s initial offerings.

An independent adjuster will likely think of things the homeowner hadn’t considered when assembling the proof-of-loss document and they know the right questions to ask. That could go a long way in determining the replacement costs.

They also have the experience to determine whether anything can be recovered from the smoke or water damage — a couch, for instance, might be salvageable through cleaning. Typically, an independent adjuster will have a network of contacts available to help with the overall process of what can be a daunting task.

The rebuilding phase

As the proof of loss is being completed, the insurance company is looking at the scope of work to be done. That involves demolition, followed by repair or remediation and the actual rebuild. The insurer will rely upon engineering reports and have its own contractors determine what needs to be done.

After the insurance company’s contractors have submitted a quote for the scope of repairs, the insurer often provides an offer to the homeowner outlining how much it will pay for the repairs or rebuild.  These offers are often on the low end of the scale — both for the value of the structural repairs and the contents being claimed. An experienced lawyer and/or independent adjuster can serve as a second set of eyes helping to assess what the insurance company is offering and whether that reflects the insured’s true entitlements under the policy by reviewing each line item.

Items missed during the initial assessment may be captured when a homeowner seeks a second or even a third quote. Reviewing the overall scope of the damage may reveal that smoke remediation is necessary between the walls or mold might be developing and needs to be addressed.

Comparing the statement of work the insurance company proposes to what your own contractor determines is necessary could reveal missing objects. The faucets may have been left out of the estimate for the bathroom repairs. Or the painting of the walls after the repairs were completed wasn’t calculated into the insurer’s quote. Those small items, when added up, could be significant.

Working toward an agreement

This is where a schism between the two sides may appear. Your own determination of the value of the losses may be far different from what the insurance company is offering by way of compensation. And your assessment of the scope of the work to be done, determined through your contractor, may not match what the insurance company says needs to be done. The insurance company may also argue that the policy limits what it will pay for certain items or repairs.

After reviewing the insurance policy and the coverage the homeowner is entitled to, the insurance property lawyer can point out what the insurance company is required to do and what additional entitlements there may be in the policy, ensuring all the bases are covered.

Once that agreement is made with the insurance company and you’ve either accepted their offer or signed off on their contractors doing the work, it’s very difficult to seek compensation for things that may have been missed later.

The umpire

If the parties are at an impasse regarding the scope of the repairs and the work that needs to be done, they can go before an umpire, who acts much like an arbitrator reviewing those proofs of loss leading to an award. When the insurance company fails to follow the decision of the umpire, litigation is the remaining option.

Lawyers typically become involved when coverage of a significant portion is denied or if there’s a dispute over the cost of the repairs. At that point, it’s likely been several months and no work has been done. A lawyer that has become involved early in the process will know the issues and concerns and can quickly proceed to limit further delays.

If you have experienced a property loss and would like to explore your options, contact the property damage lawyers at Edwards Pollard LLP for a free consultation.  We would be happy to assist.

Request a Call