Homeowners insurance after fire loss
TJM Consulting, LLC
Fire claims can be the most devastating losses an insured can experience. Whether it is your residence, business, commercial building, or other property it is difficult to know where to start when this occurs. Damages incurred by a fire include the fire itself, smoke and soot, water used to extinguish the fire and damages caused by the fire department in gaining access to extinguish it. This is truly a confusing time.
Following are fire insurance claims tips that will make sure you get on the right track immediately:
Make sure you protect your property from further damage by boarding up windows and doorways. If the property is severely damaged you may want to consider erecting a fence to keep people away and protect remaining contents. This is a fundamental responsibility of the homeowner or business owner and required by insurance companies as a policy condition that must be met before payment will be considered.
File a claim as soon as possible and insist that the insurance company handle this loss immediately. The sooner you start the process the sooner you will get paid and can begin rebuilding your life. When dealing with the insurance company make sure you keep detailed records of all conversations, site visits, reports, letters, and any expert services they decide to hire, such as engineers, contractors, etc.
Get a copy of all fire and police department’s reports on the fire. The insurance company will require this to make sure there was no evidence of foul play.
Request an advance of funds from your insurance company for temporary living expenses. After all you just lost basic necessities and will need temporary housing as well. Simple things that we use everyday was lost in the fire such as soap, washcloths, clothing, coats, briefcases, etc.
Actively involve yourself in determining the extent of the loss. Make a list of all personal property that was damaged, determine approximate dates the items were purchased and assign an original cost. See attached personal property inventory template. (Determine if your personal property will be replaced using actual cash value or replacement cost.) Take photos of all damaged items. If you lack the knowledge hire an estimator to determine the cost of restoring your building if it was not totally destroyed. (The insurance company will do this as well but do not rely on their estimate as they will attempt to reduce their costs as much as possible)
Keep detailed records of all your living expenses including cost to purchase clothes, cleaning services, housing, meals, and any other items necessary as a result of not being in your own home. Keep in mind the insurance company will only reimburse you for expenses that exceed your normal living expenses. For example if it cost you $5,000 a month while in your home and you spend $7,000 monthly you will be reimbursed $2,000. It is important that you keep track of all your living expenses while living in temporary quarters. Even if you decide to stay with relatives or friends ask them to provide you will receipts for what it may cost them to house you during this time.
When you begin the process of rebuilding your home make sure you keep all contractor receipts and other material costs that you may lay out. Keep detailed records as all items are reimbursable. Keep in mind that “Actual Cash Value” policies entitle you to rebuild your home and replace contents to its pre-fire fair market value while “Replacement Value” policies entitle you to rebuild your home and replace contents regardless of the value of what was lost. It is always better to have Replacement Value policies.
During the process of restoring your home continue to pay your insurance premiums. Keep in mind that the liability part of your insurance is still in force and you do not want discontinue coverage. Someone could still get hurt on your property as a result of an accident. You may want to ask your insurance company to adjust the cost of insuring the home portion of your insurance policy to reflect the fact that the building structure is not present. Just make sure that contractors are carrying insurance to cover the building during the construction phase. Remember to replace the building part of coverage once the property is restored.
Insurance companies would like nothing better than to close your claim. They will send you a check and state that acceptance of the check is final payment on the claim. This is total nonsense. Should this happen accept the check but write a letter to your insurance company stating that the check does not represent final payment as there may be damages not known yet that will be discovered and you reserve the right to claim them as part of the overall fire claim. Send the letter certified return receipt to ensure that they in fact received it. Keep in mind that damage not known during the settlement process may arise that you are completely justified in requesting payment for. In fact this is a common occurrence and you should be mindful that supplemental claims are not uncommon.
Hold back depreciation money. Should you have a replacement cost policy it is very likely that the insurance company will hold back depreciation on the physical assets of your home. This is common practice and could amount to as much as 30% of the claim. You are entitled to this money once the work has been completed but you must show the insurance company a) the completed work and b) payment was made to the contractors. Producing the necessary documents will cause the insurance company to release depreciation holdback money to you. With this in mind I suggest you hire only reputable contractors to do the work on your home. Make sure you receive detailed proposals on the work contractors will do so you can justify all costs to the insurance company. That work must coincide with what was agreed to as damaged property as a result of your claim. Additional work done will not be paid for by the insurance company. Should change orders be necessary as a result of new damage discovered you must give the insurance company an opportunity to see the damage before repairs are made. Not doing so may cause them to deny additional charges. When the work is completed the insurance company will require receipts and often canceled checks showing payment was made to contractors. Once this is done you will receive your holdback depreciation check.
Seriously consider hiring a public adjuster to represent you during the entire process. This will make your life easier and much less stressful. Let someone else do the battling for you and make sure you are made whole. TJM Consulting Public Adjusters operates in New Jersey, Pennsylvania and Florida. If you are in any of those states please give us a call. We will handle the entire process described above including reporting your claim, making sure policy conditions are met, (hiring remediation company, securing the property, requesting advances, assisting in finding suitable housing, obtaining contractors and making sure you receive final payment. TJM Consulting will get you more for your claim then you can get on your own sometimes as much as 30 - 70% more. Let us handle the stress for you. You need to get your life in order and make sure your family or business is back to normal.
Final tip is simple. Should you have any questions at all concerning your fire insurance claim fill out the request form below or simply call.
88 Peppergrass Drive South
Mount Laurel, NJ 08054
214 19th Street South
Brigantine, NJ 08203