Common Questions Regarding House Fire Insurance Settlements
If I have a house fire, should I wait until after the fire department has stopped the blaze before calling my insurance agent?
No. If possible, call your insurance agent immediately. If you cannot reach your agent, most insurance companies have a toll free number that can be called 24 hours a day. If you get a recording, make a note of the day and time that you left a message.
What should I do after I've notified the insurance company and before the adjuster arrives?
Secure your property if firefighters have finished their work. A fire contractor (sometimes referred to as a "fire chaser") may appear on the scene, even while the firefighters are still present, and offer to temporarily board up your house. The fire contractor may also try to get you to hire him to do the actual dwelling repair.
Before you commit to having any work done by the fire contractor, ask if the contractor is bonded and whether the contractor will agree to accept the reasonable value placed on his services by the insurance company. Do not sign any agreement with any contractor to do the actual dwelling repairs until after you have consulted with the insurance company.
What will happen when the insurance adjuster arrives?
An insurance adjuster is responsible for assessing the damage to your home for the insurance company. The adjuster will take a recorded statement from you, give you an advance so you can buy new clothes, set you up in a rental unit if your house is unlivable, and generally explain the claim process.
Ask the adjuster for a complete copy of your insurance policy if you do not have one since the policy sets out "the rules of the game." Also ask for a copy of your recorded statement and a written list from the adjuster of what steps you need to take to move the claim forward.
What does my homeowner insurance policy cover?
All homeowner policies cover loss by fire. Most policies pay for three types of damage:
- Dwelling loss (damage to the house)
- Personal property loss (damage to your household contents)
- Additional living expenses (the cost of living elsewhere while your home is being repaired)
How is my loss measured?
Most homeowner policies are written on a replacement cost basis, which means that the loss is measured by the amount of money it takes to repair the house or replace the damaged personal property. Some policies are written on an actual cash value basis, which means that the insurance company pays the depreciated value of the damaged item rather than its replacement cost.
Who determines the amount of my loss?
Most insurance companies will prepare a dwelling repair estimate and then provide it to you to forward to a contractor of your choice. The contractor may write his own estimate and negotiate with the insurance company for more money. Some insurance companies have their own lists of preferred contractors, and will guarantee their work.
Most companies require you (the insured) to prepare your own inventory of damaged personal property, and will not provide any assistance other than giving you blank forms to complete. You can complete the forms yourself, but it is a lengthy and time-consuming process.
For an extensive fire loss, it may be worthwhile to hire a professional appraiser or a public adjuster. Some insurance companies will prepare a list of the damaged personal property for you and assign replacement costs and actual cash values to each item, but these lists are likely to be incomplete and the values are likely to be low.
If you allow the insurance company to tell you the amount of your loss, you will probably end up with less than you are entitled to. Insurance companies are not usually overly generous in evaluating your damages.
What is a public adjuster?
Public adjusters are specially trained professionals who are licensed by the state. They represent policyholders only, as opposed to the insurance company adjusters who work only for the insurance company.
Public adjusters are trained to prepare dwelling damage repair estimates and to value damaged personal property. They are generally knowledgeable about the terms, exclusions, and conditions contained in a typical insurance policy, although they cannot offer legal advice.
They generally work on a contingent fee basis; that is, for a percentage of the amount recovered.
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