A house fire is absolutely devastating, and the difference between the claim you thought you would get from the insurance company and the one you actually receive can make it even worse. Some homeowners make the mistake of assuming that the first number they get is the final offer when, really, it is the company staking out a bargaining position.
They hope you accept it, but brace for a fight if you think you are not receiving what you are owed under the policy. In order to maximize your claim and get the full amount you are entitled to, you need to know what your policy is supposed to cover. Hiring a public adjuster or an insurance lawyer can really make a difference here, as they know the tricks of the trade, and they make the claims process smoother and quicker. They understand how common coverage endorsements are supposed to work and can analyze your policy to look for other coverage options the insurer may overlook.
Otherwise, you will need to know your policy’s precise coverage before you begin to negotiate your claim or begin a dispute. Here are a few things to consider, along with your details, policy limits, deductibles, and other information pertaining to your individual policy.
Structural Damage
Structural damage accounts for a large portion of claims after a major fire. Structural damage refers to the cost of fixing or replacing elements of your home, such as the exterior walls, roofs, flooring, foundation, electrical, plumbing, and more. If the home is totally destroyed, it needs to be rebuilt altogether.
Other buildings or structures on the property may also include sheds, gazebos, docks, fences, and more. Review your policy for more information if you’re unsure what it covers. When you get the offer from your insurer, you want to know how far it will go towards covering the essential damages.
To get an idea, ask a local builder for a quote and compare this to the insurer’s offer. Often, the quotes obtained by insurance companies are from restoration contractors, who may not specialize in custom-built homes if that is what you had. They also have ways of keeping costs low, meaning the insurer will only approve their budget even if you want to use your own contractor who has quoted a higher amount.
Personal Belongings
Before receiving insurance coverage for damaged belongings and personal property, you need to create a Schedule of Loss documenting everything that is non-restorable as a result of the loss. This must be done methodically and carefully since there’s a lot riding on it.
It’s common for homeowners and the insurance company to not see eye to eye on the valuation of your belongings, so any proof you can provide, like receipts, can really help. Insurance companies routinely apply high depreciation rates to your contents, and will only give you that depreciated value unless you replace everything with the exact same item. They may also question whether you owned some high-value items if you do not have proof of them.
Whether you have an actual cash value or replacement cost, a home fire insurance policy will also impact your claim.
Living Expenses
After a house fire, it may need repairs or to be replaced altogether. It could be dangerous and impossible to occupy soon after, and you’ll need to move your family elsewhere. This will necessitate other additional expenses you would not incur had the loss not happened, related to transportation, take-out food, clothing, and more.
You could also have ongoing associated costs like mortgage payments and property taxes, which could strain your finances. Additional living expenses cannot cover these payments as you normally have to pay these without the fire. It is any necessary expense in addition to what you normally spend in a day that can be attributed as a direct result of the loss. For example, if your house burned down, you would have to stay in a rental home in the next town. The additional mileage you now take to work or to school can be claimed. Your insurance policy will not cover mortgage payments as that is your obligation whether a loss occurred or not.
If there’s ever a time you aren’t in the mood to deal with the fine print of paperwork, it’s after your home catches fire. Read your policy coverage closely before that happens, or hire an insurance lawyer as a professional advocate for your interests.
