Fire Loss Insurance Recovery 101
By Martha Collins
My husband and I lost our home in 2008 in the Tea Fire. Here is what we learned.
The insurance company adjuster may not your best friend. S/he works for the insurance company not for you. The more organized and complete your claim, the more aware of what your rights and timelines are, the better chance you have of resolving your claim productively without legal help. This is what you want to do.
Remember that your insurance policy is there to pay for any service and replace any item that would restore your home to a “turn-key” condition up to the limits of your policy. In some cases, for the grossly underinsured, it would be wise to have a phone consultation with an insurance legal specialist to discuss your individual situation.
Philosophy #1: Know and present more detail about each personal property item than the insurance company does. You know your stuff better than anyone ever can!
Philosophy #2: Be as accurate as possible. It should be your aim to exceed the value of the limits of each part of your policy. Hang in there, it feels grueling, but stick to it. It is like a job and being accurate and complete will be like earning a paycheck.
Philosophy #3: Pull together any pictures that you may have on your phone, computer or that your friends and family may have. These pictures will help you jog your memory as well as provide “placement” pictures of your belongings in your home for the insurance company.
Philosophy #4: Remember that personal property is considered to be any item that you could take with you if you had sold your home. You could include the washer and dryer, refrigerator, portable hot tub, a moveable yurt, furniture, rugs, clothes, jewelry, art, music library, book library, cosmetics, medicines, patio furniture, hoses, gardening tools, tool chest items, ceramic pots, etc. Your personal documents including passports, birth certificates, copies of trusts and wills, etc., can be claimed as well when you replace them.
Philosophy #5: You may have a portion of your policy entitled “Other Structures”. This includes irrigation lines, driveway base and surfacing, retaining walls, shed, garage, garden boxes, fencing, etc. Your contractor will help you determine the replacement value of these items.
Philosophy #6: You may have a “Landscape” portion of your policy. There may be a dollar limit per tree. If you had mature trees on your property, ask your contractor to arrange for an arborist or landscaper to come and inventory the size and age of the trees that were lost BEFORE they are removed; use family pictures as documentation. The replacement cost of mature trees is the documentation you need to create a loss on
your annual income tax return. This loss may be sizeable and may be treated as a loss carry forward as well.
Philosophy #7: Some adjusters bring out a construction company as an “expert”. Our experience was that one “expert” was convicted of Worker’s Comp fraud and was doing this consulting for free to work off his community service time; we kicked him off the property. The second “expert” used a computer program to rebuild each room one at a time and did not create a plan of the entire house. If you had a unique feature
like a 60′ beam, or a wooden ceiling, etc., make sure those features are taken into account. Again, NO ONE IS GOING TO KNOW YOUR HOME BETTER THAN YOU DO.
Philosophy #8: You will be exposed to a lot of people who rush to share their own drama with you or tell you they know what is best for you. Please politely excuse yourself and stay focused. Continue with yoga, walks, anything that keeps you centered. This will be a long process.
Philosophy #9: Start a list of the professionals you are going to need. You will need a contractor to clear the debris off your site and stabilize the hillside or area for rains so that you don’t loose the dirt that is left or cause a problem down hill from you. Land Surveyor to stake your property? Architect? General Contractor? Trailer to live on the property while you rebuild? Propane tank? (Your contractor can hook up a pump from your trailer to your existing septic system.)
Philosophy #10: Research everyone you plan to do business with. Everyone, even if you are friends or family. Separate friendship from professional competence; check references! You will also be contacted by a lot green builders, alternative builders, fly by night builders; be careful. Disasters tend to be fertile ground for scams.
Philosophy #10: The PROPERTY TAX TRUTH: Go immediately to the County Assessor’s Office and request that your property be revalued to $100 or $500, what ever is the lowest they will accept. You can keep that status for as long as you are in the active rebuild process. You can keep a trailer on your property if you are in an active rebuild process. SIDE NOTE: your original purchase price will continue to incur annual taxes and increases; when you’ve rebuilt do not think that your “fire value” can be used in a property tax reciprocity with another County or within your County.
Philosophy #11: If you’ve lost your house, you can’t refinance something that doesn’t exist. You can’t get the full value of your insurance policy unless you rebuild; that will be paid out in phases as you rebuild. If you are grossly underinsured, you may be offered a “full and final” one time check.
In 2008, we moved back to the property and it looked like the moon. We lived in a trailer on the property while we went through the four year rebuild process. We chose to use a “green” material that had a high R value, would be able to sustain 200 mph winds and would be able to handle an 8+ earthquake. It took us two years longer to make this happen, primarily because you need highly specialized structural engineers and that the County Planning Department only knew how to use wooden frame load requirements, which did not reflect the material we chose.
How to do it….
1. GENERAL ORGANIZATION:
Begin making an inventory of personal property items on a PER ROOM BASIS.
Use the Excel spread sheet or what is required by your insurance company. Get a file box and make a file for each room in your house. This will keep you organized as the process
2. THE KITCHEN:
For the kitchen, go to Williams Sonoma or any store that carries a complete line of kitchen appliances, items, gadgets. Ask if you can use their “Bridal Registry” scanner. It is a handheld scanner that will record any item. You can just walk around the store and scan every item in your whole kitchen. They will then print it out for you and you now have a current “replacement cost” list that includes tax.
3. DETERMINE COST/VALUE:
If you have purchased items in the last year or two, you can go back to the store and ask if they can research and find the receipt. Sales tax may have increased so you should account for that on the Excel spreadsheet.
Take a look at your credit card statements on line. If you don’t download your card statements, call your card company and ask them to send as many statements as you think you will need; try and go back at least 3 – 5 years.
For big ticket items that are antiques, rare, or just valuable, take the photos to an appraiser and see if they will give you a stamped, certified appraisal as documentation for your insurance claim.
Use the internet. You may spend days and hours Googling 90% of the items in your home. If you spend 8 hours researching a $500+ item, you are earning $62.50 per hour/net; not bad. Once you find the item or find something that most closely resembles the item you lost, print out the picture with price and description and put it in the file for that room (and complete the Excel spreadsheet). This is your back up
documentation. Just do the best you can.
CD Library: If you have an iPod you can use the Menu to create a CD inventory.
Book Library: If you routinely order from Amazon.com, you can go in to your individual account history and print out a historical list of all the items you have purchased. You may then need to work from that print out and hand write in the cost (include shipping and tax) on the print out, then do a manual tally.
Remember: If the item was purchased for $100 in 2000 and today you replace the item and it costs $125.00, the insurance company must pay you the replacement cost because you have replaced that item. On the Excel spreadsheet, make notations of items that you have purchased post-fire as “replacement”. Replacement items are to be reimbursed 100% and not depreciated.
Good luck. Hang in there. It will be worth it.
Contact Martha Collins on Facebook using a PM if you have questions; please be specific and I will try and help.