Three common mistakes property owners make when dealing with their insurance company
Whatever kind of disaster strikes your property—a fire, burst pipe, or even a burglary—your first instinct is going to be to restore order. And no wonder—it’s unsettling to survey the damage to your home or business, and you’re eager to move on. Unfortunately, that’s when property owners make some common mistakes.
Disposing of damaged personal property before it is inventoried
Let’s say a pipe bursts in your basement, and your possessions are soaked. Don’t grab a trash bag and start getting rid of everything you’ve lost. It’s easy to imagine that a toothbrush here and a bathmat there won’t add up to much, but even a lot of small things can add up to a major expense when you need to replace them all at once. When we come to your property, we do a careful inventory, room by room, for everything that exists in the area of damage. Part of a public adjuster’s job is to provide the documentation to substantiate an accurate and fair claim, using photographs and notes from the damage site as proof. When a client cleans up too soon, they could be destroying evidence that would help them get a better claim.
Allowing your insurance carrier to bring in a mitigation company too soon
In the days following a major loss, some insurance providers may try to hurry the process by engaging a restoration company to come to your property right away and start cleaning up the damage. This gives clients a feeling that the insurance company is taking care of their problems. For example, in a basement fire, floor joists supporting the first floor may get burned. Your insurer may suggest you hire a restoration company to soda blast and clean those floor joists whereas an experienced public adjuster will dig deeper, and may find that those joists need to be replaced, at a cost that’s double or triple what the proposed repair may have been.
Carrying too little insurance coverage
Do you know what your insurance policy covers? It’s not usual for property owners to be surprised when substantial damage won’t be included in their claim, no matter how well documented it is. Depending on your specific location and type of building, you may want to look at additional coverage over and above the standard policy to be sure you’re protected.
In particular, many policies limit the amount that they will cover for a specific type of damage. For instance, if a sewer line is backed up, the resulting damage to a basement could be $40,000 or more. Some policies exclude sewer line damage, while others set a limit, such as $5,000-10,000. Business owners often have to deal with code compliance when they are making repairs following a disaster. Framing, electrical, plumbing, insulation, asbestos abatement, fire alarm system—any of these systems may need to be updated. With many policies, the insurer will pay for repairs to restore the property to its condition at the time of loss, but once the permits are pulled by your contractor, building departments may order your contractor to repair/rebuild to today’s current code standards. Many policies set a limit of 10% of the policy total. If a business has $500,000 in coverage, that means they will have $50,000 to cover code upgrades where anything above and beyond that is required above the limit carried will be a cost you’ll need to incur.
As the insured, you never expected this disaster and you were never prepared. Hire a public adjuster right from the start to help you get the best settlement from your insurer, to cover as much of your loss as possible. For 50 years, Grenier Public Adjusters has helped property owners like you navigate the claims process, including documentation of inventory and damages, so they get the settlement they deserve. Calling a public adjuster first will help ensure the best possible result.