What Can Go Wrong When You Make a Home Fire Insurance Claim?

March 5, 2021

Making a home fire insurance claim can be a complicated process. A substantial sum of money can be on the line, and you need it to replace lost belongings, repair your home, and get back on your feet. However, the claims process isn’t always straightforward. Complications can affect how much you receive from the insurer.

These are some of the most common complications with home fire insurance claims and how they could impact your claim.

#1 Over-Depreciation of Contents

Many insurance policies payout the Actual Cash Value for personal belongings. When this is the case, the insurance adjuster working on your claim factors depreciation into their valuation. However, there is considerable room for error.

The complete list of lost and damaged belongings is extensive. In order to work with such an overwhelming list, adjusters likely won’t calculate the depreciation of every single item. They’re more likely to use industry-standard estimates. That can lead to errors.

An insurance lawyer is helpful to have if you believe your belongings have been over-depreciated. They go through your list of lost belongings line by line to make sure their values have been correctly calculated. Since the adjuster recommends a settlement to the insurer, it’s important that their estimates are accurate.

#2 Inaccurate Repair Costs

Repair costs are another area where the adjuster’s estimate may be inaccurate. After you initiate your claim, an adjuster will put together a Scope of Work. This is an outline of all the work that has to be done to repair your home. It will include jobs like smoke restoration, structural repair, roof replacement, water damage restoration – everything your home needs to be brought back to its pre-loss state.

Next, the insurer will have contractors (often preferred contractors that the insurer has worked with before) provide estimates on the work. This is how the insurer evaluates your Dwelling coverage claim. If you decide to work with your own contractor, you may have to make up the difference in costs on your own.

If there are any jobs missing from the Scope of Work, you can also find yourself short. Take the time to review the Scope of Work and talk to the adjuster if there are repairs you believe should be made that haven’t been included.

#3 Subrogation

What happens when someone else causes damage to your property? Whether it’s a tenant or a neighbor, they can be liable for damages they’ve caused to your property, but the legal process for receiving compensation can be lengthy and full of uncertainty.

Instead, you can make a claim with your insurance company to cover the damage. The insurer can then pursue the third-party (or their insurer) for damages. In cases where renters cause damage to a property you own, tenants can be sued for accidentally starting a fire, but the process will be much easier if they have renter’s insurance.

Don’t let complications hurt your claim. Get help if you’ve run into a roadblock and negotiate with the insurer.


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