While you may have purchased replacement cost coverage, an insurer is not obligated to provide payment of an agreed replacement cost up front. Settlement will first be paid as actual cash value (“ACV”) at time of loss. ACV is usually defined as replacement cost less depreciation to equate to value at time of loss. It may also be determined as market value for personal property, for instance. However, when expecting the adjustment payment on damage to your property, don’t expect full replacement cost to be paid immediately. The insurer will first pay only the ACV less any applicable deductible.
Time Limits for Replacement Cost
Most property insurance policies contain provisions that limit the time for you to exercise replacement. Policies invariably provide that the insurer will first pay ACV and then, if replacement is completed within 180 days from date of loss (sometimes date of payment of ACV), you are entitled to make claim for the withheld depreciation amount. Be careful to comply with time limits or ask for extensions that are usually granted. And, make sure if costs are greater than the estimated RCV, you advise your insurer or they may resist payment to full replacement cost where it was greater than agreed.
Matching Issues
Great controversy exists where building materials are no longer available and replacement cost coverage is provided. Insurers may take the position that the payment owed is only for areas that are directly damaged. Consequently, you may find yourself with different colors of roofing materials on adjacent areas of the roof. Or, you may find the insurer authorizing replacement of one area of siding and painting that area but not all sides to match. You may suffer damages to flooring that is continuous throughout the home and have the insurer take the position that replacement cost does not include replacement of other adjacent areas simply to match finish. Florida, and a number of other states, have dealt with such controversy by adopting legal precedent or changing laws to ensure that matching issues are resolved in favor of the insured. Generally, circumstances where the property involved would suffer loss of value or appearance because of matching issues, insurers are forced to comply with reasonable matching requirements. “Line-of-sight” adjustments are common compromises wherein flooring that is continuous and within line-of-sight will be replaced to match even if undamaged.
Repair vs. Replacement
Insurers are not liable under a policy to replace damaged property if repair will restore the property to pre-loss condition. So, if you suffer damages to a roof but the damages are not enough to warrant total replacement, it may be permissible for the insurer to limit claim to the repair costs. Loss to a kitchen cabinet, for example, may be adjusted on the basis of repair, even where the cost to repair or replace a damaged cabinet may be greater than comparable replacement of a single cabinet and thus avoid replacement of all cabinets. Insurers have the option under the contract to repair or replace, but once they make that election, they become liable for the full costs. Accordingly, where you may disagree with the insurer on this issue, require them to invoke their right to repair in writing and hold them to it. Many policies are now sold with clauses to specifically allow insurers to exercise repair with their own approved contractor. Ensure that these contractors are held to the same standards as you would require of any contractor under the insurance contract. And, be aware of building codes that may prohibit repair where, for example, in a High Velocity Wind Zone, roof coverings must be replaced if damages exceed 25% of a section or roof area.
Co-Insurance
Most insureds do not have knowledge that allows them to assess the costs to rebuild their property. Values of insurance are often derived based upon past amount or by formula that are average costs based upon area and finish. Insurers require insureds to carry insurance to percents of replacement cost in order to recover replacement cost payment; usually to 80% or 90% of the estimated replacement cost. If an insured fails to purchase adequate limits, they may find themselves underinsured and an unwitting co-insurer. In effect, the insured will suffer a penalty at time of loss if they are underinsured; not to mention that if a total loss is suffered, the insured will end up paying additional amounts over the policy limits for the full replacement. It is important for insureds to have knowledge of their property’s replacement value. Beware, often agents will advise you are only required to purchase certain amounts of coverage. They are aware that the premium will be less if less coverage is purchased but the insured will suffer the consequence if underinsured.
If you have purchased a homeowners or commercial policy of insurance, you very likely have coverage for replacement cost. Replacement cost insurance provides that if your property is damaged by an insured peril, you will receive a settlement based upon “like kind and quality” for the full replacement value of the lost property, up to policy limits. So, if you lose your home or business in a covered hurricane event, for example, you are entitled to the replacement cost of the loss, not to exceed the policy value.
What is “Like Kind and Quality?
Simply, comparable replacement using available materials. So, if your flooring is discontinued, adjustment is based upon materials that are equivalent in value and quality. Flooring, siding, roofing and many components become discontinued; television and stereo models are evolving constantly. Replacement cost simply means you may get an unexpected upgrade to your television, if damaged. Insurers use the terms “like kind and quality” to limit the replacement to whatever is currently available and comparable.
What is the benefit of Replacement Cost?
The obvious benefit is that you get “new-for-old”. If you lose your home in a hurricane, you get new flooring, not previously used; you get a new roof, even if your roof was 10 years old; you get new appliances. There are caveats, of course. If your appliances were obsolete and not working, you are not entitled to new appliances. And, if you do not want to replace the property or items, you lose the benefit of replacement cost, but sometimes, it makes sense not to replace as well. If you have items you no longer need, or too many, you can always elect just to receive the “value at time of loss” instead of replacement cost. The choice is yours.
What do I need to look out for with Replacement Cost?
There are things to be aware of when your policy provides replacement cost coverage. In our next series of blogs, we will discuss some of the more common things you need to be informed about:
When something devastating happens to your property, you can rest easy knowing that your insurance has got you covered…as long as you’ve got a good policy.
Getting the value of your things back after substantial damage has occurred doesn’t have to be difficult, but communicating with your claim adjuster can. You need to know which questions matter the most and if you’ve never gone through the process before, why would you?
Fortunately, we’re here to help. In this post, we’re going to tell you the 5 crucial questions you should ask your claim adjuster in order to get things worked out with your insurance company properly.
1. How Long Will This Process Take?
You don’t want to be impatient during this process, because there’s a good chance it’ll take a few weeks or even months to get settled. Just ask your claim adjuster what their professional experience tells them about your situation.
It’s completely understandable to want to get this over with as soon as you possibly can, so you can get your money and move on with your life, but it’s harder than you might think for your adjuster to get it all done quickly.
2. Have I Filled Out the Correct Paperwork?
You’re going to have to fill out a lot of paperwork, which can get a bit overwhelming at times. It’s okay to check-in with your claims adjuster to make sure you’re doing it correctly. Chances are, you’ll need a bit of hand-holding through some of it.
3. Have You Dealt With a Case Like This Before?
When you’re dealing with a new claim adjuster, it never hurts to ask if they’ve ever seen a case like yours in the past. Their answer will tell you how experienced they are and how comfortable they’re going to be in guiding you through the process.
Most claims are fairly cut-and-dry, but you do run into unexpected issues from time to time.
4. How Much Money Can I Expect To Get?
It’s also nice to get an idea of what you’ll be settling for. For instance, if you’re dealing with a wrecked car, it’s good to know how much you’ll be getting back from the insurance company so you can pay the right amount for a new car.
Any experienced claim adjuster should be able to give you a ballpark figure to work off of.
5. Tell Me About My Policy
Insurance can be confusing sometimes, we get that. At Global Claim Advisors, our team of knowledgable advisors will be able to explain every nuance of your policy to you, so you never feel alone in this process.
Every policy is a little bit different, so it takes someone with a lot of experience to understand exactly what’s going on. When disaster strikes, you want to be able to talk to someone that knows how to help you navigate this situation.
Find a Great Claim Adjuster
To discuss your claim and get the important questions answered with a professional claim adjuster, contact us at Global Claim Advisors. We’re available anytime to give you the help you deserve so you can quickly get your claim settled and move on with your life.
After experiencing property damage or loss, you might be left feeling anxious and worried. You’ve lost something of yours and now you’re not sure how you’re going to repair or replace it. After the damage occurs, your insurance company will send an adjuster out to assess the damage.
However, your insurance company’s adjuster is looking out for your insurance company. This is why you need to consider hiring a public insurance adjuster. Once hiring a public insurance adjuster, you’ll have someone out on the scene who works for you and has you in his or her best interest.
Not sure if hiring a public adjuster is the right decision for you? Continue reading below for everything you need to know about the benefits of hiring a public adjuster.
1. Experience
A public adjuster has the experience and expertise needed to understand the claims process. It’s not difficult to misinterpret something on your insurance policy. Without having an adjuster on your side, insurance companies have the upper hand.
Their experience is going to be what gets you the best results possible. They’ll be able to guide you throughout the entire process ensuring that every step you take is the correct one.
2. Time Savings
Not everyone has the option of putting their life on hold to deal with filing a claim, speaking with insurance companies, collecting all proper documentation, and so on. Hiring a public adjuster will save you time.
An adjuster will manage your claim for you and only contact you when you’re needed. And because your public adjuster knows about the claims process, he or she will ensure that the claim is filed and settled as quickly as possible.
3. Maximized Settlement
Not only will a public adjuster make the process go by much faster, but he or she will be able to maximize your settlement as well. One study showed that public adjusters are able to negotiate with insurance companies. This ultimately increases the settlement amount for you.
Without a public adjuster, your insurance company would only pay out what they decide to. An adjuster on your side will be able to negotiate a larger settlement with them, which can only benefit you.
4. Knowledge of Rights
Aside from knowing how to negotiate with your insurance company, a public insurance adjuster will also know your rights. This is a major benefit when dealing with a denied claim. The adjuster acts as a witness to the scene and damages and can also guide you along the way if more aggressive action is required to get the settlement you deserve.
Do You Need a Public Insurance Adjuster?
After reading through this guide, we hope you now know how important it is to hire a public insurance adjuster.
Have you experienced property loss or damages? If so, be sure to contact us today to see how we can help you!
Have you just suffered property damage and don’t know what to do? Do you need help making sure that your home, car or rental property is restored to its former condition?
For more information about a property damage insurance claim, check out this simple guide!
Property Damage Insurance Claim Process
To get the claims process started, you have to call your insurance company to report the damage. Once you have a claim number, your company will send an insurance adjuster to examine the property and determine the amount of money you will receive. The amount you get from the insurance company depends on your level of coverage and the extent of the damage.
If the property damage claim involves a vehicle collision, there will have to be a determination of who is at fault. Depending on the state where the accident takes place, there are several factors in determining who is legally responsible for the accident.
Regardless of who is found to be responsible for the property damage liability, you will have to pay your insurance deductible. This is usually between $250 and $500.
In the event of a burst pipe or fire, your insurance company will usually tell you to contact a damage mitigation specialist. This will prevent further destruction from happening. Depending on your policy, your insurance will likely cover any emergency repair costs.
Unless your policy covers your possessions, you may need to get further coverage to make sure everything is paid for. You will also need to provide a detailed list of any damaged items so the insurance company can provide you with a check for their cash value. You should know that luxury items like jewelry or family heirlooms will likely need extra policies if their value exceeds your level of coverage.
Repairs and Recovery
Once the damage to your home or property has been assessed, you will need to contact contractors to get quotes for any needed repair work. You should also make sure to get at least three quotes from different contractors to get the best possible deal.
Depending on how your insurance company wants to proceed, you will either receive a single check for all the repair work or pay the contractor directly. Before signing any paperwork, you should always check with your insurance provider first. If you sign a “direction to pay,” you are effectively giving control over the project to your contractor.
If you receive a check to cover the costs of repairs, you should make sure that all work is done to your satisfaction before paying. If your insurance company ends up signing off on shoddy work, you may be left holding the bag.
If your home or rental property is damaged to the point where it is unliveable, you will also receive additional living expenses or an ALE check. This money will help pay for things like meals and hotel rooms while your property is being fixed.
Happy Home and Happy Wallet
Property damage claims can seem scary and overwhelming, but there are simple solutions. All you need to do is read your policy, know your coverage level and follow your company’s process.
If you need help getting coverage or dealing with a property damage insurance claim, check out Global Claim Advisors today!
Insurance is the backbone of your business. Every entrepreneur and business owner needs to know that their livelihood is secure in the event of a disaster or accident.
Insurance companies know this too, which is why they paid out a record-breaking $135 billion to home and business owners in 2017, following a particularly severe year for natural disasters.
Contrary to what some people might believe, insurers want you to be appropriately covered in the event of an accident, which is why they routinely send out claims adjusters to assess the damage.
But what do insurance adjusters do? Essentially, they’re the people who will figure out how much insurance money you’ll get and what it is you’ll need to get back on your feet.
If you’re wondering “What does a claims adjuster do?”, read on to find out.
What Does a Claims Adjuster Do: The Basics
So what does an insurance claims adjuster do? Put simply, they will come to your damaged property and assess whether or not the insurance company needs to pay a claim to you and if so, how much.
They have a number of duties which are wide-ranging. They will determine whether your policy actually covers the loss you’ve suffered. Then they’ll have to assess whether the case is fraudulent or not, before calculating how much needs to be paid.
After this, it’s their job to contact people close to the claimant, such as doctors and employees, to gather more relevant information. Then they are tasked with negotiating the settlement and processing the payments.
Different Kinds of Claims Adjusters
Before you can confidently know what does an insurance adjuster do, you should be aware that there are three different types of claims adjusters.
The first and most common type is the so-called ‘company adjuster’. These are, naturally, people who work on behalf of your insurance company to assess claimant’s cases and calculate settlements. The vast majority of claimants will deal with this kind of claims adjuster.
Another type is what is known as an ‘independent adjuster’. These are from independent companies and agencies but will be hired by insurance companies on a case-by-case basis. They report back to the insurance company and essentially work for them throughout the case.
Some people prefer to use a truly independent adjuster, as they may not trust one working for the insurance company. This is where ‘public adjusters’ come in. These are hired by the actual policyholder, often out-of-pocket, to assess the claim on their behalf.
It’s worth noting that the first two types of claims adjuster won’t cost a claimant any money, as they just bill the insurance company for their work. A public adjuster, however, will cost you.
More Than Just Money
Those wondering what does an adjuster do might be surprised to find out that it’s not just about the money. Their main goal is to calculate the material loss your business has experienced, but that’s not the whole picture.
They will also assess any physical, mental, or emotional injury you may have suffered, which will also factor into the claim.
They will examine police records and work with authorities if it is believed a crime has been committed. They basically cover all angles.
Learn More
Now when someone asks you “What does a claims adjuster do?”, you’ll be able to answer with confidence. If you have a claim to make and want to know more about how an adjuster can help you, don’t hesitate to get in touch with us today for all of the expert advice you’ll ever need.
