Residential Fire Tips - Part 2 - Property Insurance

1. Review policy coverages, exclusions, and limitations.  Coverages identify insured losses; exclusions remove coverage; limitations place restrictions on certain items.

2. Check loss settlement provisions.  Structural claims may be settled on a replacement cost, functional replacement cost, or guaranteed replacement cost basis.  Personal property losses are paid on actual cash value (depreciated) basis but can often be broadened by endorsement to pay for replacement cost.

3. Confirm dwelling replacement cost every year.  Replacement cost is how much it takes to rebuild the structure with materials of like kind and quality.  The figure is based on details like square feet, building materials, attached garage, number of bathrooms, and more.  Upgrades like a room addition, new deck, kitchen remodel, etc., increase dwelling replacement cost.  It is best to insure your house for its full replacement cost.  Verify the dwelling limit is in line with the policy's co-insurance requirement.  Insuring for less than this amount could mean a reduced claim settlement.

4.  Inventory personal property.  A room-by-room list of belongings clairfies contents coverage needs.  It will also help you document damaged or destroyed items after a loss.  Note each possession and include purchase price, brand names, model information, serial numbers, and receipts whenever possible.  Photographs, video recordings, and appraisals are also useful.  Choose a contents coverage limit in line with the total value of your belongings.  Store the inventory in a fireproof container or safe deposit box and update it periodically.

5.  Personal property claims are insured for losses specifically listed in the insurance contract.  Be familiar with covered contents losses.  Talk to your homeowners insurance agent about gaps or restrictions that are concerning.  Insurers offer a variety of buy-back endorsements to tailor coverage for unique needs.

6.  Be familiar with claim basics.  It is important to notify the agent or company as soon as possible when a loss occurs.  Make temporary repairs to prevent further damage.  Save receipts for materials, as they are reimbursable.  Do not throw anything away without the adjuster's approval.  Prepare a loss statement and list of damaged items.  Begin a file for the insurance claim number, adjuster's contact information, invoices, receipts, and pertinent correspondence.  Cooperate with the adjuster as the claim investigation progresses.