Following any kind of disaster to your property, it is normal to want to clean up straight away and begin moving forward with the recovery process.
However, when insurance is involved, the process of cleaning up from a fire or flood is a little more complicated. We recommend being prepared with a plan as well as being fully aware of all insurance policies to make this unhappy time run a little more smoothly.
Review the Details of Your Insurance Policy
First and foremost, be knowledgeable when it comes to the details of your policy before a disastrous event occurs. The time to learn what you are and are not covered for is not while dealing with a crisis. Be aware of your salvage options in the event that something happens in the future. This way, you can be reassured in your policy coverage and begin to rebuild.
Keep Everything As Is
Your first reaction may be to immediately begin throwing away or removing items from the damaged building. It is highly recommended you do not do this until a salvor comes in to assess the damage and the property. This is due to an “impairment of recovery rights” clause. This can impact the amount that your insurance is responsible to pay. Bottom line, leave everything as it is!
Get the Lowest Salvage Value
This may seem counterintuitive, but it will actually benefit you. This is because the amount that the insurance company recovers is based on this equation: the insurance company will pay for the damages to the property, plus the cost of repairs, minus the salvage value. If the salvage value is lower, the more the insurance company will end up paying.
How Much Coverage Do You Have?
When it comes to salvage work and dealing with insurance, it is very important that the amount of the loss does not exceed the limit on your policy. You do not want the limit of what will be paid for by insurance to be less than the amount of loss. This is because both parties then need to agree on what is covered and how to deal with the rest that is not insured.
Be Mindful of Deductibles and Coinsurance
It is important to be aware of the details of your policy. Where will the deductible be taken from? The total amount of loss? Or against what is insured? Another complicating factor to this is coinsurance requirements. Normally, your limit of insurance needs to be anywhere from 50%-80% of the value of the property. Both factors can complicate the situation even more, so be mindful and knowledgeable.
Have questions about your property insurance claim? Feel free to contact Stark Loss for more information about how a Public Adjuster can help.