I recently saw on a Facebook group I belong to advice for victims of the California fires and how they can maximize their insurance claims. The advice was dreadful. It included, "Make from memory the most detailed list you can of every item in your house that was destroyed, and its value."
This is terrible advice.
One of my specialties as an attorney is representing people with property damage claims against their insurers (Massachusetts only). I also represent insurers in these losses, more on this at the end. I have seen from both sides people who have suffered this type of terrible loss who received this advice and got completely caught up in futilely trying to make a complete inventory of their destroyed personal property and its value on their own. Of course, because these items represent their life and have huge value to them, and they get lost in that.
The good news is: there is an entire profession devoted to helping people with this type of insurance claim. Their job is to advocate with an insurance company for the insured for the value of the property damage loss, including personal property claims. They have specialists who will make lists of personal property inventory and value it. Yes, you will need to work with them and provide them the information, which may include lists, but they will help you and they will provide the valuation.
They are called public adjusters. They get paid by contingency fee, typically ten percent (at least in Massachusetts; maximum percentage is set by state law), so cost nothing up front, and for any major loss are well worth the cost because you will recover more working with them even with their fee than you would trying to do it yourself, and they will act as a buffer between you and the insurer and reduce your stress in this aspect of your loss significantly.
In all honesty, some public adjusters are terrible and some are great (and most are in between). As with any professional doing something major for you, you will want referrals if possible. Meet with several. Ask for references. Google them. But a good public adjuster will save you time and aggravation and help you move forward. Even a not very good (but not terrible) public adjuster is better than you trying to do this yourself.
My advice for anyone who may need to evacuate but is currently safe (and everyone else, do this while you are thinking about it): Go around your house and take pictures of everything. The exterior walls. Everything you own inside. Appliances. Bookshelves. Open your closets, your cabinets, and your drawers and take pictures. (Not of each item, but of the inside of each drawer. I am not trying to make you crazy here. Maybe individual photos of items you own of high monetary value.) Hopefully you will never need to look at them, but if you do need to show what you owned, this is a good way to do it. (I do this every couple of years. It takes 30 minutes or so.) You can hand the photos to the public adjuster, who can use them as a basis for their inventory (along with conversations with you).
Why is it terrible advice for you to try to inventory and value your own goods? Because unfortunately sentimental value has nothing to do with insurance coverage. The items you love the most – your photo albums, the souvenirs you picked up on your travels, your paperback copy of The Lord of the Rings trilogy that first belonged to your father that you have carried around since you were 12 (yes I’m projecting here) – you will obsess over their loss, they will make you sad, you will mourn them, all of which is understandable, but they have little value in an insurance claim. Your ergonomic chair in your home office that you never think about may be worth something. You will obsess over that as well. Even if you don’t, your lists will not be put together in a way that an insurer can easily work with. (You will also need to understand the difference between actual cash value and replacement cost value. Actual cash value broadly speaking is the value of the item you own today. My beloved copy of Lord of the Rings is falling apart and has no value; even a thrift shop would just throw it out. But its replacement cost value is $26.38, because that's what I would spend for it on Amazon. I will get that amount from the insurer if I timely actually purchase a new copy.) This will take your attention from where it needs to be, which is working with a contractor to rebuild your house within the amount the insurer will pay.
I have seen advice that if a house suffers a total loss don’t waste your ten percent on a public adjuster because you will get your policy limits. This is an oversimplification. There are various coverages that a policyholder may not know about on their own, that insurers may ignore. Everything from code upgrades, which is huge (you have to rebuild to current code, which is an extra expense and an extra coverage but the amount has to be proven based on local codes) to landscaping coverage. (These coverages are often but not always in addition to your building coverage limit.) Again, the difference between actual cash value that you get paid up front and replacement cost value, that you get paid after the rebuild is complete if you have that coverage, can be significant, and you need ACV to pay your contractor to do the work. (Some contractors understand insurance claims; most don’t -- they just want to build houses.) And don't forget loss of use coverage, which is rent while your house is being rebuilt. (In my experience public adjusters generally don't charge their percentage for this but if needed they will help you advocate for a suitable place to live.) With personal property (your stuff) you have to show the value of your destroyed property, which may or may not reach the coverage limit. Many public adjusters are not interested in coming into a loss late. So, if you are someone who can read and understand an insurance policy and advocate effectively for yourself with the overworked insurance adjusters who will be flooding into California from other states, and you have the time and emotional wherewithal to do this on your own, sure, go for it. As an attorney in the industry, I would 100 percent hire a public adjuster in this situation.
Very important note: I don’t want to make it sound like I think insurers
are evil. Quite the opposite. I
represent insurers as well as policyholders, and many insurance adjusters are
wonderful people with integrity who do their absolute best to be fair. But if you get off on the wrong foot with a
claim it can be very difficult to course correct.
Posts
