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Good claims advice:

Written by: Douglas L. LaFaive 3 January 2007

For small personal property or business property claims you may be able to get started now and have your contents inventory ready for your insurance company adjuster at the time of his arrival. Taking pictures of the damaged is highly recommended and making an inventory of all damaged is required by most insurance policies.

Large personal property and or business property claims may take days or in extreme cases it may take months to properly document your personal property and or business property loss. It is very important to start right at the beginning.

1. Most insurance policies require the insured property owner to protect the affected property from further damage. This should be done promptly. If you canít do it your self arrange to have any openings in the building covered and if freezing is a concern make sure that the plumbing system in the building is drained.

2. Keep in mind that the damaged property is your property and that no one has the right to dispose of it, not even the your insurance company until the claim is settled. It is not recommended to let any one dispose of any damaged property until your claim is settled. (Exceptions for health and safety reasons should be made in the case of foods, chemicals and other hazards.)

3. It is common practice for many insurance agents and insurance companies to send out a cleaning company and or a contractor assist you in protecting your property from further damage. It is recommended that you allow nothing more to be done than to protect your property from further damage. Period. The larger the loss the more important it is to restrict the activity of the cleaning company and contractor. Before you sign any contract with a cleaning company or a contractor sent out by your insurance agent and or your insurance company ask yourself: Who are they really working for? The insurance company or Me? Remember, You Are Not Required to use the cleaning company and or building contractor that is recommended by your insurance agent or your insurance company. They are recommendations only.

4. If possible take photographs of each room and, in particular, photograph expensive items and/or items that must be discarded before the insurance company adjuster arrives for reasons mentioned in 2. above. It is suggested that you remove all expensive jewelry and money from your property if it is going to be vacant due to the damage.

5. Large losses may prevent you from living or working in the damaged building. In this situation once you have made reasonable arrangements to have your property protected from further damage the next step you should take is to determine how you are going to proceed with the settlement of your loss.

a. You can let your insurance company put your claim together for you if that is their policy. Your insurance company will have itís interests in mind and trained insurance adjusters on their staff to do so.

b. You can put your insurance claim together by your self. You may not fully understand the process or you may not know what your are entitled to collect.

c. You can seek the services of a Public Adjuster who will be working to insure that your claim is properly presented to your insurance company.

For those who wish to present their own claim Douglas L. LaFaive & Associates LLC, Public Adjusters is providing the following tips and an Excel formatted contents inventory spread sheet to make it easy for you to list your contents items to present to the insurance company adjuster.

1.)   Any items that are damaged, even a little bit, should be listed on the contents inventory sheet. Identify items with a model number and/or brand name. If items such as electronics have manufactured dates on them, list the date.

2.)   Start with one room at a time. Begin at one wall and work your way around the room, listing all of the items damaged. Periodically use one line to indicate your position in the room. For example, to the left of the television, inside the white dresser, etc. Making a note to indicate where items are located will help to find the item when the insurance company adjuster needs to verify the item, the quality of the item, and/or the fact that the item is damaged.

3.)   If items are outside of the house, list the damaged items and make a series of piles. In the inventory use one line to indicate pile (1), pile (2), etc.

4.)   Once you have made a list of all of the contents items that are available for inspection, you have finished the dirty work. It is now time to list the items that were completely destroyed and/or thrown out. Douglas L. LaFaive & Associates LLC highly recommends that you do not throw out items or let the cleaning company throw out any damaged item before the contents claim is settled. (An exception would be made for perishable food items, for heath reasons.)

5.)   It is now time to price the items: The internet has made pricing of most items easy; time consuming, but easy. Among helpful sites to use are: www.drugstore.com for household items, www.jr.com for electronics, www.jcpenney.com or other clothing store web sites for clothing etc.

If you know that you pay an average of $30.00 for shirts, then use that as the price for your shirts. For those of you that have hundreds of books (hard cover and paper back), hundreds of music CDs, DVDís, records, cassette tapes, large numbers of decorative tee shirts, or baseball caps, consider giving the items an average cost also. www.abebooks.com and www.amazon.com are helpful sites for pricing older and more valuable books.

Do not put down the price that you paid at a tag sale for the solid wood dresser. It does not matter what you paid for an item. The Replacement Cost Value (RCV) of an item is based on what it will cost you to replace a particular item at todayís prices. In most cases, the cost of replacing an item is greater than what you paid for it. For most items but not all. A good example of an item costing less to replace, is the computer you purchased a long time ago, which has gone down in price over the years.

When you list the Replacement Cost Value (RCV) of an item, keep in mind that the blouse or chainsaw that you bought on sale has to be replaced at todays prices. You canít wait to find the items on sale again.

6.)   Placing an age on items: Insurance companies may require that you indicate the purchase date of the items in the contents inventory. The insurance company wants you to AGE the item. The age of the item is used to depreciate (give it a lower value because it is used), and to arrive at the Actual Cash Value (ACV) of an item.

The Replacement Cost Value (RCV) of an item minus the Depreciation (Dep) (based on wear and tear and/or age) equals the Actual Cash Value (ACV) of an item. (RCV - Dep = ACV)

The amount of Depreciation (Dep) applied to an item does not have to be based on the age of an item. The condition of an item may not reflect the age of the item. Shoes that are seldom worn should not be depreciated at the rate that shoes used every day are depreciated. There is less wear and tear on the seldom worn shoes. On the other hand, the sofa in the den where the children have played for the past two years, will show greater wear and tear than the sofa in the living room that is seldom used.

Note: Keep in mind that there are items that maintain and/or increase in value, such as fine furniture, antiques, art or jewelry.

BUT MY POLICY SAYS THAT IT IS A REPLACEMENT COST POLICY!!!!

That may be true but this is how the replacement cost clause works: Under the Replacement Cost Provisions of your policy, you are required to purchase the items damaged and give the receipts to your insurance company adjuster. After review by your insurance company adjuster, to insure that the items purchased are of the same type and quality that were damaged, you would be entitled to the replacement cost of the items purchased.

BUT HOW AM I GOING TO DO THAT WITHOUT MONEY????

When you read your policy, you will find that your insurance company will allow you to make a claim based on the Actual Cash Value (ACV) of the damaged items. The Actual Cash Value (ACV) equals the Replacement Cost Value (RCV) of an item, minus the wear and tear or Depreciation (Dep).

Once you have presented your claim and received payment based on the Actual Cash Value (ACV) of your damaged items you will have the money to start to repurchase the damaged items.

Once your have replaced some of the damaged items with the money that you received in the actual case value settlement, you can make an additional claim for the withheld depreciation. You will have to keep all of your receipts for the purchased items and show them to your insurance company adjuster.

Your insurance company adjuster will then confirm that the item was purchased and pay you for the difference between what was paid to you on an actual cash value basis, and the actual replacement cost of the item.

For example: (RCV) New shirt: $35.99 minus 20 % (Dep) or ( - $7.20) equals the (ACV) payment of $28.79. In this example you would be entitled to an additional amount of $7.20.

In order to collect the full replacement cost of a particular item you must replace the item.

Your insurance policy may require you to advise your insurance company of your intent to make an additional claim under the replacement cost provision of your policy within 180 days of the date that the damage occurred. Not 180 days from the date of the settlement. Make sure that you notify your insurance company in writing of your intent to make a claim for the depreciation withheld from your initial Actual Cash Value (ACV) payment within this time frame.

It is strongly suggested that you inform your insurance company of your intention to make an additional claim under the replacement cost provisions or your policy immediately.

If all of this seems confusing, complicated or time consuming,  contact Douglas L. LaFaive & Associates LLC to handle the entire claim for you.

Written by: Douglas L. LaFaive. ( Douglas L. LaFaive is a Special Feature writer for: Advocates for the Insured  www.claimshelp.com š and author of The Claims Game How to Play to Win! How to ... settle your Automobile Injury Claim.)

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The following information is for users of our Excel based Contents Inventory Spread Sheet.

Item: List the item clearly but simply i.e., shoes men's black loafer, shirt men's dress, dress child's, sofa green leather etc. Large inventories will take forever if you write down every detail. if at all possible do not discard the damaged property. Retaining the damaged property will allow the insurance company adjuster to view the damaged item and if necessary allow you to point out the quality and condition of the damaged property. 

Description: Keep the description simple but informative, i.e.. e ., Model # xxxxxx and/or list the brand name, i.e.. e., Polo, Liz Claiborne, Black and Decker, Sears, etc. Brand names, model numbers help confirm the value of an item. 

Quantity: Group items when you can. Indicate the cost per individual item not the total in column D. Column G will reflect the total cost of the items. Example: 5 items in column C x  the individual item cost in column D ($11.00) = the total in column D ($55.00). If you have ties that range from $25.00 to $50.00 don't lump them together. Separate the $25.00 ties from the $50.00 and list the two groups of ties separately. If you have 50 paperback books that have an average price of $7.99 them group the paperback books. Keep similar items of the same price in groups to quicken the inventory process and to avoid a 300 page document when possible.

Cost/ Per: Cost  per item: = RCV: Replacement Cost Value:  The cost of the item listed in column A should reflect the cost to replace a particular item with one that is similar or: Like Kind and Quality. Keep in mind that the market is being flooded with items of lesser quality and lower prices. With so many items being made at lower costs and lesser quality it is also important at times to distinguish the country of manufacture. A can opener made in china in 2004 for $14.99 may not be of the same quality as a can opener made in America or Germany in 1978. Your are entitled to be compensated for the quality of the item damaged. Don't accept the price an imported knock off.

AGE: Indicate age in years; i.e.. e., 1, 5, 20. If an Item is new and still packaged or recently purchased indicate "New" in description column.

AMT: Amount of depreciation: Depreciation is the value that is loss to an item due to wear and tear (use) and age. There are no set rules when it come to applying to depreciation to a particular item because every items has a life of it's own. Clothing will depreciate faster than furniture. Furniture used a lot will depreciate faster. A well made bedroom dresser can last for hundreds of years if taken care of properly but may last a year if  cigarettes are allowed to burn the top. Baseball cards may appreciate as well as a fine painting. I have a silver stamp holder on my desk that I purchased  used 5 years ago for $15.00. Has it increased in value or depreciated in value? Each item or group of items must be treated separately from household to household.

RCV:  Replacement Cost Value: This figure represents the value of the quantity of items listed in column C X times the cost per item in column D. (See Cost per Item above)

Dep Amount: (Amount of depreciation applied) A good way to understand the concept of depreciation is to focus on a car. A brand new car may sell for $23,000.00. The same car a year older may only sell for $20,000.00 and the same auto two years older may only sell for $16,000.00.

ACV: (Actual Cash Value): Simply put, the actual cash value of an item is: the present day value of a used item. The Replacement Cost Value (RCV) of an item minus the Depreciation (Dep) (based on wear and tear and/or age) equals the Actual Cash Value (ACV) of an item. (RCV Ė Dep = ACV)

To PRINT: Click FILE, Click PAGE SETUP, Select LANDSCAPE, Select PRINT, and select the desired pages to be printed or just click PRINT.

YOUR STATE SALES TAX %: Type your state sales tax % in row "8" column "C". Not all items that you list may be taxed. An adjustment in the percentage amount in column "C" may be needed to produce an estimated tax amount.

COPYRIGHT © 2004: www.claimshelp.com: This form is protected under the United States copyright laws. The cost of the form when used without authorization from www.claimshelp.com is $500.00 per use. Plus collection costs.

Purchase items you need now: Use the links to the right to purchase needed items now. Print the receipt for proof of purchase and attach the receipt to the inventory. You will not have to depreciate the purchased item if you have replacement cost coverage. When you purchase items on the internet you will be able to go back to the store that you purchased items from and replace any lost receipts. You should remember that in order to recover the depreciation withheld by your insurance company you have to actually replace the damaged items and submit the proof of purchase to your insurance company. In many cases when you shop in a local store the items on the receipt may not be clearly indicated and or lumped together making it very difficult to match up the purchased item to your inventory sheet. Invoices from online purchases clearly indicate the specific items and prices per item. The easier it is for you to document your purchases the easier it will be to claim your depreciation withheld by your insurance company.

Debris Removal: It takes time to move damaged items to the dumpster or dump. In column C type in the number of hours spent disposing of damaged items. In column D type in the hourly wage to be compensated for, i.e. $25.00 per hour. If there is a town dump fee place this amount in the dumpster rental cost row below.

Total Dumpster Rental Costs: If you use dumpsters to dispose of your damaged items you will need to obtain a receipt form the dumpster rental company. Type 1 in column C and the total cost of the dumpsters in column D.

Total Cost of Cleaning: If you spend time doing your own cleaning you are entitled to be paid for your time. In column C type in the numbers of hours spent cleaning damaged items. In column D type in the hourly wage to be compensated for, i.e. $25.00 per hour. If you spend time doing laundry make sure that you include your the time and cost as above. Also add in the cost of any cleaning supplies in the general inventory. If your use a professional cleaning service for the cleaning and debris removal they will give you one bill. Place a 1 in column C and add the total bill amount in column D.

Inserting New Rows: To add more Rows, select Insert, select Rows. Once the desired number of rows have been added, select Columns F, G, H and I of row 121 and copy into the newly inserted rows at F, G, H and I.

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 E-MAIL US | FAX: 860-535-3823 | Toll Free: 800-501-8119

The information provided is meant to inform the consumer. It is not meant to provide Professional Legal Advice. Please read our disclaimer.

Should your property sustain damages from Fire, Lighting, Wind, Water or any other cause we strongly suggest that you consider and contact Douglas L. LaFaive & Associates Licensed Public Adjusters.

Should you suffer a personal injury of any kind we suggest that you consider and contact a Professional Attorney to review your options in pursuing a recovery from the responsible party.

 

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