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Tips : Recoverable Depreciation in Fire Insurance Claim Process

Our office receives calls weekly from policyholders who are upset, confused and frustrated with their fire insurance claims. While some people are fed up with the insurance claim process and are ready to hire a public adjuster, others take advantage of the tips and tactics we provide on how to settle their claims without hired professional help.

Many of the issues we hear about consistently pertain to recoverable depreciation with the personal property portion of a fire claim. More specifically, contents claims for smoke and fire damage are often mismanaged and the topic of recoverable depreciation can be the first sign of trouble for the policyholder.

Last week we received a call at our public adjuster office in Tampa. An electrical fire severely damaged the caller’s home about 7 months prior to her contacting us. She had attempted to handle the fire claim through the insurance claim process with little luck. The insurance company had only paid a small portion of the claim and the caller was now being required to submit an extraordinary amount of paperwork for the remaining part of the claim to be considered.

There were many issues that caused to claim to be at a standstill and recoverable depreciation was one of the issues. Upon first review, our public adjuster felt the insurance company applied a depreciation rate that was higher than needed. The caller also relinquished control of her personal property early on in the fire claim process, having allowed her insurance company to inventory and set prices for her belongings. This set her claim on a downward trajectory that is all too common. These two issues contributed to some of the issues she was experiencing up to that point.

What is Recoverable Depreciation in the Insurance Claim Process?

Recoverable depreciation is a dollar amount or settlement portion that the insurance company withholds until the homeowner or business owner can prove he or she purchased or repaired damaged items associated with the insurance claim.

Insurance companies use a two-step payment process when paying a claim. They will issue partial payment based on many factors then tender the remaining balance at a later date. Those terms and conditions are typically negotiable.

As public insurance adjusters, we know how to navigate the complexities of the fire claim process. Experience and expertise is necessary to avoid missteps and mistakes that will lead to claim delays, denied claims and low or withheld settlement dollars. If you have a fire claim you should at least consult with a trusted public adjuster prior to submitting anything to or agreeing with your insurance company’s adjuster.

Tips on Recoverable Depreciation in Fire Insurance Claim Process

Here are tips for getting your recoverable depreciation and personal property claim paid as quickly as possible in the event of a near or total loss. These tips are applicable during the fire insurance claim process, or for water damage insurance claims, roof damage insurance claims and all other claim types.

  • Request a certified copy of your insurance contract. Locate the section titled “Recoverable Depreciation.” All home insurance policies contain the recoverable depreciation clause. This part of the policy explains the process by which your carrier will handle recoverable depreciation.
  • Submit your own contents inventory of any and all damaged personal property items. Use an Excel spreadsheet and include columns for item descriptions/ brand names, costs paid, ages, quantities and a link to a similarly priced or identical items found for sale on the Internet. How you inventory, price and substantiate your damaged personal property can be one of the most important parts of avoiding recoverable depreciation issues during the fire claim process.
  • Legitimately maximize the dollar amount of your personal property inventory. Specifically, all items, even small things that were damaged need to be accounted for. Make note of everything from toothpaste and Tupperware to pet food and couches.
  • Don’t conclude your contents list too early. In order to avoid having the insurance company’s adjuster withhold recoverable depreciation, or require you to provide additional substantiating documentation, the value of your personal property inventory should exceed your personal property policy limit by 25-30%.
  • Know the laws of your state which pertain to the valuation of personal property. As public adjusters in Florida, we take into consideration the “broad evidence rule.” This rule allows supporting data to be taken from various sources of information to establish the replacement cost value of a damage item.

The Benefits of Using a Public Adjuster for a Fire Insurance Claim

Using an experienced public insurance adjuster can make a significance difference in valuing and proactively handling a fire insurance claim as well as avoiding preventable delays surrounding recoverable depreciation. A well-managed and substantiated claim means a quicker and larger settlement for the claimant.

Contact us with any questions you may have about recoverable depreciation in the fire insurance claim process or for any other insured claim type. We have public adjusters in Tampa, Houston and throughout many other states in cities ready to answer your questions. We’re available 24/7 by calling (800) 572-7914.

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