Your responsibilities after a loss

There is a great deal of uncertainty about what happens after one experiences a loss. Most people state that they just don’t know how they are going to recover. For the coverage on the contents of your home or business, the personal property policy outlines what you will need to provide to receive your insurance settlement.

There is standard verbiage found in most insurance policies, provided by The Insurance Services Office. Under the heading of Duties After Loss, you’ll find, “In case of a loss to covered property, we have no duty to provide coverage under this policy if the failure to comply with the following duties is prejudicial to us.”

Further, they continue, “Prepare an inventory of damaged personal property showing the quantity, description, actual cash value and amount of loss. Attach all bills, receipts and related documents that justify the figures in the inventory.”

It also states that they (the insurance companies) have no duty to provide coverage if you fail to comply with their requirements. The requirements can be performed by you or a representative (an inventory service provider, for example).

You must notify your agent or the insurance company promptly. In the case of theft or loss, you must also notify the police. If there is an investigation of your claim, you will be expected to cooperate fully. You’ll be required to prepare an inventory of the damaged items, listing the quantity, description, actual cash value and the amount of your loss. Bills, receipts, appraisal forms and any other documents that support your claim will be requested.

A signed, sworn proof of loss will need to be submitted within 60 days after the insurance company’s request. The proof of loss will state the time and cause of the loss, other insurance that may cover the loss, and the inventory of the personal property.

An insurance agent explained all of this to me in common language. He stated that it means that they have no requirement to pay you anything if you don’t provide the information, documents and other proof they ask for, and have it submitted withing the stated timeframe.

I’ve not heard of anyone yet who hasn’t received any type of settlement, but many did not receive what they needed to properly recover. In fact, most state that their settlement was between 30% and 50% of the cost to replace their belongings.

This shows why it's so important to have your personal property documented for your home and business prior to a disaster. Can you imagine trying to complete that task without a previously prepared inventory - especially when feeling overwhelmed due to the stress you'd be experiencing?

Insurance policies vary. Read yours to make sure you understand what will be expected of you when you file a claim. If you have questions, contact your insurance agent so there are no surprises.