Wind Fire Theft Insurance Claims

<B><FONT SIZE=4 COLOR=#000000>Introduction to Property Claims</FONT></B><BR> <BR> Here is how we help you settle property claims. <BR> <BR> We give you free online programs that automate the settlement of property loss claims. One of our easy-to-use tools,<A HREF="Contents2.htm" TITLE="Contents and Personal Property Calculator" TARGET="_top"> Adjuster's Desktop</A>, calculates depreciation, salvage value, actual cash value, or replacement cost of personal property and produces a fully itemized report. Another calculator, <A HREF="Commercial0.htm" TITLE="Building repair calculator." TARGET="_top">Loss Estimator,</A> figures building repair costs. Our <A HREF="roofStart0.htm" TITLE="Suite of roof measuring calculators." TARGET="_blank">roof measuring programs</A> show you how to measure various types of roofs and does all of the area calculations for you! <BR> <BR> We provide Internet links to <A HREF="Shop.htm" TITLE="Shopping at ClaimRep.com" TARGET="_top">online stores</A> that can replace damaged property. The policyholder or adjuster has immediate access to replacement products and prices. <BR> <BR> We also offer guidelines for determining <A HREF="PropRP3.asp" TITLE="Insurance Coverage for Property Loss Claims" TARGET="_blank">coverage</A>. Is the loss due to an insured peril or cause? Do any exclusions apply? Are the policy conditions met? Select the Coverage tab for these.<BR> <BR> <BR> To help with natural disaster response, we offer commonly useful information such as <A HREF="PropRP2.asp" TITLE="Disaster information resources." TARGET="_blank">weather, breakingnews, and emergency services</A>. Look under the Catastrophe tab for these resources<br> <BR> <BR> The process of adjusting a property loss begins with <A HREF="PropRP3.asp" TARGET="_self" TITLE="Evaluation of property insurance coverage issues.">verifying coverage</A>. The first activity is meeting with the insured and authorizing any need protection from further damage. The next step is inspect the property and determine the cause of the loss. If a person caused or contributed to the loss, determine subrogation potential. Next, values of the property as well as the amount of damage must be determined. The cost to restore or replace is the basis for valuation. Incidental losses, such as loss of use or business interruption, are also calculated. The liability of the insurer may be less than the losses depending on the terms of the policy. A proof of loss setting for the insurer's liability is presented to the insured. Finally, a settlement is negotiated.<br> <P>COMMON PROPERTY COVERAGE TERMS</P> <UL> <P ALIGN="left"><A NAME="actual cash value"></A><B>Actual Cash Value.  </B>ACV is determined by the current replacement cost (not the original cost) less depreciation.  It may also be determined by the current retail market value of identical used property.</P> <P ALIGN="left"><A NAME="additional living expense"></A><B>Additional living expense.  </B>The damaged property must be rendered not fit to live in due to a covered peril.  The policy reimburses only for the increase above the insured's normal living expense so the insured household can maintain its normal standard of living.  The policy may alternatively pay the fair rental value of the damaged portion of the insured premises.</P> <P ALIGN="left"><A NAME="all risk"></A><B>All Risk.</B>  An "all risk" policy is not an all loss policy.  To qualify for "all risks of physical loss" coverage, the cause of loss must meet these requirements:</P> </UL> <UL TYPE=circle> <LI><P ALIGN="left"> The loss is direct, not consequential;</P></LI> <LI><P ALIGN="left"> The loss must have been fortuitous, not an inevitable consequence;</P></LI> <LI><P ALIGN="left"> The loss was not the result of an illegal enterprise;</P></LI> <LI><P ALIGN="left"> The loss was not a result of the insured's willful or fraudulent act; and</P></LI> <LI><P ALIGN="left"> The cause of the loss was due to an extraneous agency, not an inherent deficiency.</P></LI> </UL><P ALIGN="left"><A NAME="appraisal"></A><B>Appraisal.</B>  An appraisal may be used if there is a disagreement with the insured on the amount of net income and operating expense in connection with a business interruption claim.  Upon written demand of either the carrier or the insured there would be an appraisal.  Each side selects an appraiser and the selected appraisers jointly select an umpire.  If the two appraisers cannot agree on a selection either may request that the selection be made by a judge of a court having jurisdiction.  The two appraisers then prepare separate reports on their evaluation of net income and operating expenses.   If they fail to agree they submit their differences to the umpire for a decision.  The costs are shared equally.</P> <UL> <P ALIGN="left"> </P> <P ALIGN="left"><A NAME="boiler and machinery"></A><B>Boiler and machinery.</B>  The Boiler and Machinery Coverage Form provides coverage for <U>defined</U> objects caused by an accident.  "Accident" means a sudden and accidental breakdown of the object or a part of the object.  At the time the breakdown occurs, it must manifest itself itself by physical damage to the object that necessitates repair or replacement.  The following is not an accident: depletion, corrosion or erosion; wear and tear; leakage of any valve, fitting, shaft seal, gland packing, joint or connection; breakdown of any vacuum tube, gas tube or brush; breakdown of any electronic computer or electronic data processing equipment, breakdown of any structure or foundation supporting the object or any of its parts; and the functioning of any safety or protective device.  The insured objects are defined by way of endorsements.  (See BM00 25 06 95 and BM00 31 06 06 95, Copyright Insurance Services Office, Inc., 1994)</P> <P ALIGN="left"><A NAME="builders risk"></A><B>Builders risk.</B>  The builders risk coverage form provides coverage at <U>described</U> premises for a building under construction, equipment used to service the building, and building materials and supplies provided that property is intended to be permanently located at or near the building.  Also covered is temporary structures if they are not otherwise insured.  Not covered is land and, if outside the building, lawns, tree, shrubs or plants, antennas and signs.  Additional coverage is provided for debris and pollutant cleanup, preservation of property, fire department charges, and pollutant clean up.  The "additional coverage" may have lower limits and special conditions.  (See CP 00 20 06 95, Copyright, Insurance Services Office, Inc., 1994)</P> <P ALIGN="left"> </P> <P ALIGN="left"><A NAME="business income"></A><B>Business income.</B>  Coverage is provided for net income that would have been earned or incurred if no physical loss or damage had occurred.  Also covered is continuing normal operating expenses incurred, including payroll.  The policy is likely to exclude any loss of business increased by the impact of the covered peril.   The estimated loss of net income should be based upon recent sales covering a span sufficient to account for variations and market cycles.  If sales vary seasonally, determine the comparable sales during the previous seasons corresponding to the time of the loss.  From the net income subtract the savings due to discontinued costs attributable to the business interruption, such as contract labor costs and utilities.  Anticipated loss of business subsequent to the interruption must be clearly validated.  (CP 00 30 06 95, Copyright Insurance Services Office, Inc., 1994)</P> <P ALIGN="left"><A NAME="causes of loss"></A><B>Causes of loss.</B>  The covered causes of loss, also known as perils, is dependent upon the form.  Common ISO forms are Homeowner 3 Special Form (HO 00 03 04 91), Homeowners 2 Broad Form (HO 00 02 04 91), Homeowners 6 Unit-Owners Form (HO 00 06 04 91), Causes of Loss - Basic Form (CP 10 10 06 95), Causes of Loss - Broad Form (CP 10 20 06 95) and Farm Property Coverage Form (FP 00 10 09 94).  Descriptions of various perils.  (Copyright, Insurance Services Office, Inc., 1994)</P> <P ALIGN="left"><A NAME="coinsurance"></A><B>Coinsurance.</B>  If the amount of insurance or limit may be less than the full value but not less than the coinsurance percentage applied to the full amount, there is no penalty.  It the limit is less than the coinsurance percentage, usually 80%, either a penalty is applied or replacement cost coverage is not extended.  To apply the penalty divide the limit by the amount you get when you multiply the coinsurance percentage by the value of the property.  Next, multiply that figure by the total loss.  After the deductible is subtracted, the loss paid is either that amount or the amount of insurance, whichever is less.  If the amount of insurance is $250,000 and the coinsurance is 90%, the limit must be $225,000 to avoid a coinsurance penalty.  If the limit is $200,000, and the loss is $100,000 and the deductible is $1000, here is the formula: ($200,000 / ($250,000 X .90)) X $100,000) -  $1000 =  $87,888.88.</P> <P ALIGN="left"> </P> <P ALIGN="left"><A NAME="deductible"></A><B>Deductible.  </B>There are several types of deductibles, two of which are common: (1) the straight deductible where a stipulated figure is subtracted from the loss, and (2) the disappearing deductible in which the amount specified in the deductible clause is subtracted from the loss and the difference is multiplied by a percentage.  This is designed so that when the loss exceeds a certain amount the deductible does not apply.</P> <P ALIGN="left"> </P> <P ALIGN="left"><A NAME="depreciation"></A><B>Depreciation.</B>  Depreciation is a decrease in value due to deterioration, lessening of useful function, obsolescence, inadequacy, and a general change in level of prices.  There are three principal causes of  depreciation:  (1) wear and tear, (2) lapse of time, and (3) obsolescence.  There are fundamentally two kinds of depreciation -- physical and functional.  Physical depreciation is a reduction in the intrinsic value of the asset itself and is due to wear and tear and lapse of time.  Functional depreciation is due to the inadequacy or obsolescence of the asset although the asset may be in excellent condition from a physical point of view.  Depreciation on a automobile will illustrate this.  The car depreciates physically by wearing out.  It depreciates functionally by becoming inadequate for the service required, for instance it might not be able to meet current emissions standards.  Both kinds of depreciation is continually occurring.  In any particular case the question of what kind is occurring faster may be subject to varying opinions.  Personal computers are probably the best example of how functional life can be vastly shorter than physical life.  A kitchen appliance is a good example of the opposite, with long functional life and often a much shorter physical life.</P> <P ALIGN="left"><A NAME="exclusions"></A><B>Exclusions.</B>  The causes of loss typically excluded are: the enforcement of any law, any earth movement other than a sinkhole collapse, the seizure or destruction of property by order of a government, nuclear reaction or radiation, loss due only to a failure of power or other utility service, if the failure occurs away from the insured premises, war, including undeclared or civil wars, flood, whether driven by wind or not, under business policies, electrical current, the explosion of steam boilers and equipment that are under the control of the insured (see boiler and machinery coverage), and mechanical breakdown.  <A HREF="Exclusions.htm" TARGET="_top">More information on exclusions</A>.</P> </UL><P ALIGN="left"> </P> <UL><P ALIGN="left"><A NAME="fair rental value"></A><B>Fair rental value.</B>  The fair rental value is paid when that part of an insured, residence premises is rented to others or held for rental, less any expenses that do not continue while the premises is not fit to live in due to a covered peril.</P> <P ALIGN="left"> </P> <P ALIGN="left"><A NAME="limits of liability"></A><B>Limits of liability</B>.  On homeowners forms special limits of liability may apply to cash, precious metals, coins, gold, silver etc.; securities, deeds, manuscripts and other valuable papers; watercraft; trailers; <U>theft</U> of jewelry and watches, <U>theft</U> of firearms, <U>theft</U> of silverware, tea sets etc.; property used for business purposes on or away from the premises; and electronic apparatus.</P> <P ALIGN="left">   </P> <P ALIGN="left"><A NAME="ordinance or law"></A><B>Ordinance or law.</B>  By way of an endorsement coverage is extended for costs associated with the enforcement of an ordinance or law, unless the enforcement involves pollutants.  In the event of damage by a covered peril to at least a part of the building, this endorsement affords coverage for the increased cost to repair, reconstruct or remodel the entire building when the increased cost is a consequence of the enforcement of a building zoning or land use ordinance or law.  The coinsurance condition does not apply.  Replacement cost coverage applies, but with conditions. (See CP 04 05 06 95, Copyright Insurance Services Office, Inc., 1994)</P> <P ALIGN="left"><A NAME="perils"></A><B>Perils.</B>  On a specified-peril form there is no coverage unless the cause of the loss is one of the specified perils.  The commonly specified perils are the following: fire, lightning, wind or hail, explosion, aircraft, spacecraft, missile and vehicle damage, riot -- civil commotion, vandalism and malicious mischief, smoke, theft - burglary - robbery, artificially generated electrical currents, glass breakage, leakage or overflow of water or steam, sinkhole collapse, volcanic action, falling objects, collapse of building, domestic steam or hot water heating system, freezing and change of temperature, weight of snow, ice or sleet, damage to insured property that is the result of removing it from the premises when the premises is endangered by a specified peril. <A HREF="Perils.htm" TARGET="_top">More information on perils.</A></P> </UL><P ALIGN="left"> </P> <UL><P ALIGN="left"><A NAME="personal property"></A><B>Personal property</B>.  Personal property losses under homeowners forms are usually adjusted on an actual cash value basis (ACV).  Personal property is property other than the building.  It is not an integral part of the building. </P> <P ALIGN="left">   </P> <P ALIGN="left"><A NAME="rental value loss"></A><B>Rental value loss.</B>  The insured may recover, for the period of repair, the fair rental value of that portion of the dwelling or appurtenant private structure rented or held for rental.  The normal vacancy factor and discontinued costs should be considered.</P> <P ALIGN="left"> </P> <P ALIGN="left"><A NAME="replacement cost"></A><B>Replacement Cost.</B>  Replacment cost coverage (RC) is an extension of coverage and provides for adjusting the loss without any deduction for depreciation, subject to the provisions of the policy.  Under most homeowners forms the building must be insured to 80 % of its value before the loss.  If the 80 % condition is met, the adjustment is based on the full repair or replacement cost.  It is otherwise based on the greater of the actual cash value of the cost to repair or replace <I>or</I> an amount based on the ratio of the amount of insurance to 80 % of the replacement cost.  Some forms automatically provide RC is under a specified amount.  Generally, RC is not provided for personal property, household appliances, outdoor antennas and outdoor equipment, and structures that are not buildings.</P> </UL>