Tips for Disaster Survivors
- Written by George Kehrer
When you are faced with a disaster loss, you, like almost every other survivor, will be confused and bewildered about the complex new requirements, including insurance, building codes, construction, and tax assessments and tax losses, to necessary to rebuild your life.
Money to rebuild will be a major necessity. You will need funds to get back on your feet.
After its initial investigation, your insurance company may offer “advances” and/or settlement checks in various amounts. You may be hesitant to take them believing “strings” are attached. Our advice is to accept the money as long as nothing is written on or attached to the check that may limit your future recover from the insurance company. Most insurance companies try to lessen the financial strain of your loss with payments within the policy limits.
However, if a letter in the same envelope as the check states that the payment concludes or closes your claim, you should not accept or cash the insurance settlement check unless you are absolutely certain that the insurance company does not owe you a single penny more. If the insurance company still owes money on your insured loss, photocopy the check and send the copy to the insurance company and, in writing, tell them to issue another check and remove any language stating your claim is closed, final or concluded.
The insurance company owes you the “undisputed” amount of your claim. Any money that you and the insurance company agree is owed is called the “undisputed” amount. This can be confusing because if the insurance company offers or pays less than the actual loss, most people would want to question or “dispute” the insufficient payment. They are owed more than what is being paid but the payment is not truly “disputed”. It is the amount that is not being paid that may be in “dispute”. Basically, if the insurance company is making a payment to you, that is not money in “dispute”.
For example, you document and claim that your house will cost $500,000 to rebuild and the insurance company insists it will cost only $300,000. The insurance company owes you, at a minimum, $300,000. $300,000 is the “undisputed” amount. You and the insurance company agree the house will cost at least $300,000. The additional $200,000 is the amount in “dispute”.
Accept the $300,000 as the undisputed amount. Let that money start working for you! However, if you have a mortgage, the insurance company will also include the name of your lender on any check written for the dwelling and other structures (Coverages A and B).
Always write “PARTIAL PAYMENT” above your signature when negotiating your check. Always photocopy both sides of any check. Never negotiate a “final” payment type of check. Get the adjuster to re-issue the check without any final conditions on, or related to accepting, the check.
- Written by Lila Hayes Zubik
MOST FIRE SURVIVORS WILL FIND THEY ARE UNDERINSURED —THROUGH NO FAULT OF THEIR OWN!
The insurance companies, not you, ALMOST ALWAYS determined your coverage amounts. They are the experts—THE “NUMBERS PEOPLE”—not you. Underinsurance, in our opinion, is a result of clever insurance company marketing strategy to protect the insurance industry and not you.
Insurance companies employ sophisticated and robust computer programs, such as Marshall & Swift, to determine your coverage amount. Certain uses of these programs, intentional or unintentional, can create significant inadequate coverage amounts. Since the 2003 firestorm, we have demonstrated that the Marshall & Swift program has the capacity of determining almost exactly, to within a few thousand dollars, the dollar number it would cost to rebuild your totally destroyed home.
- Written by Lila Hayes Zubik
Early on in a claim, most people do not need to get an attorney involved for writing simple letters to the insurance company. Sending a letter on an attorney’s letterhead can raise red flags at the insurance company. If the insurance company thinks you’re represented by an attorney, they can no longer talk to you directly. Until the time that an attorney is clearly needed, stick to these simple letter writing tips.
When writing to your insurance company, a brief, non-threatening letter tends to have the best results. Ask your question or make your statement in as few words as possible. If you can ask or say it in one sentence, you have probably written the perfect letter. Too many words gives the insurance company too many words to possibly use against you rather than for you.
A letter could be, in its entirety, “You promised to send a payment check in the amount of $ XX,XXX a week ago. I have not received it. When can I expect to receive the payment? Thank you for your prompt attention.” Or, you could write, “I received a copy of your edited compilation of my personal property inventory. I noticed that you deducted excessive and unreasonable depreciation from many of our items. Please correct the depreciated amounts or set up an appointment with me to properly assess the depreciated amounts. Thank you for your prompt attention in this matter.”
The following is another example of an effective, one sentence letter that conveys the message and gets the job done:
Policy: [Policy number]
Claim: [Claim Number]
Date of Loss: [Date of Loss]
Loss Address: [Address]
Dear [Adjuster or Adjuster’s supervisor]:
Please send us a copy of our entire insurance policy since our records were lost in the recent fire.