Posted in Insurance on Tue March 6, 2012
From the deep south, through the midwest, and even into the Carolinas, recent bad weather has spawned multiple deadly tornadoes. While we grieve for the lives lost, many are faced with the task of rebuilding.
Undoubtedly, most of you affected will file insurance claims to compensate you for your losses and assist you in restarting your lives. It is important that you read your policy carefully to understand your rights.
In general, insurance policies compensate you in one of two ways: 1) actual cash value, which gives you the appraised value of your property at the time of the damage and incorporates a depreciation deduction, or 2) replacement value, which gives you the value of new items of like quality. Replacement value coverage is usually an insurance add-on that requires a higher premium. When compensating for replacement value, the insurance company will initially pay the actual cash value while withholding the depreciation until repairs are complete, thereby forcing you to front some of the costs. So, though replacement coverage gives you a larger recovery than actual cash value, the burden on you is still great.
Regardless of your policy, you do not have to accept what the insurance company offers. They have appraisers that represent their interests – so should you. Virtually every insurance policy has a quasi-arbitration provision that enables you to hire your own appraiser – the insurance company must comply. Your appraiser and the insurance company’s will select a third-party umpire to determine the amount of your claim.
Additionally, insurance companies have a duty to handle your claim in good faith, without delay, and with the intent to fully compensate you for your loss. Having a knowledgeable attorney in your corner can help expedite the claims process and increase your recovery.
As we enter the turbulent spring months, and while we hope and pray that the devastation of this past year will not repeat itself, it is important to be prepared if and when you face the task of rebuilding.
This blog does not create an attorney-client relationship. You should not rely upon this blog for legal advice, but instead should consult an attorney experienced in your area of concern.