This is #3 of the Top Ten List of things to do after you’ve had an insured loss…Mitigate your damages. These are excerpts from my book “Insurance Claim Secrets REVEALED!”
Remember, the word “mitigate” is an insurance term that means protecting the property from further damage. This can involve placing tarps over damaged roofing, removing damaged contents, pumping water out of your home or other temporary repairs. The costs for temporary repairs to protect your property are covered in your policy.
You have a responsibility in your policy to mitigate your damages. Depending on your individual situation, that may mean doing something as soon as possible after a loss. If you don’t protect your property from further damage, the insurance company will likely deny the additional damage that will occur.
For example, if you have a windstorm that tears off your shingles. You do nothing to protect the roof and four days later, a big thunderstorm dumps a couple inches of rain on the roof, which causes water damage to ceilings throughout the house. The insurance company would pay to fix the roof, but not the water damage inside.
You may need a restoration contractor to mitigate the damages for you. I wrote about restoration contractors in Chapter Four. Here is a little extra comment about restoration contractors.
You might see many restoration contractors drop by to see if they can help you with temporary repairs, like tarps on roofs, board-up, pumping out water and demolition, and contents removal. Get written estimates from them BEFORE you sign ANYTHING. They will sometimes tell you that they were sent by the insurance company (maybe true, maybe not), and that it is your responsibility to protect your property from further damage (which is true). They may tell you that they will “direct bill” the insurance company (which they may do).
Be very careful on contents removal, sometimes known as “pack out.” The more contents they clean, the more money they make. The cost to clean something is a fraction of the cost to replace it. So, when the restoration contractors are involved, the claim value is reduced, which benefits the insurance company. That is why many adjusters may bring a restoration contractor with them to the loss location. Remember that many policies pay REPLACEMENT COST, and following major fires, large windstorm and water losses, most of your damaged possessions can be replaced instead of being cleaned. Every penny that goes for cleaning your contents comes from the contents limit of liability shown on your policy declarations page. So, theoretically, a substantial amount of your insurance money to replace your items could go to the restoration company to only clean the items!! If the restoration contractor cleans a bunch of your property, and you reject it as unusable, there will be less money for replacement of your property.
The contract for cleaning and restoration of your property will be between you and the contractor…not the contractor and the insurance company.
MAKE SURE YOU ARE IN CONTROL!!
Copyright 2008, Russell D. Longcore. All rights reserved.