The Fire Damage Claims Insurance Process

If you are a victim of a fire, please do not hesitate to contact us today!

​The Fire Damage Victims' Support Association is committed to providing impartial information from a variety of perspectives that we hope will assist in the decision making of businesses and individuals struggling to cope in the aftermath of a fire.

After providing your agent and/or insurer with certain fundamental information about the fire, you are likely to be assigned an Adjuster, sometimes called a claims representative.  An amicable relationship with your insurer's representative can be put to the test if/when differences arise concerning the repair or replacement cost of damaged property. Insurers and Insurance Claim Advocates tend to disagree as to whether the insurance company representative is able to remain impartial when making these determinations, but there is no disagreement concerning the importance of this relationship.

Coverage
The adjuster handling your claim is typically responsible for, among other things, ensuring a prudent and expeditious investigation into insurance coverage (this includes such things as applicable policy limits, sublimits and any additional coverage that may apply). In the absence of fraud, fire is almost always considered to be a "covered" cause of loss (as long as you have active insurance coverage and an insurable interest in the fire damaged property).

Repair Estimates
​Insurance company Claim Representatives/Adjusters are frequently asked to prepare a repair estimate based upon a specified scope of damage. Ideally this repair cost allowance is sufficient to repair/replace all of the damaged property with like kind and quality. It will not, however, reimburse you for any applicable deductible or any Insurance Claim Advocate fees that you decide to incur.

Replacement Cost Coverage
​Replacement Cost coverage is sometimes available for Buildings, Personal Property, or Business Property. The existence of Replacement Cost Coverage does not necessarily mean, however, that you will realize the full replacement value of damaged property (as many are surprised to learn)...at least not until (and unless) you fulfill the Replacement Cost requirements that have been set forth in the provisions of the policy. Such requirements frequently include completing the agreed upon repairs (or replacing the damaged business/personal property) and providing evidence that you've paid the full, agreed amount.

​Actual Cash Value
Once an undisputed settlement amount has been agreed to, the insurer owes the depreciated value of any repairs (or damaged property). This depreciated value is often referred to as Actual Cash Value. The Replacement Cost portion that is withheld pending fulfillment of the Replacement Cost provisions is sometimes referred to as Replacement Cost Holdback or Recoverable Depreciation.

Settlement
​Ideally you will be able to agree with your insurer as to the full cost of repair or replacement and a fair/reasonable amount of depreciation that should apply. Unfortunately, the extent to which you and your insurer will be able to reach a mutual understanding as to the value of your claim is not readily ascertainable until much later on in the process.

Impasse
​Failing to reach an agreement, both you and the insurer have the option  (under most policies) to declare "Appraisal" (in certain states a similar process may be referred to as "Reference"). Appraisal is a binding arbitration-like procedure that is spelled out in the provisions of your policy. Everyone seems to agree that this process should only be considered as a last resort.

​*This overview of the Claim Process is not intended to be a comprehensive analysis, or any kind of substitute for the actual terms & provisions of your insurance policy (a complete copy of which should be provided to you by your insurer). For more information you are encouraged to contact your professional insurance &/or legal representative.