Insurance policies for homeowners, renters, and businesses all cover property damage claims. They normally cover damage from fire, ice, snow, smoke, wind, water, vandalism, and theft. They may also cover reimbursement for personal property damaged during an injury event, such as a slip and fall or dog attack.
Property covered under homeowners and business insurance normally includes interior and exterior structures, computers, electronics, jewelry, clothing, appliances, televisions, furniture, and other personal property.
Renter’s insurance covers the same, with the exception of the apartment structure. Some policies will also cover personal property lost or damaged away from the home, business, or apartment.
In this section, we discuss:
- Property damage and personal injury cases
- Identifying the cause of the damage
- Preserving evidence
- Substantiating the value of your damaged property
- Dealing with the insurance company
Property Damage and Personal Injury Claims
A personal injury can happen at the same time as property damage. When another party’s negligent or willful behavior damages personal property, the negligent party is normally liable for the cost of replacing the property. Whether as a result of negligence or an overt act of hostility, injured parties have a right to compensation for their injuries and for their damaged personal property.
Example: Aggressive bouncer
You were in a bar one night with your friends. When a customer complained about the volume of your conversation, one of the bouncers came over and asked you to leave. After arguing for a moment, the bouncer became frustrated and grabbed you, dragged you out of the bar, and threw you to the pavement. As he did, he exerted excessive force and broke your arm.
While in the emergency room, you noticed the force of the impact shattered your prescription glasses and destroyed your expensive cell phone.
Under liability law, the bar owner and bouncer are liable for your personal injuries and the replacement costs of your eyeglasses and cell phone. You would factor the property cost into your total demand for compensation.
Property Damage with No Personal Injury
The same liability theory applies to negligent acts even when there’s no personal injury. For instance, when negligent or willful behavior by one party causes another party to slip and fall, under most circumstances the negligent party is responsible for the replacement costs of any damaged personal property, regardless of injury.
Example: Jewelry damaged in fall
While on your way to work one morning, you stopped at a local convenience store. As you walked in, you slipped and fell on coffee that spilled on the floor about an hour before. Fortunately, you weren’t hurt, but the crystal on your new watch cracked into hundreds of pieces.
This is a clear instance of store liability. The spilled coffee should have been cleaned up moments after it happened, not left there for an hour. In this case, the store owner is liable for the replacement cost of the damaged watch.
Property Damage Claims and Work Accidents
Employers have a duty to keep the work environment safe for employees. Worker’s compensation insurance covers employee injuries, but doesn’t cover their damaged personal property.
Unfortunately, when there’s damage to an employee’s property while working, the employee must fend for herself. She has to ask for compensation directly from the employer, whether through personal negotiations, or by way of stated policies in an existing employee manual.
Filing a Claim Under Your Own Policy
The property damage claims process begins with identifying the cause of the damage, such as weather, vandalism or theft. While the actual damage or loss may seem obvious, the cause is less clear. It’s important to know exactly what happened to your property before filing a claim. Your insurance company needs to know the specific property damage or loss.
Example: Apartment break-in
You come home to your apartment one evening to find someone had broken in during the day. After calling 911, you begin looking around to see what items are gone, and unfortunately, one of the items is your brand-new, high-end computer. When you looked at the door to your apartment, you noticed someone pried open the door hinge.
It’s obvious the loss of your computer was the result of a break-in and theft.
Getting a copy of the police report will help when filing the insurance claim. It will include the police officer’s verification of the break-in and a notation about the loss of your computer. Theft is a covered cause under most insurance policies.
Preserving the Evidence
Your insurance company requires evidence substantiating your property damage claim. The more evidence you have, the stronger your claim is, and the harder it is for the insurance company to deny it.
Example: Tree falls on car
Lightning hit a neighbor’s tree. When the lightning struck, the tree cracked in half and toppled over onto your driveway, landing on top of your car. The weight of the tree dented the hood of your car and cracked the windshield.
Photos and video of the scene are very important. Turn on the date and time stamp function of your digital camera. If you don’t have one, use your cell phone camera. Make sure you preserve the scene as it was at or about the time of the property damage. You want to leave no doubt in the claims adjuster’s mind your neighbor’s tree and nothing else directly caused your car damage.
Proving the Value of Your Damaged Property
Some insurance policies cover property replacement costs, while others cover cash value. To receive reimbursement for your loss, it’s vital to have original receipts. When original receipts are unavailable, contact the store where you purchased the property and ask for copies. Get estimates for property that needs repair.
If it was absolutely necessary to get immediate repairs to prevent further destruction or loss to your property, save the invoices or repair bills. Where possible, put together a list of serial numbers of stolen property.
Example: Dropped camera in a pool
While vacationing in Florida, you dropped your brand-new digital camera in the pool, and the water destroyed it. Your homeowners policy covers personal property that’s damaged or stolen away from home. As soon as you returned home, you dug through the junk drawer in the kitchen and found the receipt. Because your homeowners policy covers replacement costs, the receipt is all you need to get reimbursement.
In cases of minor claims, where loss is hard to prove, insurance companies will usually pay the claim anyway. Of course, one too many claims and the insurance company will think something’s amiss. As a result, they may refuse to pay, raise your premiums, fail to renew, or cancel your policy. Fictitious claims aren’t only morally wrong, they’re against the law.
Dealing With the Insurance Company
Be prepared. The insurance company’s claims adjuster has to legitimize any compensation she requests from the home office. She needs as much evidence as possible showing the cause of your property damage.
This is why taking photographs and video to preserve the scene is so important. Also, where possible, save damaged property. The adjuster will need to see it. If it was necessary to make immediate repairs in emergencies, offer the claims adjuster copies of the invoices or repair bills.
If you can stop additional property damage from happening, you must. It’s called “mitigating” (lessening) your damages. If you fail to mitigate your damages, the insurance company may not pay for any additional damage that happened after the time you could have prevented it. If a crime was involved, be sure to give a copy of the police report to the adjuster as well.
Example: Water damage
A pipe burst in your business and water seeped through the ceiling onto your inventory of furniture below. You need to call a plumber immediately to come and repair the pipe. While waiting for the plumber, you must move the furniture out of harm’s way, or cover it, doing all you can to prevent further damage. Take photos and video of the leaking ceiling and the damaged furniture beneath it.
Insurance adjusters are notorious for paying as little as possible in property damage claims. They look for any crack in your evidence. If the adjuster can find a weakness in your claim, she’ll offer less money than your damaged property may really be worth.
Some adjusters can be as slick as a good used car salesman, so never accept the first offer. The adjuster may try to convince you she’s doing you a favor, or make like if you don’t accept her offer, she may withdraw it. If you do your homework by identifying the cause, preserving the evidence, and properly substantiating the value of your damage, then stick to your guns.
If you’re not comfortable with the adjuster’s offer and she won’t budge, you can always tell her you may hire an attorney. Adjusters want to settle claims as quickly as possible. The last thing she wants is an unpaid pending claim and the possibility of an attorney entering the picture.
If you have to file a property damage claim, you’ll need to pay your policy’s deductible. Your deductible is the amount the insurance company will deduct from what they pay to you. Deductibles can range from $50 to $2,500 and more. They vary depending on whether your policy is for a home, business, or rental. The smaller the premium you pay the higher your deductible usually is.
Example: Smoke damaged carpeting
Smoke from a kitchen fire engulfed and ruined the carpeting in your home. The cost of replacing the carpeting throughout your home is $4,500. Unfortunately, when you purchased your homeowners insurance you never thought about the possibility of a fire ruining all the carpeting, so you chose a $2,500 premium. Consequently, the insurance company sent you a check for $2,000; you’re responsible for the rest.
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