When you have any insurance claims, you have the obligation to immediately notify the insurance carrier of a claim or an incident that will lead to a claim. The late reporting of a claim can cause the insurance carrier to enforce certain contractual obligations whereby they will deny coverage due to late reporting. They will state that the late reporting prejudiced them to fairly evaluate, mitigate or defend the claim.
If you have a reasonable opportunity to mitigate your property claim while it is in progress or shortly thereafter, you do have the obligation to do so. This could include actions such as calling the police or the fire department, calling a contractor to board up an area to prevent theft, or any reasonable actions at a reasonable cost to lessen the claim that has occurred. Generally, your insurance company will include those costs as part of reimbursement if this is a covered claim.
Also note, that the insurance carrier will require you to prove the claim by providing written data as to the event that lead to the loss. You will provide police reports, a listing of property damaged, along with either the Actual Cash Value of the property or Replacement Cost as insured for and any extra expenses or loss of income if said coverages were extended in the policy, prior to the claim. In other words, you have a large task at hand to prove this claim. Your records for reporting and the assimilating of data can very often be in poor condition and will bar you from receiving the value from which you anticipated.
Remember it is your responsibility to keep proper records including acquisition costs of the property, the make model and year of the property in many cases. Because of the nature of the claim you will want to have pictures of the property that can assist in the insurance adjuster’s evaluation. Kindly remember that your depreciated value from an accounting and tax basis does not necessarily replicate what the depreciated value of the damaged property or its “replacement value” is in the real world, come claim time.
When you have a substantial claim, the insurance company will hire a forensic accountant to assist in their evaluation of a claim. When such a professional is engaged by your insurance carrier, this is the first time that you - if you have not already done so - need to secure legal advice as to the best way to present the claim in order to meet the reasonable needs of your insurance carrier.
That is the way we do it at Bone Robertson & McBride Inc.
Good health to you.