How to Make the Most of an Underinsured Loss

2 ADJUSTINGTODAY.COM There are a few sections in the policy where you can anticipate finding extra insurance to help cover the loss. an underinsured property loss. These “Ten Commandments of Handling the Underinsured Loss” are as follows: 1. Consult with your agent or broker. 2. Obtain a complete certified copy of the insurance policy. 3. Be creative in interpreting the policy for hidden/additional coverage. 4. Investigate the potential for third-party recovery in the case of negligence (subrogation). 5. Work with the insurance company adjuster (don’t hesitate to ask for help). 6. Request advance payments. 7. Critically analyze the necessity of all restoration activities. 8. Negotiate with all vendors. 9. Investigate tax relief and/or government benefits. 10. Investigate legal options. Before addressing how best to handle an underinsured loss, we would be remiss if the first step was not to advise readers of the importance of making every effort to insure to value prior to a loss. This advice is fundamental, but it is surprising howmany insureds fail to properly insure their risks. Often the error is the result of a simple thing, such as failing to inform the agent or broker of renovations, additions or significant acquisitions. Other times, it is the result of not spending the necessary time with an agent or broker going over the details of the risk. Insuring to value can be very complicated. It has been, and will continue to be, the topic of many articles and books. As such, we will not get into the details of insuring to value in this article. However, it is recommended that insureds meet with their agent or broker annually to review their policy. They must take the time to fully describe their business operations and property to the agent or broker, as these advisers cannot properly counsel how to insure a risk until they fully understand the risk themselves. It is also helpful to discuss coverage with a professional public insurance adjuster, whose expertise is focused on the complications and details of the claim settlement process. The public adjuster’s experience in reviewing and calculating values post-loss provides themwith unique pre-loss insights into often-overlooked areas of coverage. It allows the insured to more effectively value real property, personal property and potential loss of income. Public adjusters can look at an insurance policy from the perspective of how it may be applied post loss and, as a disinterested third party, advise of the possible need for certain additional coverages, such as code upgrade coverage. That being said, let’s look at what to do after the loss: 1. Consult withYour Agent or Broker Immediately following the loss, it is important to discuss the policy with the agent or broker. It is possible that the loss is not, in fact, underinsured. A quick review of a current insurance declarations page will help identify any potential problems. Additionally, many of the more complex policies — especially manuscript policies — list various coverages under multiple headings rather than the traditional “Building,”“Business Personal Property”