Property Insurance Claims: Negotiating Unfamiliar Terrain



...the key steps to take will save you time, trouble and money. This issue of Adjusting Today examines some of the “dos” and “don’ts” you should know to effectively file your insurance claim and eliminate the pitfalls that often hinder a fair and timely insurance recovery.

First Steps

Your insurance policy is a contract between you and your carrier. As the insured, you have certain duties and responsibilities in the event of a loss. As outlined in your policy, in addition to notifying your insurer, one of your first “to dos” during the first crucial hours following a disaster is to take all reasonable steps to preserve and protect the insured property. There are two major concerns: 1) Preventing injury 2) Protecting your property from further damage.

What is practical and reasonable will vary from loss to loss, but you are required to take such actions as securing the property to prevent additional problems like looting, and to protect it against further damage from the elements. If reasonable post-loss actions that could have prevented further damage are not carried out, coverage on the resulting loss might be denied. For example, spraying oil on motors and other moving parts could prevent serious rusting that might destroy an otherwise repairable piece of equipment.

Also, special attention to computer- controlled equipment and other electronics is imperative. Smoke residue can often corrode electronic components quickly.

Controlling access to the premises is also a must. It may be prudent to hire guards to protect the property and prevent curiosity seekers from becoming injured. If the building is unsafe, you may need to demolish risky areas to avoid further damage and possible injuries.

You might also consider moving property to another location to prevent exposure damage or theft. Special attention should be given to saving irreplaceable property such as books, manuscripts and the like.

A plan should also be developed to protect your operations and market, including notification of the loss to your customers, banks and suppliers. This plan should include a public relations program, with one spokesperson, to keep all stakeholders and the general public informed. It is important that you be the first source of information for your customers and the media.

When notifying your insurance company of the loss, whether you call the carrier directly or report the loss to your agent/broker, you are likely to be asked, “How much is your loss?” Be very careful how you answer this question! Your response can set the tone for the rest of your claim adjustment. Avoid being forced to guess at a dollar amount you aren’t sure of. You are not required to give a dollar estimate at this time. This is a very critical point! The insurance company will establish a reserve of funds for your claim. If you estimate a lower value than your actual loss, it becomes more difficult to settle at a sum higher than that reserve amount.


Your insurance policy is a contract between you and your carrier. As the insured, you have certain duties and responsibilities.