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Duties After Loss – What Your Insurance Company Expects from You

May 8, 2014

DrivingWhen you buy a property insurance policy, you’re buying a promise from an insurance company: you’re essentially paying a small amount of money each month to protect yourself, your family, or your business against a much larger loss. So what happens when that loss occurs? While all insurance policies can be different, the Duties After Loss tend to be fairly standard.

Let’s say your kitchen catches on fire, or you accidentally run a red light and hit an oncoming car, or perhaps during a windstorm the shakes on your roof blow away, letting the rain and debris come into your home—what do you do?

According to most insurance policies, you must:

  • Take all reasonable steps to protect the property from further damage. Let’s say that windstorm happens. As soon as it is safe to do so you should attempt to protect your property from further damage. This could mean putting a tarp over the hole or maybe taking furnishings out of the room to protect them from further rain damage. The key word here is “reasonable.” It may not be reasonable for an 80-year-old with a faulty hip to climb on their roof or move a sofa, and it certainly isn’t reasonable to climb on your roof while the windstorm is still happening. So be smart, but if you can keep further damage from happening, do it.
  • Notify the police if the loss occurred due to illegal activities. If your home was broken into, or a suspicious fire breaks out in a dumpster that sets your building on fire, you need to file a police report.
  • Give your insurance company prompt notice of the loss. Your policy should give a timeframe for reporting a loss and it assumes you will act reasonably. Perhaps calling your insurance agent or company while your home is on fire isn’t reasonable – you’re trying to make sure your family is safe, fire fighters have been called, etc. – but calling them within the next day or so is reasonable. Don’t let it wait too long.
  • Provide information. Your insurance company will probably want to know what the loss was, when it happened, where it happened, and how it happened. Be ready to give them all of this information. Pictures of property before the loss occurred can help process the claim.
  • Take an inventory. Your insurer will want an inventory of the items lost or damage so they can begin calculating replacement costs. Your insurance company will probably want to perform an inspection of the property and any records you may have. You will need to allow them access to this information.
  • Give an examination under oath. Your insurance company may ask you to be examined under oath, especially if there is a criminal case that goes to trial. You must be willing to submit to this.
  • Cooperate. Your insurer will expect you to cooperate when they adjust the loss. As they research and determine values, they will expect you to provide information, access to property, testimonial, and more. You may be required to assign subrogation rights to your insurance company. This means that the insurer assumes the right to pursue damages against the at-fault party, if people other than the insured are involved.
  • Provide proof of loss. Your insurer will expect a sworn statement of facts about the loss within a certain time period of the insurer’s request for one; this may be 30 or 60 days.

Other companies may expect more, and in other situations an insurance company may not need you to comply with every item on the list. Insurance contracts are contracts of adhesion: when both you and your insurer agree to the contract, you’re agreeing to it in its entirety, including your duties should a loss occur. While it may sound time-consuming, all of the things your company expects from you will help ensure that your claim is solved as quickly and fairly as possible.

If you have questions about any of the items on the list or any of the duties within your own personal policy…contact your agent! They’re familiar with what companies expect and with what your personal policy requests. If you suffer a loss or need to file a claim, work with your agent and have them explain what’s expected from you.

You can also contact the Consumer Advocacy Division of the Office of the Insurance Commissioner (OIC) if you live in Washington State. If you’re having issues with your insurer, their consumer hotline is 800-562-6900.

Parts of this post are provided based on information from The Institutes: A General Insurance Designation Program.

Article by: Kristen Skinner

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