In California, there’s not a lot of case law specific on what an insurer must do for an insured after a loss regarding contents/ personal property claims. If a fire occurs or water loss, an insured is often place in a position where there their worldly possessions are ruin, destroyed, or in need of cleaning or repair. Over the last few months, I’ve been dealing specifically with disgruntled insureds frustrated with how various insurers are dealing with their respective contents issues. For the average insured, a large water or fire loss is, thankfully, a once in a lifetime experience. At those times, an insured is the most vulnerable and looks to their own insurer for guidance. It’s only after an insurer has provided poor or little guidance that an insured comes to me for help through their difficult situation.
I wanted to share an experience by an everyday insured regarding her family’s contents claim in hopes that consumers everywhere can benefit. Recently, an insured has been baffled by their insurer’s reaction when they told their insurer they wanted to hire a contents company due to the overwhelming nature of their fire loss.
During and after the fire, the insured found their home in ruins and contents thrown into piles by the fire department. The insurer told the homeowner they could not have their own contents company and that the insurer not only would not pay for a contents company, but that the insurer would only allow contents to be performed by the insured or the insurer’s own vendor of choice. When the inventory was completed by the insurer’s vendor and the insured questioned multiple missing items such as her shoes and handbags (since it was her bedroom destroyed by the fire), the insurer responded that those items did not exist and were not damaged. Wisely the insured insisted on viewing the photos of the loss taken by the insurer and could point out her shoes and purses in the fire debris. The insurer’s adjuster responded in a surprising and shocking manner: The adjuster accused the insured of placing her shoes and handbags into the fire debris so she could get new ones, and sent the insured to SIU without an ACV payment despite the insured’s rational statements she would not throw her designer purses and handbags into a fire and would have rather have saved them since the majority were purchased over time and not replaceable.
Needless to say, the insured homeowner is appalled at her treatment by the insurance company’s unwillingness to have a neutral contents company and their accusations and nonpayment under the policy.
For inventory, it’s best to have one performed by a neutral party. In fact, in California, your insurer must conduct a reasonable investigation on its own and consider all evidence you have submitted (such as your inventory lists, photographs, blueprints, independent scopes of loss, repair estimates, and appraisals on antiques, art or jewelry) in making the settlement offer. [ See Cal Code of Regulations 2695.7 and 2695.9]. Additionally, depreciation/ACV (Actual Cash Value) holdbacks must be reasonable and not excessive and each item depreciated cannot be done as wholesale. In California, depreciation for each item due to age, wear, etc., must be considered individually rather than a lump sum percentage depreciation for the whole lot of personal property.
Going through contents after a loss is a emotional experience but nobody knows the contents of a home like the homeowner. Know the law and insist on doing your own inventory or hiring a separate contents company that will look at all items objectively and take photos after a loss (preferably before) so you have evidence of your contents. Every insured has a right to an reasonable investigation and objective opinion so if your insurer’s reasoning is stumping you, seek help to have your contents claim properly evaluated.