What to do when you have a fire claim
As insurance professionals we hope to assist by helping families understand how their homeowner insurance might respond to a fire situation.
1. Additional Living Expense: If as a result of damage by an insured peril (Fire) your home is unfit for occupancy, the insurer should cover any necessary increase in living expenses, including moving expenses incurred by you, so that your household can maintain its normal standard of living. Payments should be made for reasonable time required to repair or rebuild your dwelling. Keep your receipts.
* It will usually cost more to live and eat at a hotel. There might be additional cost in your day-to-day, for example you might recover:
Cost of moving personal effects to a new temporary location.
Costs to place family pets in a kennel.
Taxi fare's to take children to and from school.
2. Prohibited Access: By order of mass evacuation as a result of a sudden or accidental event within Canada, the insurer should cover any resulting necessary and reasonable increased living expenses incurred by you for the period access is prohibited, not exceeding 2 weeks. Keep your receipts.
3. Obligation - Your insurer is only obligated to pay for "additional living expenses", which means those costs over and above what it would normally cost you to live if the fires have not occurred.
For Example: If your monthly combined expenses (lodging and food) were $1,500/month, and after the fire they are $2,000/month, the amount payable under increased living expenses would be $500/month ($1,500-$2,000).
*It is important to note that coverage does not necessarily continue until such time you actually reoccupy your home or relocate elsewhere. Instead, the duration of coverage is determined by what your insurer deems is a reasonable time.
4. Smoke - Smoke is subject to a restricted definition under the insurance policy. In this case smoke damage would have resulted from a sudden and unusual circumstance. Ask your insurer carrier how smoke damage might be recovered under your insurance policy.
*The above 4 points are based on Advisory Model Wordings.
5. Ask- Call your insurance company to find out what you should do and how your policy will respond exactly. Every insurance company has different wordings and limits payable. Understand what limits you have and what steps you should be taking in order to make sure you receive the full benefits of your insurance policy.
What do you think?
Getting a deal on insurance isn't always a good thing. Unfortunately these things are not often thought about until a claim is denied and you are left paying for a big loss out of pocket. This is a review on some of the critical mistakes made by consumers before their claim is denied.
1. Declaring Modifications - Not just auto, but all insurance policies. If you applied for insurance your application was accepted assuming all things would stay the same. If you upgrade your engine or start selling unknown products, chances are a claim could not go the way you want it to.
2. Commercial VS Personal Use - Although you might save some money by having your business vehicle listed for personal use, chances are your insurance company won't agree with that decision. Make sure you honestly report what the vehicle will be used for.
3. Home-based Business - We used to participate in a local BNI chapter and couldn't believe how many people didn't have their business activities reported on their home insurance policy. It doesn't matter if you are cutting hair, storing inventory or building things in your garage, if an incident occurs as a result of an activity you are receiving compensation for, your claim could potentially be denied.
4. Commercial or Residential Rental Suits - Reporting rental suits is not only beneficial to you, but it is beneficial to your renters. Renters can't claim losses on your insurance and you don't want to be responsible for a claim resulting from your renters. Ask your insurance broker how to structure your insurance when you have renters on your premises.
5. Coverage Limits - Chances are you are unaware of the coverage limits on your insurance policy. Not only do you have to be concerned about co-insurance but you need to be aware of sub-limits on expensive items like equipment collectibles and jewelry to name a few.
Your best insurance is with an Insurance Broker, make sure you as your representative about these important coverage points.
What do you think?
The Base Team
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