Friday, July 24, 2009

Depreciation Traps

Insurance companies love depreciation.
Depreciation is a loss of value to property because of age or obsolescence. In order for something to depreciate, it must actually lose value over time. Things like paint, roofs, fences and siding all depreciate. How much depends on how well you keep your property.
Insurance companies will pay damage to your property based on a depreciated amount. For instance, if you have a roof with a 20 year lifespan in a storm destroys it when it's 10 years old your insurance company will only pay you 50% of the value of the roof.
Sounds reasonable. It rarely is. If your property is well-maintained your depreciation is probably a fraction of what your insurance company wants to charge you. Also, insurance companies depreciate things such as demolition, debris removal and furniture moving on a regular basis. These are services which cannot be depreciated.
If you have a property loss, carefully review your insurance companies estimate of damages. Challenge any depreciation you think is unfair. Insurance companies save millions of dollars by wrongfully depreciating just about everything. Remember, never except the first estimate, always challenge the insurance companies numbers and, if the company cannot prove its numbers, don't take no for an answer. A little bit of knowledge goes a long way.

Monday, July 13, 2009

Summertime and Storm Damgage

Summertime and storm damage go hand-in-hand. Thunderstorms, flooding, hurricanes and wind can all wreak havoc on your property. You need to be prepared.

This is a great time to read your insurance policy, photograph and record items in your home and make sure you get any insurance questions you have answered before a loss occurs.

Make sure you have adequate insurance. You need to have enough insurance to actually replace your home and property. This typically means that you will need more insurance than the market value of your property in the event your home is destroyed.

If you have a claim, report it to your insurance company immediately. If your claim involves water, get emergency help fast. Water claims turn into mold claims within 24 to 48 hours.

Don't let your insurance company delay your claim. Insist on prompt responses. Document every contact with your insurance company and its adjusters. Remember, you need to be your own best advocate.

Have a safe summer! If you need help with any aspect of an insurance claim go to A little bit of knowledge goes a long way.