Event Details
What’s the best way to document property damage and why you should. Understanding what’s important to protect your property and your interests, making it easy for insurance companies and adjusters to understand your Claim, and maximize your benefits.
An informative and interactive session lead by Founders Devin McRae and Peter Scott.
AGENDA | |
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ClaimCraft Team Introduction | 5 min |
Documenting Property Damage Expert Inspections Scope of Repair and what it means to you (and insurance) | 10 min |
Question & Answer LIVE!!! | 45 min |
EVENT REGISTRATION | |
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REGISTRATION LINK | https://claimcraft.zoom.us/meeting/register/2ZoJRDdmSjeXJZHpt_Eoww |
DATE / TIME | April 01, 2025 at 1:00PM PST |
Key Points
The importance of documenting property damage effectively to communicate with insurance carriers and the necessity of using Xactimate for estimates was discussed.
It was advised to get one's own Xactimate estimate done quickly to challenge the carrier's typically low initial estimate.
The process of "stair stepping" by insurance carriers, where they incrementally increase their loss estimate when challenged, was explained.
The potential for manipulation in Xactimate estimates by carriers and the need for a competent review of these estimates was highlighted.
The importance of having a good baseline of the pre-loss condition of the property and the types of documents that can help establish this were discussed.
The process of documenting smoke loss, including the role of an industrial hygienist and remediation contractor, was detailed.
It was recommended to hire one's own industrial hygienist and remediation contractor to ensure an independent assessment.
The Restoration Industry Association (RIA) guidelines were identified as the standard for fire and smoke damage restoration.
The disputes over the cost to restore or replace a dwelling after smoke damage and the varying positions taken by carriers were discussed.
The necessity of an Xactimate estimate for documenting dwelling damage and other relevant documents for different types of damage were emphasized.
Summary
Documenting Property Damage for Insurance Claims
The primary focus of this office hours session was on effectively documenting property damage for insurance claims, particularly for Dwelling Coverage.
Proper documentation is crucial for communicating with insurance carriers and ensuring claims are processed efficiently and fairly.
The discussion emphasized the importance of understanding insurance terminology, coverage types, and industry-standard documentation methods.
Dwelling Coverage and Related Structures
Dwelling coverage encompasses the main home structure as well as appurtenant structures on the property.
Appurtenant structures include sheds, landscaping, hardscaping, pool houses, guest houses, and fencing.
Policies may include 'dwelling extension' coverage, which is a subcategory of dwelling coverage.
When communicating with insurers about damage, it is important to reference the specific dwelling coverage outlined in the policy.
Xactimate Software for Damage Documentation
Insurance carriers prefer damage estimates to be documented using Xactimate software.
Xactimate is a specialized program that functions as an advanced spreadsheet for estimating repair costs.
The software captures room dimensions and detailed repair requirements, including materials (e.g., nails, lumber, plywood, drywall) and labor costs.
Xactimate incorporates dynamic pricing based on geographic location and quality of fixtures and finishes.
Submitting estimates in Xactimate format helps ensure smoother processing by insurance carriers.
Proactive Approach to Damage Estimation
It is recommended that policyholders take initiative and obtain their own damage estimate promptly.
Insurance carriers typically provide lowball estimates initially, so having an independent estimate provides ammunition to challenge their assessment.
Submitting a Policyholder's estimate early makes it harder for carriers to justify significantly lower estimates.
While it may cost a few thousand dollars out of pocket, getting an independent Xactimate estimate can expedite the claim process and set appropriate price expectations.
Insurance Carrier Estimating Practices
Insurance carriers often provide initial estimates that are significantly lower than the actual repair costs.
Some initial estimates have been observed to be less than 10% of the ultimately agreed-upon amount.
Carriers may engage in a 'stair-stepping' process, incrementally increasing their estimate when challenged, which can delay payouts and wear down policyholders.
Having an independent, comprehensive estimate from the outset can help short-circuit this process and lead to fairer settlements.
Importance of Accurate Pre-Loss Condition Documentation
Establishing a clear baseline of the property's pre-loss condition is crucial for accurate damage assessment.
Useful documentation includes recent remodeling plans, building department records, Zillow listings for square footage, and Eagle View aerial photographs.
Appliance manuals can be important for ensuring like-kind-and-quality replacements.
In cases of total loss, recreating the pre-loss condition from memory may be necessary.
Smoke Damage Assessment and Documentation
Smoke damage requires assessment by an independent expert called an industrial hygienist.
Industrial hygienists use methods such as tape lift samples and microvac sampling to test for contamination.
Samples are analyzed in a lab for char, ash contamination, and heavy metals.
The industrial hygienist's report informs the remediation contractor's estimate and plan.
It is advisable to hire an independent industrial hygienist rather than relying solely on the carrier's assessment.
Remediation Scope and Disputes
Disputes often arise regarding the necessary level of remediation for smoke damage.
Carriers may advocate for minimal intervention (e.g., HEPA vacuuming, wiping surfaces) while more thorough remediation may be necessary (e.g., removing drywall, porous materials, HVAC systems).
The Restoration Industry Association (RIA) guidelines serve as an industry standard for remediation procedures.
Policyholders should be aware of these guidelines and reference them in discussions with carriers.
Key Documents for Claim Support
An Xactimate estimate prepared by an independent contractor is the most crucial document for dwelling damage claims.
The RIA guidelines for fire and smoke damage restoration are important reference materials.
For specific items like pools or landscaping, standard contractor estimates may suffice.
Arborist reports and nursery estimates can document damage to trees and outdoor vegetation.
Payment Process and Documentation Requirements
Policyholders are not required to spend money on repairs before submitting claims or receiving initial payments.
Insurance typically pays Actual Cash Value (ACV) upfront, which is Replacement Cost Value (RCV) minus Depreciation.
To receive the full RCV, policyholders must typically provide proof of completed repairs or contracts for replacement.
Simply submitting repair invoices without supporting documentation (e.g., inspections, estimates, expert analysis) is generally insufficient for comprehensive claims.