How to prepare a successful insurance claim

All you need are these four things:

1. What is the damage?

2. How do you fix it?

3. How much will it cost?

4. Who pays?

Lots of people (and insurance companies) try to argue each issue before moving on to the next. It is more effective to answer all four questions before negotiating with the insurer. At the very least, when you have an argument with the insurer, by arming yourselves with the answers to these four questions, you have perspective on what parts of the insurance claim are important and which are not.

It does appear to make sense to get an agreement on the damage (for example) before getting information on the repair. But this is not the correct approach. It can mean, if you don't get agreement on the damage, the settlement process will just stop.

If, instead you (or preferably, someone with building expertise) prepare a list of all of the damage (perhaps even with photos of the damage) and a description of how to repair all of the damage and a quotation or estimate of the cost to repair the damage, it will go a long way to getting your insurance claim settled.

Why? You a get a complete overview of your claim, your repair strategy makes sense because it is based on the observed damage and the cost makes sense because it is based on the repair strategy and the damage. Also, repair and cost can be assessed against the insurance policy to see whether the repairs are covered. And, it makes it easier for an insurance claims handler to accept and pay your claim if it is fully prepared.

What is the damage?

Make sure you prepare a detailed list of all the damage that you can see that your building has suffered. Ideally make a list down one side of the page and on the other side of the page you might put photographs of the damage. Alternatively, you could number the damage down one side of the page and if you have a collection of photographs on a separate page you can put the corresponding numbers on the photographs.

You could also go room by room and give each room a name for instance: lounge, bedroom 1, bathroom one, upstairs bedroom. You can then list the damage that you observed under each of the room headings. This makes it easy for other people reading the list to navigate the location of the damage.

You could even draw a floor plan of your building, or you could get plan from the council file and identify the damage on that plan. The important thing is to properly describe the damage and describe the location of the damage in enough detail so that someone else reading your list of damage can easily locate and identify the damage to your building.

It's a good idea if you can, to get a professional to prepare a short report identifying the damage. Before you get a professional to do a report it's useful for you to prepare the list yourself because you know your house better than anyone.

There are lots of different professionals who do damage reports in different ways and the cost of the reports can vary wildly from very cheap to mind bogglingly expensive. The best reports are the ones that keep everything simple.  The report should be written in simple language that identifies and describes the damage to the building in one section of the report and sets out in other sections of the report how to fix the damage.

I can help you find an expert that is appropriate for your claim.

How do you fix the damage?

It is preferable that the professional who reports on the damage also reports on how to repair the damage and that the damage and the repair is contained in the same report. The report should first set out the damage and in a separate section set out the scope of works to repair the damage. The scope of works should be a list of work that is necessary to repair the damage. It should be detailed. Don't make any assumptions that the person reading the report knows anything about building. Instead prepare a step-by-step list of absolutely everything that is necessary to do to carry out the repairs. For example, sometimes repairs require fencing to be erected around the house or a broken window to be removed. Even these very basic steps need to be included in the repair scope.

The repair scope should be directly linked to the damage. If it is not clear to somebody reading the scope of work and the section about damage, why certain work is necessary -then it should be explained in the report. Or at the very least the person writing the report should know when they put something into the repair scope why it is necessary.

There are a couple of reasons why certain work might be required to your building after it has suffered damage. The most obvious reason is that it has suffered damage and needs to be repaired. Another reason might be that the building code requires that when the damage is being repaired certain other work is necessary. Also, work might be required to access damage. By this I mean if there is damage to a building element that is under the house and is not accessible without removing the deck, then the deck needs to be removed to conduct the repair.

The scope of works to repair the damage should be set out like a list or a collection of steps because this enables the person preparing the estimate of the cost of the repairs to ensure that they cost every step that is required to repair the building.

How much will it cost?

Again, it is preferable that you get a professional to prepare an estimate or quotation of the cost to repair the damage. For example, a quantity surveyor, builder, or similar type of contractor. It's very useful for the estimate to be detailed. It's even more useful if the estimate follows the steps in the repair scope, or if this is not possible the reader of the estimate should be able to identify which parts of the repair scope that the estimate relates to.  It should be possible to link any part of the estimate to the scope of repair works and to the list of the damage that the building has suffered.  It is not helpful if the estimate is just a lump sum.

Who pays?

Who pays for the repairs depends on the specific words of the insurance policy.  Usually, the policy for a residential house says that the insurance company promises to reinstate your house to a condition that it was in when it was new.  The most that the insurance company will pay is what's called the sum insured.  The sum insured that was in place at the time you suffered the loss will be set out in your insurance policy schedule (the document that the insurance company sends out to you with the invoice to pay your premiums).  I will set out in another short article some more information about interpreting insurance policies and the obligations on insurance companies to reinstate houses.

Give us a call 021 225 7316 or an email andrew@dempseyferguson.co.nz or complete the form at www.dempseyferguson.co.nz if you need a hand with your insurance claim.