Three-quarters of residential fire costs come from houses without fire sprinklers.
Residential fires in the United States cost about $8.5 billion dollars in 2008. From 1999 to 2008, the cost of residential fires has risen a little under a half billion dollars per year. According to Jim Haines, an insurance industry claims consultant, very few U.S. homes have fire insurance that would fully pay for a total loss.
Instructions
Steps to Take Before a Fire
1. Unless you take preventive steps before a fire, your "replacement cost" insurance will probably not repay your full loss, particularly if a) your house cost more to build than most houses in your neighborhood, b) your house has special features or c) your insurance doesn't have "inflation guard," which is a periodic and automatic insurance company readjustment of the cost of construction and of the annual cost of your policy.
2. All homeowners, and particularly if your house has special features, should fully video-document (and periodically re-document) those features and all your belongings, room by room. Keep detailed cost records.
3. You should consult with your agent annually about replacement costs and the need for additional insurance. Legally, your agent bears responsibility for informing you of increased insurance needs; your post-fire claims become that much stronger if you have a record of consulting with your agent.
4. Your may have "replacement cost" insurance on the house, but only "cash value" on the contents. If so, pay for an endorsement that will pay replacement costs on contents also.
5. If your house costs more than most houses in your neighborhood, every few years you should have your house appraised by a licensed appraiser. An appraiser will often give you a better than normal price for this service if you're doing it to document value for insurance purposes because he can schedule it with a little additional flexibility and because, if you do have a fire, he'll receive substantial expert witness fees.
6. Don't forget to put all records relating to insurance, including your documentation, someplace other than your house. Otherwise your documentation may be destroyed in the fire.
After the Fire
7. Immediately notify your insurance company of the loss by phone, return receipt e-mail and certified mail. Stay in contact throughout the process.
8. If you have to move out during repairs or replacement, ask your carrier for an advance payment to cover your living costs.
9. Submit your follow-up "proof of loss claim" as soon as possible. If many nearby homes suffered fire-loss (as in the Oakland Hills fire in the 1980s), the carrier will adjust the claims in the order it receives them.
10. If you begin to have problems with your carrier, send a detailed business-like letter explaining the problem(s) to your state insurance commissioner. Do this earlier than later. When your carrier gets a copy of the complaint, it will motivate them to solve the problem.
11. Company adjusters will adjust to the low side. Hire your own independent estimator who has experience not only as a builder but with insurance claims.
12. If you can't come to an agreement over costs with your carrier, consider hiring a public licensed adjuster, and consult an attorney specializing in residential fire claims.
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