by Iwaaant » Wed Sep 19, 2007 07:59 am
The home is in Cal. and the fire was caused by a product that has now been recalled. The company involved is taken resposibility. My problem seems to be with my own insurance. What is the best way to handle the carpet issue?
Posted: Wed Sep 19, 2007 09:04 am Post Subject:
Have I missed something? Is there another part to this question that you posted somewhere else? :?
What is the best way to handle the carpet issue?
What carpet issue?
Posted: Wed Sep 19, 2007 09:52 am Post Subject: Will be reimbursed for the damaged area
Hi Iwaaant, if I am getting you right you will only be reimbursed for the damaged area of the floor.
Do correct me if you have meant something else.
InsAmi
Posted: Wed Sep 19, 2007 10:09 am Post Subject:
InsAmi, This isn't necessarily correct.
you will only be reimbursed for the damaged area of the floor.
First of all you (as an insured) are not "reimbursed" for damaged property, you are paid to replace it or for it's value at the time of loss, "reimbursement" means you must first pay for it, then will be 'reimbursed' or paid back your expense. Very few coverages are on a reimbursement basis.
And if a room of carpet is damaged by a covered loss, let's say as an example, a 2'x 2' area of a 15'x15' room of wall to wall carpeting. The entire rooms carpet will be replaced not just this
damaged area of the floor
. (if that is what you mean by this last quote).Posted: Wed Sep 19, 2007 10:27 am Post Subject: a lot many of them..
True in saying that they get replaced Lori!
But I've also come across a lot many cases wherein the tiles got replaced in proportion to the damages...that is the damaged tiles would only be replaced and not the tiles of the entire floor. That is what the insurance companies would often try to make the insured understand or bargain for.
Now, its quite all right when you say that it could only be judged by going through what the policy papers state.
Anyways, thanks a lot to mention that a large volume of cases are also there wherein the carpet issues are about settling for all the tiles...if what I comprehend is what you actually meant.
Regards, InsAmi
Posted: Wed Sep 19, 2007 10:33 am Post Subject:
Well, that's because it is possible to replace a few tiles (if they can be matched) re:
that is the damaged tiles would only be replaced and not the tiles of the entire floor
...This however is not possible with carpeting, you cannot splice in the damaged portion.I have no idea what you mean by this;
Now, its quite all right when you say that it could only judged by going through what the policy papers state.
or this;
Anyways, thanks a lot to mention that a large volume of cases are also there wherein the carpet issues are about settling for all the tiles...if what I comprehend is what you actually meant.
Posted: Wed Sep 19, 2007 04:26 pm Post Subject:
Hello!
Something to keep in mind when considering coverage under a property insurance policy, such as a homeowner's contract, is that it is always up to the insurer as to whether damaged property is replaced, repaired or cashed out. Most insurers will work with their insureds on an equitable solution, but most are not aware that it's NOT the insured's choice as to how the claim is settled.
Regarding the replacement of the whole carpet vs. simply repairing the damaged areas only. That is up to the insurance company, and if in their opinion you are made "whole" again with a repair, that's the way it will happen.
Property insurance contracts are contracts of "indemnification." That means that you are to be placed in the same approximate financial position that you were in prior to the loss. If the insurer believes that repair will accomplish this, that's what will occur.
As far as the products liability is concerned, you will "subrogate" your rights of recovery to the insurer if they have paid you. In other words, all rights of legal recovery for your damages now belong to the insurance company, and not the insured.
Hope this gives you some info, please let the forum know if there is anything else that you need! Good luck!
InsTeacher 8)
Posted: Wed Sep 19, 2007 04:44 pm Post Subject:
Property insurance contracts are contracts of "indemnification." That means that you are to be placed in the same approximate financial position that you were in prior to the loss. If the insurer believes that repair will accomplish this, that's what will occur.
Not exactly... most HO policies contain a provision for replacement cost. Example: 10 year old microwave is damaged in a covered loss. As long as the insured replaces the microwave with a brand new one, the entire cost is covered (repalced with a brand new microwave).I'm not a property adjuster but I believe in this case that means no depreciation would apply to the repairs.
Posted: Wed Sep 19, 2007 10:56 pm Post Subject:
Tcope,
You're right on target...kind of. When a partial loss occurs, as indicated in the post, the insurer has the right, instead of replacing the entire item with like kind and quality at current cost, to repair only the damaged portion.
If you'll refer to the standard ISO insurance contract for an HO-3, look to Section I - Conditions #3: Loss Settlement and you'll find the following specific language:
"3. Loss Settlement. Covered property losses are settled as follows:
a. Property of the following types:
(1) Personal Property;
(2) Awnings, carpeting, household appliances, outdoor antennas and outdoor equipment, whether or not attached to buildings; and
(3) Structures that are not buildings;
at actual cash value at the time of loss but not more than the amount required to repair or replace."
Keep in mind that it's the insurer's choice whether to repair or replace. If you have, for example, a 16' x 20' carpeted room, and a 2' x 3' section has suffered the loss (say, a fire loss!), the insurer is not going to replace the entire carpeted area. They will repair the damaged area (if possible) and will only replace the whole thing if that's the only choice out there.
Certain types of property, whether considered covered under Part A or Part C, are handled specially. Carpeting is one of those special handling type of losses, the conditions specified are quite clear. Keep in mind that I am citing ISO 2000 forms, the most current HO forms for carriers that use ISO filings. Of course, any carrier can be more lenient to their insureds than ISO calls for.
Also, in closing, please remember that while replacement cost coverage is extremely common for both the dwelling and personal property, in order to actually receive the replacement cost, the item must actually be replaced!
The policy states that in most instances, ACV will be paid initially and the insured then has 180 days to make claim for the replacement cost. Many carriers will waive this requirement for certain losses, especially those situations where a person must replace something, like a roof, although they are not required to!
So Tcope...kinda right, but also kinda wrong! LOL.
InsTeacher 8)
Posted: Thu Nov 15, 2007 05:16 pm Post Subject: house fire
We had an house fire in 05' I was told that I would get an depreciated pay first and then once I purchase the item I would get the total amout for what I claimed I payed for the item, I was also told that sometimes if its been years ago the value of something may have gone up and if so they said they would pay me the difference....for instance I purchased a nice oak wook bedroom suite back in 1995 at that time it cost me 3000.00 and when I went to replace that item in 2005 it cost me 6000.00 well after I purchased it through finiance.......they said that I was misinformed and that they could only pay me up to 3000.00 because that what I paid.....it didn't sound right still doesn't.......any thoughts
Posted: Thu Nov 15, 2007 09:37 pm Post Subject:
I was told that I would get an depreciated pay first and then once I purchase the item I would get the total amout for what I claimed I payed for the item, I was also told that sometimes if its been years ago the value of something may have gone up and if so they said they would pay me the difference....for instance I purchased a nice oak wook bedroom suite back in 1995 at that time it cost me 3000.00 and when I went to replace that item in 2005 it cost me 6000.00
OK...let's get this done. Assuming you have replacement cost coverage for your contents (pretty common), it's important that you understand how the coverage actually works.
First of all, if you look at your policy, you'll see that all losses are initially adjusted on an Actual Cash Value (ACV) basis. That's insurance-speak for the depreciated value. Property insurance is considered an "indemnity" contract. In other words, you cannot profit due to an insurance loss, and at best, you will only be placed back into the approximate financial postition you were in prior to the loss.
Next: let's say your bedroom set had an ACV of $3,000 and it suffered a covered loss, say a fire. It's value at the time of the loss was $3,000. If the insurer actually paid you the $6,000 replacement cost before you actually replaced it, and you decided to use that money for purposes other than buying the $6,000 bedroom set, you have profited from the loss. It was only worth $3k, and you received $6k... a $3,000 profit.
Continuing...the policy also contains language that normally states that you would have 180 days from the date of the loss to actually replace the bedroom set and make claim for the difference between what you were originally paid by the insurer (the $3,000) and the actual cost of replacement ($6,000). So, you would receive that difference ($3k) only after you actually replaced the item. This is how it plays out as there is no language in the policy that states that you are REQUIRED to replace the lost items, and if you didn't actually replace the bedroom set (in our example), you made a profit.
Finally, your questions regarding the value of an item actually increasing over time and compensation for that item if lost. This does NOT apply to your normal household stuff. They are referring to specialty items, such as antiques, collectibles, etc. which may appreciate in value instead of depreciating in value over time.
Keep in mind that all personal property coverages have internal limits that will "limit" your rights of recovery on certain classes of property. Almost exclusively, these are things like jewelry, furs, sterling silver and associated ware, cash, business property, tools, and other items. Look in your policy for the section referred to as "Special Limits on Certain Property or similar language.
Hope this helps, and just ask if you need anything else! Good luck!
InsTeacher 8)
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