When you have had a loss to your property, you need to be aware that your property insurance policy has several requirements that you, the policyholder, must meet to be able to collect on your insurance claim.
Those requirements are set forth in the portion of your policy called “Section 1 Conditions, (2) Duties to an Insured(s)”. In that section of your policy, you will find a list of several things you must do in the event of loss. That list includes the requirement that you submit, to the insurance company’s representative, a highly detailed document that captures all the information required by law about your claim.
This document is required to be filed by a specific date, which can vary from policy to policy and from state to state. In Michigan, the date by which the Proof of Loss document is to be filed is typically 60 days from the date of loss or 60 days from the date the insurance company’s adjuster requests that you file it. Missing the deadline can be fatal to your claim, and the accuracy of the information in the Proof of Loss document is critical. Even a simple error in completing this form can result in the denial of your claim, based on a technicality. It seems completely unfair, but that is the reality of the situation.
The Sworn Statement in Proof of Loss
After you have had a loss and made a claim to your insurance company, the company claim adjuster will provide you with one or two blank pre-printed Proof of Loss forms. The adjuster won’t help you complete the form because they want all the information to come from you. You then have to try and figure out what information needs to be filled in the blanks on the form.
We also provide our clients with assistance in completing and submitting your Proof of Loss form to your insurance company. Unlike the Proof of Loss forms that the insurance company adjuster may provide to you, ours includes additional language in some sections that attempt to reserve your right to correct any errors, omissions and the like so that you don’t jeopardize your ability to collect on your claim.
The insurance company will rely on your submitted Proof of Loss document to accurately represent what occurred, when it occurred and where, your interest in the property that was lost or damaged, and the amount you are claiming that you feel should be paid to you for your loss. While that may seem pretty forthright, it is anything but. The document is “sworn” in the presence of a Notary Public and by signing it, you are swearing under oath that the information written on the form is correct and accurate to your best knowledge. This is significant, because it can potentially be used against you if and when the insurance company decides to employ another tool they have at their disposal: The examination under oath (EUO).
The examination under oath is used when the insurance adjuster believes there is something “off” about your claim and they believe there may be insurance fraud being attempted. The examination under oath will be addressed in further detail in another article that we will provide to you, which explains the EUO process.
There are two sides to the Proof of Loss document, and very specific and detailed information is filled in on both the front and back sides.
The amount of your replacement cost claim and the amount of your actual cash value claim must both be determined. The replacement cost claim is only payable after you actually repair or replace your property, so a depreciated amount is calculated and that is paid to you after the loss adjustment process has been completed. Sometimes establishing those two numbers is quite challenging. You might know that your hail damaged roof will cost $7,500 to replace, but how do you calculate the depreciation to arrive at the actual cash value claim so that you can get funds to begin repairs? If you based your depreciation on age, that might be one way to determine how much to subtract, but age alone isn’t the only factor to consider. Is your damaged roof shingled with 20 year shingles, 25 year shingles, 50 year shingles or something that won’t depreciate much at all, such as slate tiles? Because each property is unique, so is the calculation of the amounts that need to be filled in on the Proof of Loss document.
Should you and the insurance company adjuster disagree on how much depreciation should apply, that could result in your Proof of Loss document being rejected by the insurance company. Should this occur, what then? Do you file an amended Proof of Loss document? The answer is “maybe”. Once you have filed a Proof of Loss, you have met your obligation under the policy requirements and the insurance company is technically not able to demand another Proof of Loss. Practically speaking, you may want to do so to get the adjuster to agree to a different dollar amount so that you can obtain some funds to begin repairs. However, doing
so infers your first one was incorrect and may make the adjuster think your claim is suspicious or that your original Proof of Loss was inflated and thereby constitutes fraud.
The Proof of Loss document is a critical piece of your property insurance claim. Improper completion or untimely submission may result in your losing your right to make your claim. If you miscalculate the replacement cost and actual cash value amounts of your claim, you run the risk of your claim being denied. There is no more important document in the entire claims adjustment process; this can’t be stressed enough. The payment of your claim hinges on the accuracy of this document.
Have no fear, we at Michigan Fire Claims, Inc., will assist you in any way possible to help you steer clear of all the pitfalls insurance companies are counting on. We work for you!