Long-time readers of my blogs know that I think it important to thoughtfully and clearly state to an insurer what is damaged and the amount to repair it. I think insurance policies and state law require this clarity. Because that is so, insurers should always allow an insured to supplement a claim, but there is a catch – only when reporting damage that was previously unknown or unknowable. The following is how the claims process should unfold in such a way as to allow a supplement.
Insurance policies, and the laws that regulate insurers, do not support the idea of an insured property owner stating a hypothetical of possible damage. Insurance policies do not contemplate a property owner doing nothing more than dialing up an insurer and saying, “come take a look for any damage”. To file an insurance claim is to tell an insurer “there is damage”. An insurance claim is a statement.
I understand that the first few hours after a fire; a hail or wind storm; or a lightning strike, an insured property owner will not know the full extent of the damage and the price. No reasonable insurer would expect that either with the first phone call or email. However, for a partial loss event (as opposed to a total loss), which is most insurance claims, the insurer does have the right to insist the property owner take a position on the scope of loss. This is a good thing need to supplement later.
Insured property owners should expect an insurer to “do its job”, assess the damage, and make an adjustment. Yet insurance policies and the law do not allow an insured property owner to dump the entire scope of loss on the insurer. That returns to the original principle stated above: to file an insurance claim is to make a statement. The statement is: there is damage. The insured property owner needs to state the extent of it and the cost to address it.
This process allows a later supplement. Insured property owners, under most insurance policies, require a property owner to state what is known or knowable, not a hypothetical. Often an insurer will require a property owner to sign a proof of loss, which is a formal statement, before a notary and under oath, of what is damaged and the cost of it. In other words, what is known to be damaged or knowable. If damage is unknown or unknowable, it would be wrong to put that in a proof of loss or any kind of definitive statement of what is damaged.
As such, if further damage becomes apparent after walls and roofs are opened, it is appropriate to supplement the claim. An insurer should not refuse a supplement to the original claim if the damage was not knowable. To require otherwise is to make a mockery of the duty of insured property owners to report actual, known damage, not a hypothetical. If an insurer objects to a later supplement, the first response from the property owner ought to be, “you only wanted known damage before. I couldn’t report that which I could not know.”
This scenario demonstrates the value of a good contractor or public adjuster who works for a property owner. The original statement of loss from the property owner ought to be comprehensive and report the full extent of what was known or knowable with a reasonable inspection. If that first report was thorough, the later supplement should be considered and allowed.
Contact me if you have questions about supplementing a claim at ed@beckmannlawfirm.com.
Ed