THE MONEY GAME: WHAT IS THE RESERVE SET AT ON YOUR LOSS?

You and the insurance company have something in common immediately after your fire. “MONEY!” You are expecting to get the “MONEY” you have been paying premium on for so many years and the insurance company is figuring out a way to pay you the least amount of “MONEY” under the terms and conditions within your insurance policy. The type of insurance policy you have and the method of payment is determined by many factors. ASK the insurance adjuster what the RESERVE has been set at on your claim. The adjuster must report back to the insurance company to set aside a reserved amount that he or she thinks is the amount that will ultimately be paid out on your claim. The reserve is a professional guess! You can find out immediately what the insurance adjuster has in mind on paying you based off the reserve that was set! Then you need to ask the adjuster what is the actual cash value amount that will be paid.

Insurance Policy Questions you need to ask to know where you stand immediately after the fire.

• Do you have an actual cash value policy or replacement cost policy?
• If you have an actual cash value policy what is the method the insurance company uses to determine how they will pay you?
  a. Repair less depreciation
  b. Market value less land value
  c. Broad evidence rule
• If you have a replacement cost policy, what type do you have?
  (ask the adjuster how your claim will be paid regarding the actual cash value amount or the upfront money?)
  a. Common material replacement cost
  b. Functional replacement cost
  c. Repair policy
• Modified replacement cost policy
• Other coverages

POTENTIAL COVERAGE LIMITS = ( )

What has taken place since the FIRE?

• Insurance company agent has been called
• Adjuster has been assigned to your claim
• You have been given a claim number
• What is the cause of loss?
• Has the fire site been cleared?
• What paperwork has been signed?
• Have any recorded statements been taken?
• How many people have you been interviewed by?
• Has the adjuster been out to the loss site?
• Did you meet the adjuster out at the loss site?
• Did the insurance adjuster try to bring in their preferred contractor?
• Is the adjuster writing their own scope of damages?
• Are there any other estimates being written and if so by whom?
• Have you gotten a copy of your insurance policy?
• Have you requested a certified copy of your insurance policy yet?
• Did the adjuster give you their opinion on the extent of damages yet?
• Did you receive a duty after the loss letter yet?
• Has a proof of loss been requested yet by the insurance company?
• If you have a mortgage or land contract has a 30 day pay off letter been requested yet?
• Has a market value appraisal of your property been requested yet by the
  insurance company?
• Has a demolition company been sent out yet by the insurance company?
• Have you asked the building department if your property can be repaired and if there would be any issues with pulling a building permit?
• Have you asked the building department or local zoning department if there were any restrictions that would stop the rebuilding process?
• Have you gotten a repair estimate from the insurance company yet? If
• so, are you aware of the fact that there is a replacement cost figure and an actual cash figure?
• Is there a co-insurance penalty in your insurance policy? If so, is it 80% or 90%?
• What is the current market value of the property vs. the mortgage or land contract pay off?
• Is there an Ordinance and Law endorsement in your policy for code upgrades?
• Is there a “Raze Order” that is going to be issued due to the property being severely burned?
• Is there demolition money being deducted from your insurance policy and being sent to your local building department to be escrowed until your property is demolished or repaired?
• Is there a bond that needs to be issued for demolition?
• What draft authority does the insurance adjuster have from the insurance company?
• If an independent adjuster has been assigned to your claim what claim authority and draft authority does, he or she have when it comes time to settle your claim?
• Is there any mold coverage in your policy in the event there is major water damage
• which will promote rapid mold growth?
• What is the amount of the “Board Up Invoice?”
• Are you aware of the fact that all emergency services are DEDUCTED from your insurance policy?

What are your insurance coverage limits?

Dwelling ( )

• Other Structures ( )
  • a. Detached garaged
  • b. Sidewalks
  • c. C. Driveway
  • d. Fence
  • e. Deck

Note: these are all detached items that fall under the additional 10% additional monies. Check to see if 10% is available within policy!

• Business Personal Contents? ( )
• Ordinance and Law ( )

Note: If you have this coverage, it is usually 10% of your building coverage for things that may need to be brought up to code. It depends on the extent of damage and the enforceability by your local building department.

• Loss of Rents Coverage ( )

Lead, Asbestos Testing or Removal Expenses

Options you have:

• Your insurance claim needs to be treated like your investment property! One of the biggest Investments that you have made. Treat it accordingly!
  • a. You remember how hard it was to get started in the investment property field and the sacrifices that you
    made and then it is gone in minutes!
  • b. It is your policy, your insurance money etc.
  • c. It is your duty to PROVE your loss to the insurance company NOT their job to prove the damages to you. Unfortunately, you are most likely not sure of what is or what isn’t the right or wrong way to handle your claim.
  • d. Take Control of your claim! This is the best option you have and will result in the best settlement.
  • e. Cashing Out is an option!
  • f. Repairing your property is an option!
  • g. Replacing offsite is an option!
  • h. Selling your fire damaged property is also an option after your claim is settled!

Professional Representation will result in the best settlement!

CPR CLAIMS is your best route to go! CPR Claims has been representing and assisting the consumer for over 25 years! CPR Claims works for you and not the insurance company! CPR will do the following for you:

CPR Claim will:

• Develop your insurance claim and represent your financial interest on your behalf versus the insurance carrier
• Write the repair estimate and apply the insurance policy language to
• your benefit and not the insurance company.
• Apply retail pricing for like kind and quality of materials throughout the property.
• Resolve all hidden damages, matching issues, code upgrade requirements and properly document within the repair/replacement cost estimate
• Document the length of ownership, previous repairs which ultimately effect the depreciation table application
• Research comparable properties for like kind and quality, market value
• consideration, tax assessment values, rental income, current market conditions for “Broad Evidence Rule Values” if applicable.
• Comply with insurance policy requirements, deadlines and period of restoration time frames.
• Will meet with the insurance company representative at the loss site, reinspection of property when needed, local building officials etc.
• Will assist in requesting mortgage company or land contract pay off
• amounts if applicable
• Will settle insurance claim and propose all offers for your final considerations
• Will coordinate all insurance settlement checks
• Will assist with contractor, contractor required paperwork, contracts, w- 9 forms, waiver of liens, affidavits, statements of loss, proof of loss, official deadline notification to insurance company on 60-day proof of loss submission, 180-day intent to repair or replace notification etc.
• Will handle all recoverable depreciation hold back funds and submit final paperwork necessary to process checks
• Will process all demolition bids to insurance company and recover any direct deposits that were sent to your local building officials to escrow.
• Will process any business personal property inventory claims on a
• replacement cost and actual cash value basis.
• Will produce outbuilding/other structure claim damages if applicable. (These claims or damages include sidewalks, driveway and other items that are damaged or may become damaged during the construction or
• demolition process).
• Will adjust all estimates, negotiate all estimates and ultimately finalizing dollar values with all parties.
• Will settle and negotiate all loss of rents claims and collect the appropriate documentation necessary to obtain insurance checks

How Long will it take to get my/our claim settled?

• The insurance policy usually has a 60 Deadline to file a proof of loss upon the insurance companies request.
• This is why you need to find out if a Proof of Loss has been requested. A proof of loss is a (1) page form that is required and provided to you proving what the insurance company owes you.
• If the Proof of Loss been requested, you have 60 days to present your claim and then the insurance company has 30 or 60 days to either agree with your proof of loss which they usually do not!
• The average amount of time it normally takes to settle a $75,000 to
  $200,000 claim varies. It can be settled in the 60-day time frame or it can take a little longer depending on the resistance level of the insurance adjuster.

Is there a fee?

• Yes! It is normally 10% of the total recovery. You do not pay any
  monies, deposits, retainer type fees etc. You only pay us once we settle the claim for you. The moment you hire our firm the price or damages of your loss immediately go up in many ways.
  a. We find out how the adjuster from the insurance company is approaching your loss
  b. Disagreements are usually resolved quicker once we are involved
  C. The settlement process usually goes quicker since our team of professionals work together to process all the required paperwork in a very timely manner.
  Are there differences in opinions between the adjuster and us on damages?
• Yes! Depending on the extent of damages. Each adjuster looks at each loss in a different way!
• Typical disagreements: The type of replacement cost policy that you have. There is a difference! One pays for the type of materials that were in your property. For example, if you had plaster, large trim, hardwood
  floors, solid core doors etc. Under this type of replacement cost policy
  you would get paid for the type of materials that were in the home. The other type of replacement cost policy is called a modified replacement cost. Since the property owner was not willing to carry the proper replacement cost type insurance limits required under the terms and conditions of the policy, you would be compensated for common materials which would be drywall instead of plaster. The insurance company wants to pay for the lesser expensive type materials.
• Disagreements “equals” lesser money for the property owner if not professionally handled! Between the difference of opinions on the amount of tear out on a property after the fire, differences between code
  upgrade and energy code requirements that may or may not be included in the insurance policy that you have, difference of pricing opinions, differences in total repair and replacement costs, differences of opinions on depreciation tables being used to determine the actual cash value, differences of opinion of determining the actual cash value in a broad evidence rule state where you do not have replacement cost coverage could bankrupt you, put you in a foreclosure type position, put you in a position to have paid premium on much more coverage than you would never ever be able to get your hands on due to the techniques the insurance adjuster is using. You could be harmed beyond repair! WE have many cases where we could have professionally handled the policyholders claim and avoided these types of situations but the “I KNOW IT ALL EPIDEMIC” got them again.

Is there a price to pay?

• Where there are professionals hired there is an investment fee. When you do not use a professional in a situation where you should, the PRICE of not using them could be catastrophic. You are only investing
  “ON PAPER” by signing a contract NOT putting any money down
  when hiring our services. A lot of times the property owner pays the PRICE for not using the professional. This PRICE is “irreparable” almost 100% of the time.
  For a Free Consultation please call! We would be happy to discuss in further details the type of loss, extent of damages, the adjusters reserve, what the adjuster is doing behind the scenes, the communication process that takes place behind the scenes, the type of policy, the type of replacement cost, the type of actual cash value, the techniques or methods the insurance company may use to settle your claim.

Step #1 TAKE CONTROL

• Make sure that all proper mitigation has taken place
• Notify the insurance agent of your loss/ request a certified copy of the insurance policy.
• Notify the mortgage company/ request paperwork and repair procedures.
• If total loss, ask mortgage company for payoff letter (even though you don’t have to pay it off).
• Have the public adjuster fax the contract to the insurance company.
• Make sure that you protect your property from further damage / board-up / put up a no trespassing sign (advise the insurance company, in writing, when done).
• Have public adjuster meet the insurance adjuster at the loss site.
• Contact electrician/ apply for temporary electric.
• Contact heating contractor / temporary heat I apply for turn on.
• Check waterlines / winterize if applicable.
• Provide emergency inventory before packout.
• Contact and assist pack out company in taking only) salvageable and test clean items.
• Leave totaled items at loss site (for inspection).
• Get board-up bill from contractor/ submit to the insurance company for payment.
• Assist dry cleaners in taking only cleanable clothes / get price before they clean clothes.
• Take pictures immediately prior to pack out (room by room).
• Provide an inventory list to pack out company (have them verify cleanable and non-cleanable items).
• Do Not Sign a direct pay contract with a pack out company until your contents claim develops.
• Get a preliminary price from the pack out company (prior to pack out) for everything.
• Check warranties on electrical equipment, computer equipment, cabinets, carpet flooring, fixtures, appliances, hard goods (get written letters from all manufacturers).
• Find out if the insurance company adjuster has any authority.
• Test clean electronics, computers, cabinets, carpets, fixtures, appliances, and hard goods, for possible salvage (get estimate of cost before this is done).
• If a total loss, get demolition bid (2 estimates)
• If a total loss, check P.A. 495 hold-back (find out if the insurance company has sent this check to your local township).
• Before any cleaning of contents, get a written estimate from the cleaning company.
• Do not sign a contract with a contractor … until???
• Request a cash advance from the insurance company / keep track of how you spend your money.
• Set-up temporary living arrangements/ get the insurance company to agree.
• Set-up necessary rental furniture/ if needed/ get the insurance company to agree.
• Set-up direct payment of temporary living with the insurance company if possible.
• Obtain, in writing, from the mortgage company, that it is ok to rebuild or repair your property.
• Obtain, in writing, from the mortgage company that all payments are current.
• Invite, in writing, the insurance company out to the loss site for the inventory process.
• Set-up appointment at pack out company to review items.
• Continue to make mortgage payments throughout loss.
• Send letter to local code enforcement and cc: a copy to the insurance company regarding the progress of the claim.
• Make sure all debris is out of the yard / avoid code enforcement bills.
• In the event of a “total loss” or severe damage, check the building department for the “green light” for rebuilding.
• Ask the insurance company what they set your reserves at.
• Find out how a total loss is paid out on your structure and contents claim.
• Make sure to find out if your mortgage has been recently sold to avoid reissuing of checks
• If you are in a bankruptcy or foreclosure, review possible complications in advance.
• If your loss is arson, learn how to move your claim along more efficiently.
• In the event of a “total loss” check policy provision for replacing off-site. If so, get in writing from the insurance company that it is ok.
• Keep track of all expenditures (every dollar that is spent).
• In the event of a “total loss” check with local realtor on new market value before you decide to rebuild/ check new home worth (value before you rebuild).
• Document all normal living costs.
• Check on refinancing possibilities before rebuilding with possible lower interest rates.
• Check on selling home (or) building as is … before rebuilding (cashing out).
• Check local ordinance of demolition hold back.
• Check with building department for any possible code violations with property.
• Find out how much check writing authority adjuster has.

Step #2 PLAN OF ACTION… THIS IS A VERY CRITICAL STAGE OF YOUR CLAIM!

• Review your insurance policy, deck sheet and endorsements/ get certified copy of policy
• Determine all your insurance coverage amounts and extended amounts
• Determine what type of replacement cost policy and potential similar/common material issues
• Determine what your limitations are (how the up-front money is paid out).
• Determine what your exclusions are (structure).
• Write structure appraisal / room by room.
• Establish and document square footage and linear footage unit costs on structure.
• Establish problem areas… hidden smoke, damaged drywall tape, heat damaged comers etc.
• Take pictures on a room-by-room basis (structure).
• Get supporting documentation of big-ticket items (structure) … custom features throughout
• Determine line by line depreciation based on age and recent remodeling
• Look at type of framing, extent of smoked framing and or burnt framing
• Document mechanical estimates and document possible code upgrades that will be enforced
• Start contents inventory process after initial inventory list.
• If contents are totaled … utilize prompter pads.
• List contents on a room-by-room basis (take pictures).
• Establish quality and quantity of contents, along with proper aging.
• Establish documented depreciation on each item (contents) by public adjuster and insurance adjuster.
• Establish documented actual cash value on a line-by-line basis (contents).
• Establish documented recoverable depreciation on a line-by-line basis (contents).
• Get landscaping estimate (fire damage items only) and relocating shrubbery and/or plants.
• Get construction utilities projections (throughout repair time).
• Establish agreed pack out bill cost (you may decide to keep these funds and clean the contents yourself).
• Establish agreed hard goods refinishing costs, restoration costs. (contents)
• Establish agreed storage bill for contents.
• Establish agreed bill for moving contents back to the house.
• Establish agreed bill for putting contents back in place.
• Document/ support new contents items (receipts, credit cards, etc.)
• Check all deadlines within insurance policy.
• Insured needs to be aware of cashing out, repairing, or replacing off site, doing repairs themself (options).
• Establish who keeps the salvage.

Step #3 TAKE ACTION… NEGOTIATION TIME

• Compile all documented paperwork.
• Structure estimate, deadline notification, ACV and RC figures.
• Contents list, 10 entries per line (on inventory forms).
• Additional living expenses submission (expenses over and beyond your normal expenses).
• Provide a Proof of Loss/ notarized to the insurance company (within requested time).
• Consult with a contractor (or an engineer), if necessary, to get second opinion (one that does not work with the insurance company).
• Set appointment with the insurance company adjuster.
• Walk through “loss site” and agree to contents list with the insurance company.
• Agree with the insurance adjuster on contents/ aging, pricing, depreciation, and recoverable depreciation.
• Agree with the insurance adjuster on dry cleaning, packout, storage, refinishing, reupholstery, pack in and put back in place costs.
• Agree with insurance adjuster on structure scope, unit costs, line by line depreciation, actual cash value and recoverable depreciation.
• Check with local township for “debris removal” hold back (PA 495).
• Agree with insurance company, in writing, to the “length of time” for repairs after contractor is hired.
• Agree with the insurance company on all additional living expenses (decorating allowance).
• The insured can sit in on all meetings if they want (not productive but sometimes necessary).
• If applicable, do a spreadsheet on all insurance company contractors estimates.
• If an agreement cannot be reached … the appraisal process is an option.
• Once agreement is reached – how long to process checks (could be up to 30 days).
• Check to see if the insurance company sends contents lists to a pricing company (find out which one).
• Check to see if the insurance company hires an outside inventory company and who pays them

Step #4 ACCEPTANCE OF SETTLEMENT

• CPR will layout the insurance company’s offer to you, the insured (BEFORE accepting any offers).
• Structure replacement cost evaluations.
• Structure actual cash value evaluations.
• Other structure replacement cost (if applicable) evaluations.
• Other structure actual cash value (if applicable) evaluations.
• Structure 5% debris removal and other structure 5% debris removal evaluations.
• Contents replacement cost evaluations.
• Contents actual cash value evaluations.
• Contents 5% debris removal evaluations.
• Applicable tree, shrubs and lawn damages evaluations.
• Applicable code improvement additional coverage evaluations.
• Agreed additional living expenses evaluations.
• Submit structure replacement cost letter and contents replacement cost letter.
• Agree on all structure and contents replacement cost deadlines.
• Predetermine problem areas and resolutions.

Step #5 CONTRACTOR SELECTION PROCESS

• Make sure the contractor does not “spike” your job.
• Ask the contractor for 4 or 5 references.
• Set up an appointment with these referrals to inspect work.
• Ask the homeowner I business owner the top 3 reasons why they hired the contractor.
• Ask the homeowner I business owner if the contractor started repairs on time and finished on time.
• Ask the homeowner / business owner if the contractor provided a written smoke loss warranty.
• Read the contractor’s contract.
• Make sure there is no direct payment clause.
• Make sure all code violations / code improvements are discussed and put in writing if there are to be any additional costs.
• Make sure to ask the contractor for proof of insurance.
• Make sure the contractor does not remove the contents from the house until authorized.
• Make sure the insurance proceeds are put into an escrow account with 2 or more signatures required to endorse checks (if there isn’t a mortgage).
• Make sure the contractor’s contract includes a start date and completion date.
• Make sure the contractor specifies how many Monday-Fridays the job will take.
• Make sure the contractor and the insurance company agree in writing on how long the job will take.
• Make sure anyone who works on your home / business are licensed and bonded (electricians, heating and plumbing contractors).
• Make sure the contractor’s contract includes budgets, exact costs for each item.
• Ask for proof of payment with contractor (make sure contractor is paying your bills).
• Light fixture allowance (labor and material).
• Brand name, type of kitchen cabinets (labor and material).
• Type of kitchen door hardware (labor and material).
• Quality of countertops (labor and material).
• Sinks, hardware (brand names and serial #’s) (labor and material).• Brand name, weight of carpet (labor and material).
• Weight of pad (labor and material).
• Brand name, type and quality of interior painting.
• Type and quality of interior door trim.
• How many coats of paint is being used?
• Are you rolling or spraying the paint?
• Is the paint flat, semi-gloss, or oil?
• Is the trim being brushed or sprayed?
• Brand name, type of siding being used (labor and material).
• Brand name, type of vinyl flooring (labor and material).
• Brand name, type of shingle being used.
• Type of interior doors and hardware.
• Brand name, type of windows.
• Are window coverings in structure estimate or contents estimate?
• Is the contractor caulking before painting?
• Is the contractor paying for the construction utilities?
• Color of fixtures, cabinets, shingles, flooring, countertops.
• Get serial# of color samples to avoid conflicts.
• Get, in writing, how many linear footage of kitchen cabinets.
• Is the trim work paint flat, semi-gloss of high gloss?
• How many coats of stain and urethane on trim work?
• Is the contractor tearing out all burned timbers?
• Is the contractor getting paid for plaster by going back with drywall?
• Is the contractor spraying your attic white or brown?
• Make sure all draws are small and that you don’t give big draws (on a home/ business without a mortgage)
• Make sure that the contractor obtains the required permits and gets the required inspections.
• How many inches of insulation is being installed into the attic?• Make sure the contractor does not “short cut” your repairs.

Step #6 SUBMIT PAPERWORK TO MORTGAGE COMPANY

• Submit public adjuster’s contract to mortgage company.
• Submit public adjuster’s invoice to mortgage company.
• Submit insurance company adjuster’s report.
• Submit contractor’s contract.
• Agreement on draws with mortgage company.
• Agreement on inspections with mortgage company.
• Once 60% – 70% structure is completed, contact insurance company to get the replacement cost.

NOTE: MAKE SURE MORTGAGE COMPANY PUTS IN WRITING THAT IT IS OK FOR THE INSURED TO REPAIR THE HOUSE

NOTE: DOUBLE CHECK AND MAKE SURE YOUR MORTGAGE COMPANY HAS NOT SOLD YOUR LOAN TO ANOTHER MORTGAGE COMPANY

NOTE: GET THE PERSON’S NAME WHO WILL BE HANDLING THE INSURANCE CHECK AT THE MORTGAGE COMPANY

NOTE: SEND A NOTARIZED STATEMENT FROM INSURED TO MORTGAGE COMPANY ON WHERE TO SEND DRAW PAMENTS
Do not release the final monies to the contractor until you are 100% satisfied. NOTE: AGREE TO HOLD BACK A CERTAIN AMOUNT

• Make sure all utility bills, construction bills are paid.
• Make sure you have a waiver of lien from the contractor.
• Make sure you sign an affidavit stating you are satisfied.
• Make sure you have in writing all warranties from the contractor.

Step #7 OTHER SERVICES WE PROVIDE

Claim File Audit
If you already have an offer from your insurance company, we will audit the file to make sure you were properly compensated.

Conflict Resolution Services
If you cannot agree to a fair settlement with your insurance company, take the insurance company to the appraisal process.

C.P.R. CLAIMS
WE GET YOUR CLAIM SETTLED QUICKER … MORE ACCURATELY AND YES WE GET YOU MORE MONEY EVEN AFTER WE ARE PAID