Seeking advice about household insurance claim

In My Humble Opinion (IMHO)
#1

My parents’ house was destroyed in the 2011 Joplin tornado. My brother is making a list of household contents for an insurance claim. It’s not going well, and I’ve offered to help. I’m in another city and cannot talk directly to the insurance company.

I’d appreciate any tips or caveats for making the list. Brother said he was told to list each item with the date of purchase and purchase price. That’s an impossible job. Parents had lived in the house for 40 years, and whatever records existed were destroyed.

A few specific questions are . . .

  1. How much detail is expected? Can we just list “books, $2000” with a comment (Dad was a university professor with a lot of hardback scholarly books, some collectible) ?

  2. Is it understood by the insurance company that many values will be estimated? E.g., “50 CDs @ $15 = $750”.

  3. Is it a red flag if values are estimated at rounded values such as $50, $500, etc.? Example: “table, $500” rather than “table, $496.85”.

So far, the insurance company has been wonderful, and I hope they assume we’re honest. We have no desire to commit fraud, but of course, we want to get a fair settlement.

#2

A reminder to everyone that people should have as detailed a household inventory as humanly possible. Do I take my own advice? Um, no.

But some thoughts on what I might do if trying to do this kind of thing:

  1. If there are any photos available of the household, use those. Obviously there’s a good chance they were all destroyed as well, but just in case… those could provide documentation of some items, and reminders of other things you might need to list.

Sketch out a layout of the house, and mark down furnishings etc. Do a mental walkthrough and describe everything you can, from memory.

Set up a spreadsheet and list everything you can think of (we did this when inventorying my mother’s house). Do things like “Den, Bookshelf by Window, History Books” then your best estimate of origin, quantities and value. Where you remember specific books (or whatever), provide additional details as sub-items.

A few iterations of this and chances are you’ll come up with a fairly decent inventory.

If their credit card bills and bank statements can be accessed online, go back as far as you can with those, and look for purchases to add to the inventory. At the least, it will jog your memory some.

The insurance company isn’t going to be a total ass about not having all the details, especially for commonplace items like tables and TVs.

Feel free to ask neighbors, relatives and other frequent visitors if they can add stuff / attest to its presence.

For rarer stuff (like the collectible books, or that original Rembrandt painting you had in the hall closet :D), they might be a bit stickier; also for some expensive items, the liability can be pretty limited unless you have riders on the policy. Dunno whether this would be a problem with the valuable books, but it’s a distinct possiblity.

#3

Either you or your brother should have this conversation with the adjuster handling this loss. Different insurance companies hold different philosophies in claim preparation and compiling inventories. Policy language can be sufficiently vague in asking for detailed and comprehensive inventories so different companies take different approaches.

The requirements an insured normally has after a loss applying to personal property are to prepare an inventory showing quantity, description, age, replacement cost and amount of loss (usually this is the depreciated value). The policy may have replacement cost coverage so check into this as well to determine how it works.

If the adjuster needs the original purchase price, simply list your best guess (unless you have this data) and add a disclaimer to page 1 of the inventory explaining that records are not available and purchase prices are estimated. The important number is today’s replacement cost because any applicable depreciation in based on this number and the insurance company usually calculates what they believe is appropriate depreciation. Depreciation is always negotiable.

On rounding off values vs specific values, either number can cause a red flag or allow a claim to proceed because claims are judged on an individual basis and this includes the lifestyle of the insured, type of dwelling, income/assets and quality of the property as judged by the adjuster after a loss. The adjuster is also evaluating the insured or perhaps your brother in this case, and trying to determine how fair they will be in listing the claim. As an example, some people come across as being greedy while others may tend to be more fair minded in the adjuster’s mind and this may determine how specific the adjuster wants the inventory listed and explained.

As I mentioned, before preparing the inventory, discuss the details with the adjuster to reach a meeting of the minds.

#4

I like to wander the house with a video camera, just recording everything everywhere. Make a few copies and store them in other places- relatives houses, safety deposit box, etc. If I had to remember everything…