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Q & A from the Community Gathering on February 20th with United Policyholders:

Do I really need to repurchase items that were destroyed?

For example, I had a blender I loved maybe once or twice a year, but now, when money is so tight, I would probably choose not to replace it since it was not and essential item.

A:  You do not need to replace items to be reimbursed. You will need to detail the item in your inventory to receive the actual cash value (ACV). Generally, in order to receive full replacement cost value (RCV) of a personal property item, you must go through the full process of including it on a lost or unsalvageable inventory list to be submitted with the relevant information such as condition, brand, etc. Once the insurer pays you the depreciated value (which is often much lower), you can either:

  1. accept that amount;
  2. argue to decrease the depreciation to get a higher actual cash value (ACV), or
  3. replace the item and provide the receipt to get the difference paid to you.

Example: Blender, Hamilton Beach, 3 yrs old, good condition. Replacement Cost Value documented today online from Bed Bath and Beyond is $100.00 plus tax and delivery. After 80% depreciation, you would only be paid $20.00. You can argue that it is like new condition and ask for only 20% depreciation, or you can buy the new one or a similar model and recover the $100 plus tax and delivery.

Please see more info on the United Policyholders website: Home Inventory and Contents Claim Tips – United Policyholders

Is my insurance company going to put pressure on me to decide this year if I want to rebuild or settle and buy an existing home somewhere?

When will push come to shove with this decision?

A:  Your insurer will not want to keep paying your Additional Living Expense (ALE) without evidence that you are doing your due diligence to find a replacement home or rebuild within the shortest time reasonably possible. Every policy can be different, but most have limits on paying of (ALE) of either up to 12 months or up to 24 months. Dollar time limits have been determined to be illegal in primary residential homeowners’ insurance in Colorado. Be sure to document and share the research and work that you are doing to determine your realistic options – basically that you are doing your best to move forward. Colorado law allows 365 days following the end of your (ALE) to recover depreciation. Policies also vary in how much time you may have to document your loss and to replace the dwelling portion of the claim.

Please see more info on the United Policyholders website: Buy or Rebuild? FAQs on replacing a dwelling after a total loss – United Policyholders

What if I get bids from builders, but then in a few months I find a house that I'd just like to buy to get my life settled without the hassle of rebuilding?

Does the insurance company have to know about this before I buy and how will it impact my settlement?

A:  It is always wise to work with your adjuster to get a detailed understanding of how you would need to document the purchase of an existing home to get the full benefits of the policy BEFORE you purchase that home. Many policies in Colorado still have limitations on recovery of “Code Upgrade and Extended Dwelling Coverages” when you do not rebuild on the original land. In addition, some insurers will want to deduct the “value of the land” if you buy an existing home. It is wise to fully understand and get guarantees in writing from your Insurer as to what claim dollars will be available to you in the various circumstances and when they would be paid to you.

Please see more info on the United Policyholders website: Buy or Rebuild? FAQs on replacing a dwelling after a total loss – United Policyholders

If one’s insurance company wants to give you your 100% of Personal Property with replacement of [an additional] 5%, would you recommend we take it now?

A:  We advise that the policyholder always get a full understanding of the maximum policy limits in each area of coverage, and then work with the insurer to achieve the full, fair recovery based upon the policy limits, language, and regulations. If the company is offering you 100% of the “personal property or contents” limits without inventory requirements, you may consider yourself one of the lucky souls. Just be sure it is, in fact, the full amount available to you. There is possibly an additional 5% for debris removal of that amount, which should be made available if needed for the debris removal as well.

Did the State of Colorado tell insurance companies to work with homeowners for longer to get rebuilt?

A:  Homeowners policies for primary dwellings in Colorado must carry a minimum of 12 months of Additional Living Expense (ALE) coverage, and they are required to offer you (at the time of sale and renewal) an endorsement that increases that coverage to 24 months of (ALE). Be sure to check both the “declarations pages” and the language inside of the policy to see what is included in your own policy in place at the time of the loss. The CO DOI has issued several bulletins and new regulations regarding how insurers are to handle these disaster claims. Some of this is a strong recommendation, some are actual regulations.

You can view the DOI Emergency Regulation here:
Emergency Regulation 22-E-01 Concerning Tolling Certain Time Limits of Policyholder Benefits

What if insurance is offering a ridiculously low price for the ACV on personal items?

A:  It is unfortunately all to common for insurers to send your inventory list out to a third party contractor to “price” the items. The information may be manipulated by that contractor and we often see changes in the brand, style, condition, etc. which are then used to “lowball” the estimate of the actual cash value of each item. There are many ways to deal with this problem. You may provide your own estimated, depreciated values on your spreadsheet back to them along with your own replacement cost value. Basically, you can push back. If you plan to replace everything, you can recover the full (RCV) with receipts. If you are not replacing everything, you may be able to build a full inventory and work on an agreed upon inventory value that allows you to recover policy limits just with (ACV) values, especially if you were underinsured. NEVER pad or exaggerate your inventory, but rather work with the purpose of building a full value inventory that will bring you far enough above the policy limit to recover all of your resources.

Additional resources can be found online here:

Watch a Past Webinar (video link): Navigating the Contents Portion of Your Claim