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4.FIRE INSURANCE CLAIMS GUIDE

Any insurance policy is a mere piece of paper till the time of a loss or claim. for a customer the actual meaning of the policy is to be able to take the claim at the time of loss. however every loss may not be payable under every policy . the claim Is payable provided it is assessable, existence of insurable interest, within policy period , occurring of insured perils and not an exclusion under the policy

ASSESSABLE LOSS
the loss should be physical and should be assessable in monetary terms for the claim to be payable. perceived losses are not payable under any policy . the onus of proof that the insured has incurred a loss lies entirely on the insured.

INITIAL STEPS
The first step with any potential claim under a policy of insurance is to notify the insurance
company of the claim. Normally people do this by contacting their broker, but in some
circumstances, an insurance company is set up to receive claims directly.
The adjuster’s role is to explain the claims process to you and to adjust your claim. It is important to keep in mind that the adjuster is hired by the insurance company and takes instructions from your insurance company. There are various components to your house insurance, and it is important to be familiar with the types of coverage and the limits which are applicable. Some of the types of coverage are
discussed below.

DEDUCTIONS
all claims under the standard fire and special perils insurance shall be subjected to various deductions as below. some deductions are defined and fixed while others may be general deductions and actual amount may vary from case to case.

THE BUILDING
In some circumstances, it can be difficult to determine the appropriate replacement value. The
replacement value will be based on the square footage of the home, the quality of the finishings,
quality of construction and other factors.
In the majority of cases where there is a total loss, the house be built exactly the same as the one that was destroyed. In a total loss, the insurance company will have to assess whether the foundation is salvageable or not, and will normally retain an engineer to do an assessment of the property.
Once the replacement value has been determined, you will then be in a position to hire a
contractor to rebuild your home, with the insurance company paying the lesser of the following
towards the cost of construction
1. the replacement value;
2. the insurance policy limits; or
3. the actual amount spent on construction.
Any costs in excess of the amount to which you are entitled under your policy are at your own
expense and would be between you and your contractor.

CONTENTS COVERAGE

The contents of your home are insured separate and apart from the building or structure. In
circumstances of a total loss, the contents are often the most difficult issue to deal with.
Every single item in your home for which you wish to make a claim must be listed on a form
called a Schedule of Loss. The best way to do this is to go through your home by memory, room
For instance, if the normal useful life of a particular item is 20 years and the item is 10 years old, you could expect to receive one-half of the cost of the
item.

ADDITIONAL LIVING EXPENSES

many insurance policies provide for additional living expenses up to 20% of the insured value of the
house. As with the contents, even though some insurance companies will provide a sizeable 3
advance for additional living expenses in circumstances of a total loss, there is no obligation on
them to do so – the only obligation is to repay you what you spend based on receipts submitted.
The additional living expense amount can be spent in any manner you wish, within reason, but
once spent, there is no more money. In other words, if a person wishes to spend a month in a
hotel and eat meals in restaurants, they would likely be entitled to reimbursement, but if their
home is a total loss, it would be wiser to budget based upon how long you may be out of your
home.

DEPRECIATION
the depreciation is defined as the reduction in the value of the insured property as compared to the new property on account of usage.
the depreciation is applied as per the principle of indemnity followed by the insurance. the principle of indemnity says that in case of loss the insured is to be indemnified. Accordingly if the insured has suffered loss to an asset which is 5 years old the insured is entitled to claim for the value of the 5 year sold asset only.
the rate of depreciation as considered in insurance claim is not defined under any book or law as on date and it is decided by the SLA at the time of assessing the loss.

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