When faced with a loss, it is sometimes difficult to know what the next step is and how to address the situation. An insured’s actions after an accident or loss can make all the difference in the outcome of a claim and what it takes to resolve it. To that end, insureds have certain duties and obligations under the policy. These duties are designed to ensure cooperation and efficiency to minimize the impact of the loss.Let’s walk through a scenario to help us visualize some situations:
Loss ScenarioGusty winds followed by heavy rains cause significant damage to the roof of a church. A great amount of water infiltrates portions of the building, damaging walls, ceiling, and floors. The water also causes damage to items in the church. The weather forecast indicates several more days of constant rain. The pastor is notified of the incident.
Approach #1Because the church has previously identified a contractor, the pastor immediately contacts them about the situation. To control and prevent further damage to the building, it is decided that the best plan of action is to lay a temporary tarp on the impacted roof. This prevents more rain from making its way into the building and ensures that the damage does not increase. In order to prevent mold from growing, they also call a water mitigation company to start drying out the walls and floor.
Due to the pastor’s efficient response to the unforeseen crisis, no additional damage was incurred and the church was able to recover from this loss much faster.
Approach #2After being notified, the pastor does not know whom to call and decides to wait until the storm passes before calling anyone to do an assessment or inspection. Due to this lack of action, accompanied by continued rain, the church sustains further roof damage and additional water damage throughout portions of the building. By letting the water sit stagnant for additional days, the church eventually finds itself dealing with mold issues, which is normally excluded from most policies. This creates a greater amount of damage for the insurance company and increases the likelihood that the church will have to pay more than their deductible to take care of the mold.
Lee Vining, an independent adjuster with Frontier Adjusters, emphasizes, “The first 24 to 72 hours after any loss are often the most critical time in the life of any claim. Communication is key; giving your insurance company a valid cell phone number and answering calls from unrecognized numbers are key to getting the claim handled and preventing voicemail tag.” Vining adds that responding to emails and other messages is vital, and it is always helpful to keep a file of all of this information.
Vining notes that most claims require some sort of repair or professional effort to address. Selecting and getting repair vendors working as soon as possible to address water claims, smoke losses, or even liability claims can be the difference between a small, quickly handled claim and a huge loss that requires major intervention, a loss that keeps a building inaccessible for weeks or months.
Vining stresses that claims and losses are not a matter of if they will happen but when they will happen. By addressing and managing risks and being prepared, you can make a huge difference in how large a claim may become in both time and cost of the disruption to your ministry.
Duties After a LossAs illustrated in the above scenario, after a loss occurs, the insured has a duty to exercise reasonable care to protect the damaged property from further harm. The insured's neglect of the duty to protect property from further damage may also impact the insured's right to coverage. This duty applies regardless of whether the threatened further damage is from an insured or an uninsured scenario.
In addition to protecting the property from further damage, the insured must:
- give prompt notice to the policyholder (union/conference) and/or insurance company
- notify the police in case of crime-related loss
- document and photograph the damaged property before any mitigation work is done
- prepare an inventory of damaged personal property showing the quantity, description, amount of loss, and replacement cost value, including all related documents that justify the figures in the inventory
- remove at-risk contents to a safe location, covering contents with plastic sheeting, or taking other reasonable measures
- cooperate with your insurance company in the investigation of a claim
Take Steps ImmediatelyWhere an insured is faced with the potential of further damage to property, the insured should act immediately. The insured should not wait for the insurance company’s representative to arrive before taking the needed action. As such, it might benefit both the conference or union and the local entity to develop a detailed plan to deal with possible loss scenarios. That way, the insured can begin taking steps without waiting for an adjuster to arrive on the scene.
To receive equitable compensation for your property damage claim, it is imperative that you mitigate further damage. Failing to meet this duty can result in reduced or denied coverage. Examples of damage mitigation include:
- shutting off water flowing to and escaping from burst pipes
- covering holes in windows and roofs after a storm to prevent water from entering
- professionally mitigating water to prevent mold, if needed
- drying metal fixtures to prevent rust
- removing fallen trees and branches from roofs or fences
Dealing with losses is an inevitable aspect of property ownership. However, by being aware of the necessary steps to take when such losses occur, you’ll be empowered to act to successfully protect the assets of the church. This is only feasible by educating yourself regarding the insured’s duties to achieve the best outcome possible considering the circumstances presented.
Image Credits: Claudio Divizia-stock.adobe.com