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Property Damage Insurance Claims Process: What To Expect

An incident that causes property damage can seem to come out of nowhere, fast—a fire, an unexpected storm, or overnight vandalism or theft. Yet dealing with the property damage insurance claims process can last for weeks or months. It isn’t something any business owner wants to deal with, but these types of claims are relatively common, so it’s important to know how they work and what you can do to make the process go smoothly.

What is a property damage insurance claim?

A property damage insurance claim is a request for compensation from your insurance provider after an event wrecks or harms your business’s property. When you file a claim, the provider begins a process of investigation and review to determine if your claim is covered and how much money you’re entitled to receive under your policy.

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Homeowners Vs. Commercial Property Damage Claims

Homeowners property insurance is a separate policy from your commercial insurance. It covers damage to your personal home and is often required by lenders. If you own both a home and a business, you’ll need both types of insurance for a few reasons.

As far as the process, personal property and commercial property claims are mostly handled in the same manner. Where the difference exists is in the scale of the problem, and coverage specifics that are tailored for each type of policy. For example, your commercial property insurance will be customized to cover your business property, which is often a larger space (such as a 100,000-square-foot warehouse, in comparison to a 1500-square-foot house). It will also cover both installed and uninstalled equipment, which is likely more expensive than the personal items in your home. Finally, commercial insurance may provide coverage for things that a homeowners policy would not, like loss of business income.

Property Damage Insurance Claims Process

Knowing what to expect and what to do when you have a property damage claim can help you prevent further damage, keep employees safe, and ensure you get the right amount of compensation. Here are the steps to take to ensure the claims process doesn’t hit any snags and hold up your insurance money:

Take immediate safety measures

Property damage insurance claims involve a variety of scenarios, some of which may cause damage that endangers the safety of your guests and employees, such as broken glass, exposed wires, or structural risks. The most important first step is to evaluate the situation and ensure everyone’s safety. You may need to turn off the main power if there's a risk of electrical fires or hazard, block off dangerous areas, or evacuate the entire building if necessary.

Document the damage

The next most important thing to do is document the damage. You’ll need detailed information so your insurance company can make an accurate assessment of your property damage claim:

  • Write down as much as you can about the time and place of the incident, who was involved, and what happened.
  • Take photos and videos of all damaged areas, equipment, and inventory from various angles.
  • List out specific items that were damaged or lost, their value, and any related details.
  • If another party was responsible for the damage, get their insurance information.

Make emergency repairs

In certain cases, like if there is a leak or broken windows, you’ll want to make emergency repairs to reduce the chances of further damage or theft. But not so fast: First, contact your insurance company for guidance, because some policies have rules about unauthorized repairs. Once they give you the go-ahead, you should:

  • Use tarps or plastic sheeting to cover openings or leaks to prevent water damage.
  • Board up broken windows or doors.
  • Relocate undamaged inventory or assets to a safer location if there's a risk of further damage.
  • Call in an emergency response contractor, such as water extraction services for flooding or emergency board-up services for fire damage.
  • Keep receipts of any materials or services you purchase for emergency repairs. These could be reimbursable under your insurance policy.

Notify your insurance company

Once you’ve taken care of any immediate danger, you’ll want to officially start the property damage insurance claim process as soon as possible. Some policies might have rules about how long you have to report a claim—you don’t want to miss that window and end up paying out of pocket for everything.

To file a claim, call your insurance company. They will likely ask you to provide the following: 

  • Written details about the nature and extent of the damage
  • List of the damaged items
  • Photos of the damaged items
  • Copy of your property lease
  • Copy of the police report or other investigative reports
  • Receipts and invoices related to the damage

Meet with the adjuster

Once you file your claim, your insurance company will assign your case to an adjuster, typically within a couple of days. The adjuster is the person responsible for inspecting the damage and determining whether it’s covered and how much compensation you will receive. Before you meet with them, you should:

  • Review your policy. Understand your deductibles, coverage limits, and any exclusions.
  • Get professional estimates for repairing damage or replacing equipment. This can help you tell if the adjuster's estimate is accurate.

Settle your claim

Once the adjuster completes their assessment, the insurance company will make an offer based on your coverage and deductibles. If you agree with the amount of compensation, you can accept the offer. If not, this phase can easily become the longest part of the property damage insurance claim process. You might need to negotiate or provide additional documentation, like the professional estimates you gathered or new photos and videos. If you still feel your claim isn't being handled fairly, you can seek advice from a lawyer or insurance professional.

Make the remaining repairs

After you accept an insurance settlement amount, you’ll go ahead with the rest of repairs. Be sure to keep all documentation related to the claim, including correspondence with the insurance company, photographs, receipts, and any other relevant information. This can be crucial for tax purposes or if there are any future disputes or claims.

Review your policy

If your provider won’t pay as much as you’d like, or denies coverage completely, the property damage insurance claim process can become a big hassle. Even if you received fair compensation and are happy with your policy, this is still a good opportunity to review your coverage. Make sure all future potential damage is covered and that you understand the terms and exclusions. Contact a specialist if you have unique circumstances, like property that is vulnerable to theft or particularly expensive.

The Bottom Line

Even if you haven’t had to file a claim yet, understanding the property damage insurance claim process can help you ensure you have the right coverage and know what to expect. And if you have experienced property damage, it’s especially important to know what to do – and what not to do – to get the best results under your policy.

LandesBlosch has decades of experience with property damage claims, and we pride ourselves on our excellent customer service. We can also help you find the right policy to make sure you’re covered. Contact us today to get started.

Austin Landes, CIC

About The Author: Austin Landes, CIC

Austin is an experienced Commercial Risk Advisor specializing in property & casualty risk management for religious institutions, real estate, construction, and manufacturing.

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