Restoration of Contents: What you Need to Know

Smoke coming out of apartment building

The damage after a fire or flood can pose serious health risks to you and your family. In the case of partial fires or flooding in your home, smoke damage and mold are often responsible for much of the damage done to your personal belongings. Smoke particles can spread long after the fire, while mold thrives on building materials, furniture, and clothing affected by flooding.

As part of your home insurance policy, the cost of replacing Personal Property / Contents lost to a fire or flood falls to the insurance company. They may be able to save a significant amount of money on your claim if they can successfully restore contents damaged by smoke or dampness. The insurer does have the right to attempt to restore your belongings to their pre-loss state, but there are a few things you should know about content restoration before they begin.

#1 Will Contents Cleaning and Restoration Work?

Before you attempt content restoration or agree to let the insurer attempt it, you may want to consult with a restoration professional to see if it’s likely to work. Smoke damage is persistent and difficult to remove. It may be impossible to remove smoke from upholstered furniture or other fabric belongings.

When there is a fire in your home, its fuel is building materials, furniture, and other belongings. Different materials have different hazards. For example, smoke from wood will be very different than the smoke created from burning plastics, paint, or cleaning chemicals. When these particles get into fabric, they can be very difficult to get out and hazardous to breathe in.

It becomes harder to repair smoke damage over time, and the work should be entrusted to a smoke restoration professional. Attempting to clean upholstered furniture yourself may wind up smearing soot deeper into the fabric and making it harder to clean.

There are also two types of smoke damage: soot and smoke odour. Even if the soot is removed, your belongings can still wind up smelling of smoke. Fabric must be deodorized with ozone treatment, thermal fogging, or with a hydroxyl generator by a professional.

#2 You Can Ask for a Quote

Even if the insurance company handles the process, you (indirectly) pay for the restoration of contents. The cost of restoration is deducted from the Contents portion of your home insurance coverage. Your contents coverage is used to restore and replace items like clothing, furniture, electronics, art, jewelry, and other valuables and personal possessions damaged in your home.

The restoration process can be expensive and time-consuming. The most common form of restoration is dry cleaning. The high cleaning costs can mean that you lose out on money that you could have used to replace lost property. If the insurance coverage limit for the Contents portion of your claim is less than the replacement value of the contents you lost, paying for restoration means:

  • You have even less money with which to replace the rest of your belongings.
  • You have less choice about what you will be able to replace.

Alternatively, you can negotiate to cash out the restoration portion of the claim. For example, if you receive a dry-cleaning quote for $15,000, you can negotiate to receive that money as part of your settlement instead, meaning you’ll have to pay for any dry cleaning you do want done out of pocket. Opting to cash out gives you the option of choosing what to restore and how you spend that money.

Just keep in mind that if you’re cashing out a settlement that includes a quote to restore something like antique furniture, for example, you cannot then claim the replacement value of that same furniture with the remainder of your claim.

Get a quote for personal contents restoration

#3 Health Risks of Smoke Damage

Even if a fire does not directly damage furniture or clothing, there are considerable health risks associated with smoke particles that can get into furniture and fabrics. Even a small house fire such as one restricted to your kitchen can result in extensive damage to the personal property throughout your home.

Smoke particles that linger in furniture, clothes, or your HVAC system can lead to irritation in your lungs or even scarring. Inhaling soot can cause sinus issues, lung problems, and other respiratory issues down the road. Soot residue can also cause skin issues, irritating and potentially damaging skin. Smoke-damaged clothes and linens can cause irritation and drying even after washing. Eye irritation is another concern, as smoke particles can result in red and watery eyes.

Even if the smoke damage is not visible, it can become a health risk. If your insurance company insists on restoration and dry cleaning, ensure that your belongings are adequately restored. Living with smoke damage is dangerous to your health, and you should not live with belongings that have not been successfully restored.

#4 Do Not Pay for Failed Restoration

Restoration may not be successful, and your items can come back damaged. If your insurer moved forward with the attempted cleaning and the items are returned damaged or still contaminated, you might not have to pay for restoration. Given the health risks listed above, it is not safe to continue to use fabrics that smell like smoke or still contain soot.

If the size of your claim is going to approach your policy limits, the cost of the failed restoration should not be applied. This would mean you have even fewer funds available for replacing lost belongings and more items to replace since they weren’t properly cleaned. If the insurer made the decision to restore contents, and the attempt failed, it should be a cost they have to cover and not one that is held against you. You purchased the policy so that you would have adequate compensation to replace personal belongings damaged by smoke, water, and mold.

Have Your Say When Your Coverage Funds Are Spent

When you’re in the process of a home insurance claim that involves your personal contents, make sure you have all the information you need. Ask for quotes before any work is completed, and critically evaluate the items that are returned to you. You should know how your insurance funds are being spent and have your say to ensure that you get the full value of the policy you took out.

Virani Law advocates for you by communicating with your insurance company and the insurance adjuster. We keep our clients informed about their rights and entitlements in dealing with the insurance company, as well as their responsibilities and obligations. Communication is key during the home insurance claim process.

Woman replacing lost personal contents

Contents Restoration vs. Replacing Contents: What’s the Difference?

Contents restoration is where you attempt to have your damaged belongings cleaned and returned to you. When you replace damaged contents, you do your best to buy the same or similar belongings, and then the insurance company reimburses you based on the details of your policy. A third option is to accept a cash payout, usually for a reduced amount, and use the funds to purchase new belongings at your own discretion.

The insurer may be motivated to pursue content restoration because it will be cheaper for them than replacing all of your personal contents. However, some homeowners want to pursue content restoration themselves because they have highly sentimental belongings, and they want the originals rather than the replacements. Examples might include family heirlooms, furniture inherited from family, wedding apparel, or their children’s beloved stuffed animals and toys. You should be cautious before pursuing contents restoration yourself. If it’s your preference, the costs of a failed smoke restoration attempt can be deducted from your personal contents coverage.

Replacing personal contents is often the easiest way to go about your house fire recovery within your policy limits.

How Replacing Your Personal Contents Works

If you choose not to attempt content restoration, or when it comes to belongings that cannot be restored, your personal contents insurance should help you replace them. Depending on your coverage, it may cover the full cost (minus the deductible) or help offset the costs.

The process begins with your Schedule of Loss. Your Schedule of Loss is a document that lists all of your lost belongings. Your Schedule of Loss will either be created by you or the Insurer. You may want to supplement your Schedule of Loss with proof of ownership, such as receipts or photographs of the belongings in your home. This document substantiates the value of your lost belongings and gives the insurance adjuster a baseline for evaluating your claim.

The insurance adjuster will then review your Schedule of Loss and determine how much the insurance company should pay based on your coverage. There are several things that may happen at this stage.

The first is that the adjuster may pressure you to sign a final Proof of Loss. A Proof of Loss document lists all of the damages sustained after a loss and the amounts required to compensate for those damages. Considering how many belongings are involved, you want as much time as possible to ensure your Schedule of Loss, and subsequently your Proof of Loss, are complete. If you remember something after signing a final Proof of Loss, you will not be able to add it to the list, and the insurer will not have to replace it, even if you have evidence that it was lost in the fire. Don’t feel pressured to sign a final Proof of Loss; you should still be able to access advanced funds without one.

The next is that you should request a cash advance. You should be able to request a cash advance even with an interim Proof of Loss. The cash advance can help you begin to replace your belongings before you receive your full insurance settlement. With a cash advance, you can avoid putting purchases on your credit card and going into debt. It will also give you more certainty and the ability to start budgeting your recovery.

You may also have a disagreement with the insurance adjuster about the value of your belongings. You should have an opportunity to review the Schedule of Loss. You can push back if you feel like your belongings have been inaccurately assessed.

Pay out for personal contents insurance

How Much Money Will Personal Contents Insurance Pay?

The amount of money you receive will depend on what kind of insurance you took out and how much you have lost. There are two key insurance terms you will want to look for when you review your insurance policy: Actual Cash Value and Replacement Cost.

If your policy provides Actual Cash Value coverage, it will pay for the depreciated value of your belongings at the time of loss. For example, if you owned a $1,000 computer for three years and it was lost in a fire, you might only receive $500 from your insurance policy. Actual Cash Value coverage will leave you at a loss because the depreciated value of your belongings will be lower than new versions of the same belonging. You will likely have to dip into savings or credit to replace everything.

If your policy provides Replacement Cost coverage, your policy should pay for the full cost of replacing your personal contents. However, you still have to purchase the same or a similar belonging. For example, if your television was five years old, you would still have to buy the same model, but the policy pays for the full cost. If the policy includes Guaranteed Replacement Cost, it will pay the full amount even if those costs are above your policy limits – though they may still have a cap (i.e., 125% or 200% of your coverage limit).

Replacement Cost should put you back into the same or similar financial position that you were in before the loss. Actual Cash Value will cost you more than what your policy provides to get back to where you were. Unfortunately, most people do not replace most items, leaving them at a loss but Virani Law advocates for alternative solutions to help families obtain more funds in hand.

More Information About Personal Property Coverage

Personal Property / Contents coverage helps your family put the pieces back together after a fire. The coverage allows your family to replace their clothing, furniture, entertainment, and other valuables without having to pay out of pocket or go into debt. For more information about replacement costs, you can check out our resources centre or give us a call. There, you can find information about Actual Cash Value coverage vs. Guaranteed Replacement Cost coverage, tips for creating a Schedule of Loss and submitting it to the insurance adjuster, and how to resolve disputes with the insurance adjuster about your belongings.

If you are having a dispute with the insurance company over Personal Property coverage or they are attempting an expensive restoration of contents that you do not want or need, you may want help with your claim. You have rights as the policyholder, and you may want to request a cash settlement to replace your belongings rather than pay the cost of restoration. Work with a home insurance lawyer if you have questions about home insurance. Get in touch with us today.