What You Need to Know About Your Proof of Loss Before Your Sign Off

Virani Law

As a homeowner making a fire insurance claim, it’s essential that you understand the language of your Proof of Loss forms before you sign off. The Proof of Loss document outlines the damages on your claim, whether they are Contents, Structure, or Additional Living Expenses. It includes a list of all damaged items, their Replacement Cost, Actual Cash Value, Total Loss or Damage, and the coverage you have for each item under your policy.

A Proof of Loss also addresses questions such as other interests on your property, such as your mortgage lender, which can be made co-payable on the Structure part of your settlement.

You can submit an interim Proof of Loss to get a cash advance and start to rebuild your home or replace your belongings, but eventually, you will have to sign off on a final version. When you do, you are swearing an oath that the document is complete and accurate. You are also waiving your right to make future claims for the same loss. You will have to carefully review your Proof of Loss forms, and you should know the difference between interim and final documents.

Interim vs Final Proof of Loss Documents

It’s common for structure and contents claims to involve interim Proof of Loss documents. They allow the insurance company to release funds to the homeowner before everything is finalized. The insurance claim process can take a long time, and homeowners benefit from getting part of the settlement in advance. However, it’s important that you understand the difference between interim and final documents so that you know what you’re signing.

When you’re starting the recovery process, receiving advanced funds to replace lost contents will be a significant help. The money the insurer advances can be used to replace clothing, computers, furniture, and other belongings that you will need long before the claims process is complete.

In the event of a total loss, the Insurer may send funds to start replacing essential belongings while they go over the rest of your claim. You can likely expect to receive more, but Insurers typically want to advanced funds right away to help homeowners get back on their feet. You will be in a hurry to replace lost belongings or attempt the restoration of contents damaged by smoke, and you don’t know how long the claims process is going to last. It could be as long as two years before you agree to a final settlement offer, and it’s a good idea to take your time and not rush to an agreement. In the meantime, you can use advanced funds to get back to normal life as much as possible.

The issue that arises from interim Proof of Loss forms is the language used in them. Sometimes the Insurer sends a final Proof of Loss form by accident. The language used in the final document waives your rights to any future claims for the same loss. In other words, you may be accidentally finalizing an incomplete claim.

Typically, homeowners are not held to that mistake, but it’s worth paying attention to the language used in these documents. The financial stakes are high, and you should take every step to ensure you have enough to rebuild your home and replace your belongings.

When to Sign Off on Your Proof of Loss

There is no rush to sign off on the final Proof of Loss unless it’s a final settlement offer. You should take the opportunity to review the Proof of Loss and make sure you haven’t forgotten anything, especially when it comes to lost belongings. If there are structural repairs related to home damage after a fire that you’re concerned about, make sure they are addressed before you sign. Also, if you intend on suing any third party, a final Proof of Loss may prohibit that.

Once you sign off on the final document, you can’t go back and include items that you forgot or revisit problems with your home six months down the road.

You should review the Insurer’s assessment, the list of repairs that need to be made, and the list of your belongings. Have family members double-check the list and make sure that there is nothing you have forgotten. It is also worth checking the Replacement Costs and Actual Cash Values listed for each item. You may want to compare the listed Replacement Cost against your own receipts or compare depreciation rates for items like furniture or electronics against what the Insurer has listed. This can be an intensive process, and reviewing your Proof of Loss is one area where Virani Law can help.

Be certain that your Proof of Loss is complete and accurate before waiving any rights of recoverability down the road. Wait until you are confident that every element of your claim has been settled and you are comfortable with closing your claim.

What Happens When the Adjuster Demands a Final Proof of Loss?

Homeowners often get confused when the insurance adjuster demands a final Proof of Loss when an interim form should suffice. You should only need to sign off on an interim Proof of Loss to receive advanced funds to help you start replacing your belongings. It would be short-sighted of an Insurer to force you to push through a final claim before releasing any funds to help you recover.

One of the most important ways Virani Law can help is dealing with your adjuster. When the adjuster makes a demand, it can feel like you have no other option. Either you sign the form or you delay the process and have to wait longer to receive much-needed funds. In many cases, there is more flexibility than the adjuster would have you believe.

Interim Proof of Loss forms give you flexibility throughout the insurance claims process. They help you access funds right away while also lending you the time you need to make sure your claim is complete and accurate. Once you sign your final Proof of Loss, you waive the right to pursue compensation for future claims related to the cause of loss. Always know what you’re signing and make sure you have time to confirm the accuracy of your final documents.