Dealing with A Fire Insurance Claim
A fire in residential or business premises can be devastating. Most freeholders/owners of premises have fire insurance, but some may have inadequate cover. Some may have no cover. Leaseholders may have fire insurance via their landlord, recovered through a service charge, at least for the buildings.
The process of making a claim following an incident can be quite daunting. Contacting your insurers is the first stage to advise them of the incident, so do have your insurance details in more than one place.
The insurer will most likely appoint a ‘loss-adjuster’ to progress the claim by assessing the damage and costs for remedial reinstatement within the terms of the policy. The policy wording is critical here.
Insurers are obliged only to compensate the insured person or persons, to reinstate them back to the same position they were in before the fire or incident. They are not going to fund any improvements, so you will have to fund those yourself. This is the concept of ‘betterment’.
The loss-adjuster is acting purely as an agent for the insurer. Their guidelines in the assessment will be the basis of the policy terms, and they will scrutinize those in detail. Essentially, they will advise the insurer what they think their liability is in terms of cost/fees, etc.
You may deal directly with the loss-adjuster in your claim, but you will be doing that at a time when there may be significant emotional upset due to the fire and loss, possibly also the need to find temporary alternative accommodation. For businesses, there will be the added impact of the event on the business, and clients/customers. For landlords, there could be loss of rent, and income.
Fire Damage and Impact
When dealing with fire damage, our surveyors will need to investigate the cause of the damage to understand fully how this may have affected your property.
Although loss adjusters and insurance experts have experience in the claims process, they may not have a high level of technical knowledge required.
Below is just some information our surveyors will need consider and actions which will need to be taken to deal with the repair and reinstatement of your property effectively.
- Most house fires result in the burning of many different types of materials, all of which do not burn cleanly, and release complex odours and residues – often toxic. The surveyor will need to understand what potential smoke residues have been released to determine what restoration and repair works may be required. In order to do this he or she will consider the following:
- Materials burned
- Amount of oxygen available
- Duration of the fire
- Temperatures the fire reached
- The method of extinguishment
The devastating effects of smoke and heat
- Some smoke residues are acidic in nature, and often cause corrosion to metal surfaces. Will the loss adjuster or insurance professional consider the restoration or replacement of mechanical plant, services, boilers and appliances, if at their visit, they visually appear damaged? Acidic corrosion will continue to occur after their initial visit.
A selection of images where smoke and heat-affected different materials and built-in equipment in kitchens and food preparation areas
- Although pipework may not appear to be fire damaged, thermal damage may have occurred if located in close proximity to the fire. Expansion and contraction of service pipework may lead to water, or worse, gas leaks after the property has been restored.
- They will also need to quickly identify and consider the urgent making safe of any health and safety issues or environmental issues, for example, unsafe structures, contaminated water, disturbed asbestos.
- Bathroom affected Ceiling lath and plaster damaged, exposing ceiling joists
A methodical approach is required in assessing the extent of damage
- Smoke odour is the most difficult problem to overcome. Odour in the air is easily remedied. Contaminated materials will not be eliminated until the source has been identified, restored and/or removed.
Roofspaces need to be thoroughly checked for damage and odours affecting the thermal insulation
Practical Issues for Consideration
The issues to consider, following a fire to premises, are:
- The initial contact with insurers and notification of the insured event
- The terms of the insurance policy and what it covers, and what it excludes. (This can affect contents of buildings also)
- Whether it is a home, or a business, or both residential and commercial affected, or some other category of premises.
- The scale of the fire and damage arising.
- Whether it is possible to use part of the premises or not, and the need for temporary accommodation.
- Have other adjoining premises being affected, or is it isolated to one property/dwelling/unit ?
- For landlords, whether the fire might result in loss of rent to premises which cannot be let.
- For businesses, the impact on clients, customers and those who were using the services at the time of the fire.
- Whether the insurance cover via the premiums paid was (a) Valid (b) Adequate (c) Whether premium payments were up to date
- Whether the insurer still existed at the time of the incident, whether they had assigned the insured’s business to others and other relevant facts.
- The scale and nature of the contents that have been damaged or destroyed, as a result of the fire.
- The negotiation with the insurer /loss adjuster, of the financial settlement arising from the loss.
- Costs for any temporary accommodation, purchase of clothing and basics.
- For businesses, they may have various supplier or service -contracts which they still have to fulfil. They may have to pay suppliers or subcontractors, at a time when revenue dries up due to the fire.
- Any affected children, older or disabled relatives, pets, animals and their specific needs, particularly in respect of any temporary accommodation
- A review of how well the evacuation worked if the building was occupied at the time of the fire.
- Were there any physical injuries as a result of the fire? Is longer-term health-monitoring required, due to smoke inhalation?
Scale of damage
The initial visit by the loss-adjusters will enable them to identify the scale and extent of the fire and damage. They will take measurements, photographs, and record information. It will be established if other adjoining premises are affected. The advice can be given for the insured person affected, to mitigate further damage, such as to bring in a contractor to put temporary weatherproofing over part of the structure.
Loss adjusters may ask for a report from the Fire Brigade on the cause of the fire, as this can assist with identifying whether arson was a consideration and a criminal act, or not. Small fires might not require a specialist report if the cause is obvious.
One of the greatest concerns can be the loss of documentation. A fire can destroy accounts, paper records, files, photographs, certificates, evidence of bank accounts and savings, and even money kept at the premises. These will need to be replaced over time, and a great deal of effort may be required to identify what has been destroyed and what has been saved.
The fire could have contaminated the property with asbestos dust or other hazardous materials. Before there can be any remedial works, this must be taken into account. Specialist contractors may need to be brought in to remove them or make them safe. Materials which might have been hidden during the building occupation now may be exposed, damaged, and potentially dangerous.
A qualified experienced chartered building surveyor, such as Arun Associates, has worked on numerous fire insurance claims with clients and negotiating on their behalf with loss adjusters. In complex cases, they may advise bringing in a loss-assessor, who also supports the affected, insured party. Arun Associates has contact with several loss-assessors.
The advantage of introducing a building surveyor into the equation is that they will have been trained to understand how fire can affect buildings, the existence of hazardous materials, a good knowledge of the building regulations and building services, and how best to tackle the reinstatement of the damaged property. Where required, they may well require a report from a structural engineer.
Arun Associates surveyors understand the principles of loss, of betterment, and need for funding of improvements following a fire event.
From arranging clearance demolition contractors to arranging specialist reports on damaged building services; to organizing a reinstatement of the damaged property following a smaller fire; to writing a report for the client’s funding institutions, and applying for licences for alterations, this is all part of the role of a chartered building surveyor.
Who pays the fees?
With professional fees, it is often the case that reasonable professional fees will be paid as part of the insurance claim, by the insurers. This is because few people have the degree of experience and expertise to negotiate with the loss-adjusters or insurers, in such difficult circumstances. Fees may be sometimes on a percentage basis of the value of the damage which is covered by the insurers.
Where additional improvements are carried out at the time of reinstatement, and the surveyors are asked to organize those too, they will be entitled to a fee on that part of the works. That portion of fees will not usually be paid for by the insurers, so the client would have to then pay that element of professional fees. (Only fees for the insured damage reinstatement are normally payable by insurers.)
The need for temporary accommodation might need to be factored in, and sometimes those costs may be recoverable in part, if the accommodation is necessary, as a direct consequence of the insured, fire event.
The process of reinstatement of the damaged property can sometimes be lengthy, and there will be various stages to go through, perhaps involving different professionals. Where adjoining properties are affected, there may need to be complex negotiations too, with neighbours and their insurers.
Settlement of claim
Arun Associates are used to negotiating a settlement of the financial claim on a client’s behalf with the insurer/loss adjuster. They will be pragmatic, professional and reasonable in their approach. A balance has to be struck between the amount the insurer is willing to pay, and what the client expects to be received as compensation for the insured event. That is not so much a compromise, as base on a professional view of all the circumstances, as each situation will be unique.
Terms and Conditions
Before they become officially involved in your project, chartered surveyors have to provide a clear contract as to what service, or services they have agreed to provide, the level of professional fees, and so on. Arun Associates are happy to answer your questions before committing yourself to engage them as professional advisers.
Programme for property reinstatement
The Surveyor may draft a programme for reinstatement, based on key information, and advise the client of a realistic timescale. As each fire event is unique, the length of time for reinstatement will vary from property to property.
Arun Associates’ involvement will depend on factors such as whether you require them to just negotiate a financial settlement or to go to the next phase, and carry out the contract administration and specification for the remedial works. If remedial works affect the party walls, then this becomes more involved, but Arun Associates have the knowledge and assistance to assist here as well. It is about providing professional support, to allow you to get back into your property as soon as practically possible.
Finally, we would be happy to discuss your needs at no obligation so feel free to contact us.