VRP Insurance wants to discuss policyholders and their duties to preserve property

A property owner has a number of responsibilities when a loss occurs under an insurance policy. Besides being committed to reporting the loss and cooperating with the insurer in handling the claim, one also has the responsibility to minimize the loss. This obligation holds for both personal and commercial loss situations.

Most insurance policies contain advice to protect your property from any additional harm. Insurance companies expect their policyholders to make an effort to minimize loss under their policies.

For an example, Maria’s restaurant staff is in chaos as a fire has been discovered in a small storage area located behind the main kitchen. The restaurant has already closed, so Maria only has be concerned with making sure that her employees are ordered and cleared out of the restaurant and makes certain that everyone is safely accounted for. Following, she makes a call to the local Fire Department.  At this time, she stops anyone from attempting to extinguish the fire. Unfortunately as it turns out, the fire spreads into the kitchen, severely damaging the heart of her restaurant. After her insurer investigates the loss, her claim payment is reduced by $10,000. The lower payment is arranged because it was found that Maria had reduced the severity of the loss by not allowing her staff to make use of the available fire extinguishers and she made the emergency call as quickly as possible.

The policy usually notifies the policyholder that he or she is expected to take all the available measure to save or preserve their property in the case of a loss. If the policyholder fails to meet the policy’s obligation in the event of a given loss, it can result in partial or total denial of coverage.

Here’s another example. The Jefferson family goes outside to inspect around their home to check for any damage after a strong windstorm. They notice that a large limb from a tree on their property was blown onto their roof, creating a hole. Several hours later a rainstorm makes its way through their area and pours through the hole, damaging costly furniture stored in the attic as well as damage to bedroom ceiling and walls.

Scenario One – the initial damage from the windstorm occurred early on a Thursday morning with the storm occurring in the afternoon. The Jeffersons made the decision to go to work and school and to handle the situation after they return home.

Scenario Two – the initial damage occurred on a Sunday morning, around 3 a.m. with the storm occurring around 6 a.m. The Jeffersons were frantic and  made several calls but could not find anyone willing to come out to their home to deal with the open roof until the following day.

In either of the two scenarios, failure to preserve the property after the initial loss created additional damage. However, in the first scenario it would be only the case that the policyholder may suffer a consequence. In cases such as this, the loss circumstances have a significant bearing on how the insurer may respond and the policyholder’s actions are critical. A reasonable effort may make all the difference.

To gain further insight on properly preserving your property from possible loss, be sure to speak with an insurance professional.

If you have any questions about your existing policy, are inquiring information about a possible future policy or need further information, please call us at (631) 738-7300 or get a quick quote at www.vrpinsurance.com

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