Preparing a Personal Property Estimate


One of the policyholder's duties after a loss is to prepare a personal property estimate of damage. As a Florida Public Adjuster, I find it surprising  that most homeowners believe the insurance company is obligated to prepare this document for them. For the sake of this discussion, I will base all examples and opinions on the HO 00 03 04 91 policy with a Personal Property Replacement Cost, HO 04 90 04 91 endorsement. If your policy or endorsement contains different language, my comments may not be entirely applicable. Should you have difficulty preparing  a Personal Property Estimate a public adjuster should be able to help.

Your Duty to Prepare a Personal Property Estimate

You are required to present a Personal Property insurance loss to your insurance company. While most policies do not insist that you utilize a certain form, they do demand that you provide specific information. Many policies state that you prepare an inventory of damaged personal property declaring four items: the quantity, description, actual cash value and amount of loss. Although you could hand-write this information and comply with the policy, I recommend that you present your claim in an orderly and understandable fashion, and this may mean using some type of Word or Excel Spreadsheet.

I have provided a one-page Contents Inventory form that my assist in the presentation of your claim. If you opt to use this form, it is very important that you confirm that the information contained on this form fully complies with all of your policy requirements. Remember, not all policies contain the same language, and some have more defined requirements than others. Should you wish to use a public adjuster to present your personal property loss to your insurance company, it is usually best to present the the description, age, condittion, and replacement cost of the items you are claiming on a Personal Property Worksheet.

How to get started

First, you should state the quantity of the damaged items. This at first seems pretty self explanatory. If you have 1 damaged dresser, you should state a 1 in the on the appropriate line under Quantity, column B. Easy, right? However, when it comes to a large amount of similar types of items, some policyholders become lax. For example, all the spices in the kitchen are destroyed. Some homeowners will state in that line- 1 - Cooking Spices - $50.00 = Amount of Loss $50.00. While the insurance company might pay you the $50.00 for your spices, you have not fully complied with the policy. I prefer to state each item separately i.e. pepper, cumin, garlic power, garlic salt, garlic pepper, minced garlic. I recommend you, the policyholder, go to the spice isle in the supermarket; this will help remind the insured what items were destroyed and establish a proper replacement cost value. What you may also discover is that the cost to replace all the spices you had far exceeds $50.00.

Secondly, you should describe the damaged property. Do not just say a shirt, if the brand name of the shirt is Van Heusen. Say something like Van Heusen long sleeve white shirt. Don't just say dresser, if the item was a solid signature wood dresser with 12 drawers. Be as specific as possible, within reason. Don't describe your damaged items as coming from Macy's if you normally shop at Walmart. Be specific and factual. Remember, if you use credit cards, it is not hard to verify where you normally shop.

Thirdly, you need to state the Actual Cash Value.   Most insurance companies define Actual Cash Value as Replacement Cost less depreciation. So, what is depreciation? Some companies define this term as the amount of value an item loses over time due to age, normal wear and tear, or obsolescence. For example, you buy a couch for $2000.00 and delivery is $50.00 = $2,050.00. The chart states life expectancy for upholstered furniture is 10 years. After 4 years, it is destroyed in a fire. That same couch may now cost you $2150.00 and delivery charge may now be $100.00. What are you owed? If you were to depreciate by age, this is how it would work. You used up 40% of the expected life of the item, so you have 60% of the value of the item left, or $2,150.00*60%= $1290.00 + $100.00 for a total payout of $1390.00 on this item. Did you notice I said if you were to depreciate it by age? Depreciating by age is the common a common method to determine Actual Cash Value, but it is not always the fairest way. A normal family might need to replace a couch every 10 years, but a middle age single person might never need to replace the couch again in their life time. A high-quality upholstered couch will hold up better and last longer than a low-budget couch from a discount store. A couch in a formal living room will last longer than a couch in a family room in front of a TV. Damaged items can also be depreciated according to their condition. This method is generally fairer but leaves much more room to speculation and conjecture. Many times the condition of the property will vary from person to person.

Fourthly, you should state the Amount of Loss. For the sake of this discussion, I am going to define the Amount of Loss as what it will cost you to replace the item. Some insurance companies will also refer to this amount as Replacement Cost Value. What will it cost to buy the solid signature wood dresser with 15 drawers from Havertys? You might find a cost a retail cost of $1799.00, but what about delivery? Get the prices from where you normally shop. If you bought a shirt from Macys and the shirt is not longer available anywhere, then find the price of a shirt that is comparable from Macys. It may be wise to indicate on the supporting documents that this is a comparable match and not the exact item.

Additionally, you will need to provide documentation that will justify or substantiate the contents loss claimed on your personal property sheet. In other words, how did you come up with the cost for each of the items listed? I recommend you provide any receipts or invoices that you might have for the items you are claiming. You should also confirm if the replacement cost for that particular item has changed since your purchase. Go on-line and see what the retail cost is today and print out that information. If you replaced an item on your personal property worksheet with one of like-kind and quality, you should provide that receipt to the insurer. Justifying the cost you claim may be very time consuming, and you might want to consider hiring an experienced public adjuster to assist you with your claim. Should you wish to retain my services, I would be happy to assist. The first step you should due is to start preparing a personal property worksheet ( printable copy of personal property worksheet )

Gary Laird Ahrens • PA License # A002288 • Firm License # G008507 • AA Florida Public Adjusting Agency, LLC • 34540 Appaloosa Trl., Zephyrhills, FL 33541 • 866-993-3760

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