Disaster Uncluttering: Rebuilding

Today we welcome back Unclutterer programmer, Gary DuVall. In the first and second posts in this series, he discussed how to prepare yourself and your home in case of a disaster and what to do if it unfortunately happens. He is writing for us based on his personal experience of losing everything he owned in a fire on June 27, 2008.

After having spent the prior three weeks trying to process what had happened, it was nice for life to slow down a bit. My wife and I found a temporary sublet north of the city to live in for a couple of months, and we tried to regain some sense of a “normal” life. While it wasn’t the most comfortable situation -— nothing in our furnished sublet belonged to us and we were 15 miles from our neighborhood -— it was still a place we could call home.

The next step in the process was to build an inventory of what we lost. Between the photographs my wife Stephanie had taken and many hours of trying to remember what we owned, we constructed an inventory we felt good about and sent it off to the insurance adjuster.

Now would be a good time to point out a vital distinction in your policy when it comes to how much money you’ll receive for the items you’ve lost: Actual Cash Value (ACV) vs. Replacement Cost (RCV). Under ACV, your items are subject to depreciation and as such you’ll only receive enough money to replace the item at that depreciated price. Under RCV, you receive the full amount necessary to purchase an item of like quality without a depreciation in value. While your first check under a policy that contains a RCV rider is likely to cover actual cash value only, it’ll be up to you to repurchase the items you’ve lost and send in the receipts to recoup the difference. (Learn more.) Needless to say, we were both thankful we purchased a RCV rider.

The hardest part after submitting the initial inventory was waiting for that first check. Come September, when we finally moved into a new apartment, we still hadn’t seen anything but excuses from both the insurance and claims adjusters. In the meantime, my wife and I ended up having to sacrifice the savings and credit we’d built up in order to buy the essentials. In our case, it ended up taking over three months -— October 2008 -— to obtain the completed appraisal document and our ACV check.

Considerations:

  1. Compile your inventory before a disaster occurs and keep it updated quarterly. Had we done this before the fire, it wouldn’t have been necessary to spend 40+ hours compiling an inventory. While a video inventory provides you with visual evidence of the items you own, a spreadsheet containing the purchase price, date of purchase, and the store where purchased (along with receipts when possible) will serve as hard evidence. Ask your insurance provider for a copy of their inventory spreadsheet; in most cases, they’ll be more than happy to oblige.
  2. Consider a Replacement Cost Value (RCV) rider. While it may come at a premium, it’s worth it. The difference in what you receive may be thousands of dollars. Some providers (such as USAA) now default to this type of coverage in order to ensure policyholders aren’t left at a disadvantage with very little money to rebuild.
  3. A tip from the many insurance adjusters I spoke to while roaming the building after the fire: When calculating the replacement cost of an item for your inventory, use the MSRP. Relying on a sales price is likely to result in you receiving a check far below the value of what’s necessary to rebuild.
  4. Think about your options. In our case, we found “starting from zero” to be a liberating experience of sorts; we could chart exactly how we wanted to rebuild without, ironically, the process of having to sell or get rid of existing furniture and items. Once the initial shock of having lost everything fades, you’re left with what we considered to be a once-in-a-lifetime opportunity.
  5. If you’re financially able, don’t wait for that first check to arrive before making purchases. You may be left waiting months and, in the end, could end up moving into a completely empty home. It’ll be up to you and your family to take action and prepare your new home with furnishing and essentials whether you have a check in hand or not. If you’ve purchased a RCV rider, organize your receipts, match them to your inventory, and have them ready to submit as quickly as possible after the first check arrives.
  6. Take charge, and don’t be afraid to press for action when every side seems to have an excuse and you’re caught in the middle. Many people end up waiting considerably longer than three months for results because they don’t want to rock the boat.
  7. Your initial inventory isn’t the end-all-be-all when it comes to making your claims. Should you discover additional items that were lost, you can make subsequent claims. In our case, we ended up making three separate claims: The initial inventory and two more addendum inventories.

In the final part of the series, I’ll discuss how the experience has affected us in the long-term.

13 Comments for “Disaster Uncluttering: Rebuilding”

  1. posted by Natalie on

    We have a friend who lost her home and contents to a fire about a month ago. She was so glad to have RCV! She already got her check, so I need to find out what insurance company she is with, since this obviously is not the norm!

  2. posted by Sheena on

    Though its under sad circumstances, I love this series. Its helpful, insightful, and encouraging. I wish there was a way I could help!

  3. posted by Java Monster on

    But what if you *don’t* have receipts for many items? Should you look the item up on the internet to find the manufacturer’s retail price?

  4. posted by Gary DuVall on

    Java Monster:

    Yes, that’s precisely what we had to do for many items. We had absolutely no receipts for our items after the fire. All you can do at that point is to look up the MSRP (or whatever logical and defensible price you can find) on each and every one and drop it into the spreadsheet.

  5. posted by Gary DuVall on

    Furthermore, as we’d purchased a lot of our higher-ticket items within the three months prior to the fire, we were able to both remember many of the prices and also track the prices at a given time thanks to the Internet.

  6. posted by Re on

    Gary,
    Thank you for taking time to share you experiences to help all of us. I am currious, were approached by “public adjusters” to assist you in your claim?
    Thanks.

  7. posted by Gary DuVall on

    Re:

    Strangely enough, we weren’t. We had the option of going with a public adjuster had we wanted to search one out, but in the end we went with the adjusters our insurance company has had a working relationship with in the past.

  8. posted by Malcolm on

    Thanks for that Gary. I am enjoying reading this post, we had a burglary about a year ago and that is a much smaller deal than a fire, but I now realise how VITAL a good inventory is. We also have friends here in Australia who have had losses in the big bushfires – I am going to send them the link to this site. Thanks.

  9. posted by CCherry on

    I have started doing an inventory, you don’t realize some of the things you have until you’re trying to remember them all. My insurance agent directed me to the Insurance Information Institute and their software program. I’m not sure how comfortable I am with my information being stored somewhere else, on the other hand when a tornado comes who knows what’s going to be left.
    http://www.knowyourstuff.org/iii/login.html

  10. posted by Taylor at Household Management 101 on

    Thanks for sharing this with us. I think you have provided some great tips. I especially appreciated reading between the difference between actual cash value and replacement cost. Most people don’t know about this, and it can be quite a rude awakening to realize you don’t have enough money from the insurance company to actually purchase everything again if you have an actual cash value policy.

  11. posted by Wendy Blackwell on

    When I finish my inventory, I’m going to email it to myself. That way I’ll have access to it from a remote location. Particularly useful as we travel a lot and something could happen in our absence.

  12. posted by Mrs.Mack on

    What does MSRP stand for?

  13. posted by Margaret on

    Manufacturer’s Suggested Retail Price

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