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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.