Property Loss Adjusting
Coverage first, math second
Identify the policy period, the named insured, the property, and the cause of loss. Decide whether the peril is covered, whether an exclusion applies, and whether an exception to that exclusion restores coverage. 'Direct physical loss' generally requires actual damage; odor, stigma, or fear of future harm usually will not qualify.
Building the estimate
Measure and scope before pricing. Separate labor, materials, and overhead and profit; apply depreciation consistently and distinguish recoverable from non-recoverable depreciation. Percentage hurricane deductibles apply to the Coverage A limit, not to the loss: a $600,000 dwelling with a 5% deductible carries $30,000 of self-insurance, so a $120,000 covered loss pays $90,000 before any other adjustment.
Special property topics
Additional living expense runs during the reasonable time to repair; business income runs for the period of restoration plus any extended period. Ordinance-or-law coverage addresses code upgrades. Matching of undamaged siding or roofing depends on the form and the facts. In Hawaii, be alert to flood and tsunami, lava-zone disclosures and exclusions, mold limitations, and condominium master-policy versus HO-6 allocation.
Traps
- Paying recoverable depreciation before repairs are complete.
- Forgetting the mortgagee clause when issuing payment.
- Overlooking salvage and subrogation potential.
- Applying a flat deductible where a percentage deductible governs.
Rule of thumb
Estimate in the unit the policy pays in - replacement cost first, then subtract depreciation only on the items the form actually depreciates.