Claims Handling, Investigation, and Damage Evaluation
Claim handling and evaluation
Claims handling begins with notice, coverage verification, investigation, documentation, and evaluation. The adjuster must determine the date and cause of loss, the insured property, the policy period, limits, deductible, and exclusions. Investigation includes photographs, measurements, receipts, inventory, witness statements, expert reports, and preserving evidence. The insured has duties after loss: prompt notice, proof of loss, protection of property, and cooperation. Kentucky’s Unfair Claims Settlement Practices Act (KRS 304.12-230) prohibits misrepresenting policy provisions, failing to investigate reasonably, refusing to pay without a reasonable basis, and failing to attempt a good-faith settlement. Evaluation separates covered damage from betterment, depreciation, and non-covered causes. For replacement-cost claims, holdback and recoverable depreciation must be tracked.
Worked example
A pipe bursts in January; the insured reports in February after mold appears. The policy covers sudden water damage but excludes repeated leakage and mold (except limited remediation). The adjuster dates the loss, confirms the pipe failure was sudden, estimates tear-out and repair excluding mold at $30,000 replacement cost, applies $12,000 depreciation, a $2,000 deductible, and notes $3,000 mold remediation subject to a $5,000 sublimit. The ACV payment is $30,000 − $12,000 − $2,000 = $16,000; the mold sublimit may add up to $3,000 if covered. The adjuster cannot simply pay the contractor’s invoice without testing causation.
Traps
Do not confuse causation with coverage. Do not ignore the policy’s proof-of-loss condition. Do not treat recoverable depreciation as automatically payable. Do not let a reservation-of-rights letter become a denial.