Claims Handling, Investigation, and Adjustment Practices
Claim lifecycle
A property claim moves through notice, acknowledgment, coverage verification, investigation, reserving, documentation, valuation, negotiation, payment, and subrogation. The first coverage question is whether the policy was in force and the claimed property and peril are covered. Then review exclusions, limits, deductible, and conditions. Investigation may include photographs, recorded statements, receipts, inventories, contractor estimates, expert reports, examination under oath, and appraisal when the policy provides it.
Valuation separates replacement cost from actual cash value. Depreciation, betterment, overhead and profit, sales tax, and recoverable depreciation should be supported by the estimate and policy. The adjuster documents why each item is included or excluded. North Carolina's unfair claim settlement practices statute prohibits misrepresentation, unreasonable delay, failure to investigate, and failure to attempt a prompt, fair settlement when liability is clear.
Worked example
A sudden water heater burst damages flooring and walls. The adjuster confirms the loss was accidental and not long-term seepage, which is typically excluded. The repair estimate is $18,000 replacement cost, depreciation is $3,000, and the deductible is $1,000. The initial payment is $18,000 - $3,000 - $1,000 = $14,000. The insured may recover the $3,000 depreciation after completion if replacement cost coverage applies.
Traps
Do not confuse matching with betterment. Overhead and profit is not automatically owed on every loss. Do not accept a release before the scope is complete. Preserve evidence and document every conversation. A denial based only on the insurer's first estimate is vulnerable to an unfair-practices complaint.