Pitfalls for the Unwary Policyholder - The Overwhelming Proof of Loss

Proof Of Loss – What Is It?

After all the cleanup, now comes the paperwork. Altogether, it can be pretty overwhelming. Your insurer will require you to provide a “proof of loss” before paying your claim. Don’t worry – the Gorilla will help you through this process.

A proof of loss is a document signed by you which lists all the important information regarding your claim. Essentially it is a formal statement of the claim, usually sworn before a notary which provides the insurer with specific information pertaining your claim. It often includes:

· The amount of loss claimed;

· The documents which support the amount of loss claimed;

· The parties claiming the loss under the policy;

· The date and cause of the loss; and

· The people who have an interest in the claim.

You must timely send your insurer the proof of loss at the request of the loss adjustor or risk the possibility that the insurer may attempt to deny the claim. But not to worry, you can easily amend the proof as you learn more about your loss and the nature and extent of your damages.

The form which will be sent to you will contain legal mumbo jumbo that gives the insurance company rights that it does not have under the policy. You are not required to agree to such language as follows:

The said loss did not originate by any act, design or procurement on the part of your insured, or this affiant: nothing has been done by or with the privity or consent of your insured or this affiant, to violate the conditions of the policy, or render it void; no articles are mentioned herein or in annexed schedules but such as were destroyed or damaged at the time of said loss; no property saved has in any manner been concealed, and no attempt to deceive the said company, as to the extent of said loss, has in any manner been made. Any other information that may be required will be furnished and considered a part of this proof. The insured hereby covenants that no release has been or will be given to or settlement or compromise made with any third party who may be liable to damages to the insured and the insured in consideration of the payment made under this policy hereby subrogates the said Company to all rights and causes of action the said insured has against any person, persons, or corporations whomsoever for damage arising out of or incident to said loss or damage to said property and authorizes said Company to sue in the name of the Insured but at the cost of the Company any such third party, pledging full cooperation in such action. The furnishing of this blank or the preparation of proofs by a representative of the above insurance company is not a waiver of any of its rights. "Any person who knowingly and with intent to defraud any insurance company, or other person, files an application for insurance or statement of claim containing any materially false information or conceals for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties."

The insured hereby covenants that no release has been or will be given to or settlement or compromise made with any third party who may be liable to damages to the insured and the insured in consideration of the payment made under this policy hereby subrogates the said Company to all rights and causes of action the said insured has against any person, persons, or corporations whomsoever for damage arising out of or incident to said loss or damage to said property and authorizes said Company to sue in the name of the Insured but at the cost of the Company any such third party, pledging full cooperation in such action.

You are not required to agree to this boilerplate language and the Gorilla recommends that you do not sign away your rights. Instead, just be as helpful as you can regarding providing the insurer with information to support your claim such as the cause of loss, and the nature and extent of your damages known to you at the time you sign the proof.

And always write at the bottom under your signature the following: “This is a Preliminary Proof of Loss subject to modification and supplementation as the facts of the loss and damages become known.”

More to come on proofs of loss.