What is “Proof of Loss?”
Insurance policies are essentially an agreement between a policy holder and an insurance company that says the company will agree to financially back losses a policy holder sustains, provided they are included in the policy agreement and the policy holder complies with certain post-loss requirements. The first and arguably most important part of these post-loss requirements is filing a “proof of loss,” which can come in many different forms. Let’s take a closer look at this fundamental step for any insurance claim, learn what it means, and discuss some steps you can take to make sure you do it properly when you sustain a loss to your home.
What Is a Proof of Loss?
When a policy holder experiences a loss to an insured piece of property, they may file a claim on the loss in order to recover financial value. Initially filing the claim is only one of the necessary steps to trigger an investigation, however. You’ll also need to demonstrate the nature of the loss you suffered. Proof of loss is more detailed than initial notice of a claim, and includes a number of pieces of information that aren’t always included in the initial claim, such as:
- The amount or value of the loss
- Documentation supporting the amount of loss claimed
- Who is claiming the loss
- The date of the loss
- The cause of the loss
When your insurance company accepts your proof of loss, they are not guaranteeing that your claim is accepted. In fact, most of the time proof of loss is accepted as long as it’s filled out properly and submitted with the proper supporting documentation. The only common reasons why a proof of loss would be rejected is if you forget to sign it, you fail to provide adequate supporting documentation, or you don’t properly fill out the form.
Proof of Loss in a Property Damage Claim
Let’s look at an example. Say your home suffers serious damage when a car plows through your front door. You’ll want to report the incident and file your claim as soon as possible, but the investigation won’t fully begin until you submit your proof of loss. This means you’ll want to get the information of the driver who lost control, thoroughly photograph the scene of the accident, and make a list of your property that was damaged by the car (furniture, electronics, and more) plus their declared values. You will submit all of this information with your proof of loss to begin the investigation in earnest.
It’s in your best interest to be both prompt and honest with your proof of loss. While you may not be able to exactly valuate some of the property damage you sustain, incomplete proof or wildly inaccurate estimates could be seen as an attempt to defraud your insurance company and lead to a denied claim.