While this blog has frequently focused on damage claims involving residences under a homeowners policy, we have not devoted much attention to coverage issues involving personal property inside of homes. When a wind storm, burglary or fire damages a home, the destruction to personal property inside the residence can constitute a significant component of the loss. However, claims for personal property inside the home can pose unique issues and challenges. When you suffer hundreds of thousands of dollars in personal property that is stolen, damaged or destroyed, you must act cautiously when pursuing a claim for such items. Insurance companies frequently rely on a misrepresentation defense to avoid paying this type of claim.
A recent case from another jurisdiction provides an example of how insurance companies use misrepresentation allegations to avoid paying claims for personal property damages from a covered peril. In Masaitis v. Allstate, the home of the insured was severely damaged in a fire. While there was significant damage to the structure of their home, the insured filed a claim for nearly a million dollars in damage to personal property in the residence. The insurance carrier estimated the portion of the loss related to property damage to have a value of just over $300,000.
The arson investigator was unable to reach a definitive conclusion regarding the cause of the fire. Nonetheless, the insurance carrier claimed that the fire was suspicious and denied the claim. The insurer presented evidence that the insured removed family photos and certain other furnishings from the home prior to the fire. Evidence was also introduced indicating that the policyholders were deeply in debt and suffering extreme financial hardships. Much attention was focused on a particular item listed as part of the claim– two Rolex watches totaling $70,000 in value. The insured had no records to confirm where the watches were purchased or that the policyholder ever owned the watches. The significance of this fact was magnified because the policyholder provided two conflicting accounts of where the watches were purchased.
Although the court found that the insurer could not establish arson, the jury did believe the evidence proved insurance fraud. The consequences were especially harmful to the policyholder because the jury awarded the insurance company $807,000. This case demonstrates the challenge that often confronts policyholders when making claims for personal property. The documents that can prove the existence and ownership of personal property, such as receipts, invoices, order forms, certificates of title, bills of sale and related forms are typically located in the same areas as the personal property that is destroyed by the peril.
This simple reality makes it imperative that you use video or photos to inventory personal property. Evidence of this nature along with copies of receipts and other documents should be stored in a safety deposit box or other location so that it cannot be damaged by the peril that constitutes the basis of the claim. If you do not have any evidence to prove ownership of personal property, you might want to carefully weigh whether to include the items as part of the claim. If the items have significant value, you should at least get legal advice prior to filing your claim.
If you have questions about Florida property damage claims, including issues involving personal property, my law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.