Closing a Claim Meg Hamill asked 8 months ago
Closing a Claim

We have reached a satisfactory settlement from State Farm, after losing our home to an electrical fire in 2021. We are ready to close the claim. We are opting to purchase another home, and want to start the process of buying. We are currently renting. The lot where our old home stood has been sold. State Farm has paid us checks for a satisfactory amount and money is in the bank. While we don’t fully agree with their final settlement, we are indeed ready to settle. We want to make sure that we handle the closing of the claim in the appropriate way.

Will State Farm require proof of purchase of a new home – documentation and all of that? They certainly don’t seem to care about details as they’ve already handed over the money.

Are there pitfalls to be aware of at this phase in the process? Is there language to include/avoid?

When is the claim actually considered “closed”?

Thanks in advance!

1 Answers
Selina Clark Selina Clark Expert answered 8 months ago

We are very sorry to hear about your loss. From the details you provide, I am guessing SF is paying the ALE on your temporary rental. Through the claims process, your adjuster should have been having the conversations with you each month about rebuild vs relocation. If not, then you will want to let them know you have opted to relocate, and when you will be moving out of temp housing (the housing vendor probably contacts you more often about extensions needed).

You are not required to forward the proof of purchase of your new home. The only time that it may be to your benefit is if your policy limits were not reached, and the new home is Like/Kind/Quality, meaning comparable style/sq footage, etc. The adjusters are supposed to take into consideration the cost of the new home purchase, less land value, and then determine if there are additional monies that are due to you. The reduction of land value has always been a sticking point, and you may want to ask how SF deals with that now that it is not allowed in California.

If you don’t agree with the SF Estimate, and you believe there are missing items in your SF Estimate, you definitely want to bring that to their attention before allowing them to close your claim. If you have the Trade Summary (located toward the end of your SF Estimate), do yourself a favor and take an hour or so to review that. It breaks everything down by trade which is easier to understand than the 75 to 100+ pages of the actual estimate. There may be several items that are missing, or inconsistent. Look at the window category – confirm the correct window styles were included, grids and LowE if you had those options, and the correct quantity. Do the same with your interior doors and exterior doors. Also look for any inconsistencies. For example, kitchen cabinets – make sure if they were high grade, that all the cabinets were listed as high grade. Often, they will reflect some as high grade, and some as average. There is no consistency. If you find any items that you believe they missed, or items that reflect inconsistencies, list those either in an email or create a document and submit that to your claim for review.

Once everything is settled, and you provide them with notice that you will be moving out of temp housing, they will be more than happy to close your claim. Please remember, depending on your policy, your ALE coverage will provide for your moving expenses (assuming you have not reached your ALE policy limit if you have one). Talk to your adjuster and see what they will require for documentation. Your labor hours to pack and load what you may have accumulated at the temp home, along with your hours to unload/unpack at your new home will be reimbursable. Also, if you have any furniture delivered that requires assembly, be sure to include those hours. If you are hiring a moving company and relocating within the same geographical area (approx. 250 mile radius), then those expenses are reimbursable. However, if you are relocating out of state, you would need to have the moving company breakdown their billing to separate out the drive time/travel from the actual pack/load and unload/unpack hours. Carriers will not pay to relocate outside of the geographical area.

Please know that when a carrier closes the claim, it can always be reopened if needed. Any time you send an email or a document to your claim, it will pop back open, and the adjuster is required to review and address that document/email, note the claim, and contact you. If you are not contacted in about three days, call them.

Hope this helps, and we wish you the very best in your new home, and this next chapter.