Pre-Loss Condition | Understanding What Common Insurance Terms Mean
Water Damage

Pre-Loss Condition: Understanding What Pre-Loss Condition Means and Other Common Insurance Terms

Pre-loss condition is a common phrase used by insurance adjusters, but it applies regardless of whether you file a claim for restoration services. Quite simply, it means returning your home or business to its condition prior to when the damage occurs. Whether you have water damage, smoke damage, or mold, it means you or a restoration company has returned your property to normal. In addition to pre-loss condition, we define some common but confusing insurance terms.

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Understanding What Pre-Loss Condition Means

Again, pre-loss condition is a phrase often used by insurance companies when dealing with claims. Although your insurance company will cover the cost of restoration and repairs, they won’t allow you to take advantage of the situation.

For example, consider composite cabinets and a laminate countertop are damaged as a result of a burst water pipe. Your insurance company will cover the cost of restoring your kitchen to its pre-loss condition with comparable materials and quality.

In this case, the replacement materials will be composite cabinets and a laminate countertop. This prevents customers from abusing their insurance for expensive upgrades like hardwood cabinets and granite countertops.

Depending on the circumstances, your insurance may allow you to make renovations during the restoration process. Typically, they will pay for the cost of replacing damaged items with comparable materials. You then need to cover the difference.

Understanding What Comparable Materials and Quality Mean

Comparable materials and quality is another common insurance phrase. Basically, it means that the replacement materials will be similar to the damaged materials. They will also have a similar level of quality.

For example, if you have 1/4 inch drywall in your property they will cover the cost of replacing damaged sections with new sheets of 1/4 inch drywall.

Insurance companies often make this distinction because identical materials are not always available. This also helps moderate the cost of restoration, ensuring that you aren’t replacing a laminate tile floor with imported marble.

If you are paying for restoration yourself, comparable materials may still be a factor to consider since you’ll need to budget for the entire rebuild. While you may choose some upgrades, staying consistent with the materials in your property ensures they match esthetically.

Understanding Steering and Why Insurance Companies Cannot Steer You

While you are unlikely to hear the term steering from your insurance company, it is relevant to these other phrases. Steering is when an insurance company strongly advises or requires you to use a specific restoration company to repair your damage.

In most cases, steering is illegal. Many states have their own requirements what constitutes steering. Although your insurance company can provide you a list of approved restoration companies, you are always free to choose any restoration company to repair the damage.

You are certainly welcome to call one of their approved restoration companies, however, they have a vested interest in providing the lowest estimate.  If you are filing an insurance claim for damage, you may consider getting an independent estimate before using one of your companies preferred vendors.

Types of Damage Covered By Insurance

Most insurance policies cover damage as a result of a sudden and accidental incident. This includes the majority of causes of water damage and fire damage. Your insurance will usually cover mold removal as well. However, your claim will likely be denied if the damage was caused because you failed to maintain your property correctly.

The most common exclusions in normal policies include groundwater flood, hurricanes, and earthquakes. You should review your insurance policy every year so you have a good understanding of your coverage. If you have questions or concerns, contact your agent for more details.

Restoration Services From a Company In Your Area

If you have damage and need restoration services, Restoration Local will connect you with a qualified, local restoration company. We’re the largest network of restoration contractors, with both independent companies and major chains and franchises like AdvantaCleanDKI Restoration, and Rainbow International in our directory.

Choose a restoration company near you now. In an emergency, call 1-888-443-3110 to speak with our on-call restoration company in your area. All of our on-call restoration companies offer 24-hour service, 30-minute response time, and a free, no-obligation estimate.

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