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No depreciation in home's insurance? Look again
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That's just not the case, says Bobby Ann Clark, spokeswoman for the Louisiana Department of Insurance.

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"We as consumers have it ingrained in us to not sign the check because we think it is a release of liability," she says. There are some situations you should be cautious, she adds, such as when you are filing a claim against someone else's policy, or if there is a waiver of liability printed on the check. But in a typical case, "Just because you endorse a check, if that is for coverage you purchased, it's usually not considered as a release of liability," she says.

Don't delay
Dragging your feet on filing your depreciation claim can be a big mistake. Many policies include a time limit on filing for the depreciated amount -- often 180 days after the date of the loss. Wait too long and the insurer may have grounds to deny your claim.

But Griffin says insurers usually will work with a policyholder who runs into a problem rather than denying the claim on a technicality.

After a major disaster, for example, insurers know that the huge amount of work needed creates special circumstances.

"Insurers know you may run into problems getting in-demand materials and skilled labor," Griffin says. "The key is to just work with your insurer and spell out your circumstances in writing and they should be more than happy to work with you."

Many insurers even issue blanket extensions in some of the most extreme cases where entire communities are affected.

And in the event a skilled work force just can't be found, the insurance company will even pay handy policyholders if they make the repairs themselves.

Howard says insurance companies owe you for what it costs to make the damage right, regardless of who makes the repairs, as long as done legally and up to code.

"They have to compensate you for your labor, and they usually come to that amount by offering the lesser of what you get paid at your regular job or what a licensed professional would charge for doing the same job," he says.

One thing to keep in mind when you are buying replacements or making repairs, Griffin says, is that insurance is meant to get you back to the same condition you were in before the loss -- not a better one.

That means that if you are hoping to stick your insurer with the entire cost of replacing your 24-inch television with a plasma HD-TV, keep dreaming.

But, on the other hand, if you do spring for the upgrade, you can pay the overrun and file the receipt with the insurer, and they will pay you the full replacement cost for your old tube's model.

It pays to plan
If this all seems like a lot to process in the wake of a disaster, Griffin suggests having a conversation with your insurance agent every year -- before anything goes wrong -- to ensure you understand what you are buying and what needs to happen in the event of a crisis. That's when you should discuss things like depreciation and what to do when you file a claim. It might also help ensure you don't get caught holding the bag if you have a grossly undervalued insurance policy, written decades ago for housing prices that cost fractions of what they do today.

Michael Giusti is a freelance writer based in New Orleans's corrections policy -- Posted: July 25, 2006
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