How to determine property damage?

If you are a holder of a home owner’s insurance policy, you should be eager to know how to determine property damage. After all, in case that anything should happen to your property that is insured by an insurance policy, you should be ready to react as soon as possible. However, you cannot be ready if you do not know what the procedure is like. What should you do, when and how to determine property damage? We are going to try and help you with this last bit of the process – determination of property damage. Why? It turns that a lot of people take property damage assessment for granted. Indeed, the process itself seems very straightforward. Nevertheless, it is not. It can actually be quite difficult to determine property damage. Therefore, this seems to be one of the questions that need clarifying as soon as possible. 

A hole in a glass window
Property damage is very common

According to your common sense, how do you determine property damage?

First of all, let’s clarify what is the most common mistake that people make when they want to determine property damage. People assume that the price of a new item that needs replacing is the value that is used to determine property damage. While this sounds quite normal to the very last bit and your common sense would agree with it, we will, unfortunately, disappoint you.

As you probably know, there are certain facts in the world in which we live today that simply are not as simple as they should be. In accordance with this claim, we need to let you know the following: the value of a used product that had been insured and later on damaged up to a point that it needs repairing or replacement does not equal the price of that particular product in a brand new state. So, if you thought that all you needed to do was to go to the shop, buy a new product and have the money reimbursed, wait a moment and keep on reading.

How to determine property damage in real life?

In real life, there are two ways that you can use in order to determine property damage:

  • The amount needed to repair the damaged goods
  • The difference between pre-accident and post-accident values adjusted for the real market value

Determine property damage according to the price of the repairs needed to repair the goods

This one is simple enough. The amount that you are going to receive from insurance will be the price of the repairs needed to be undertaken in order to restore the damaged object back into to working order. And just like that, we are off to dissect the second option.

Determine property damage by assessing the costs of repairs
If your items can be repaired only the costs of repair will be covered sometimes

Difference between pre-accident and post-accident values adj… Wait, what?!

Exactly. This was our thought as well when we found ourselves in a situation like you are in at the moment.

This case seems to be more difficult to understand. The good news is that, in essence, it is not. Slightly more complicated to comprehend? Possibly. It is important to know that sometimes this type of damage can lead to bad faith insurance claims. Let’s take a closer look at it.

Pre-accident and post-accident values – how to calculate them?

So, in the case when your item has been damaged beyond repair, destroyed so to speak, you need to determine how much it would have been worth on the open market prior to suffering the damage. This is what the IRS calls the fair market value.

The fair market value is the amount that the informed buyer would have paid for the item prior to its damage suffering. As you can imagine, the informed buyer would not have paid the price of a new item on the used-products market. This means that the insurance company will not reimburse you with enough money to buy a brand new product in the same price range. The amount of money that you would receive would be far lower than what the brand new product is worth. However, it should allow you to buy a used one without you having to add to that pile. This is not always the case.

Therefore, this is the main reason why you should look to get help from an experienced insurance adjuster. Insurance adjusters are your only friends in a situation such as this one. Therefore, you should make sure to hire a reliable one to help you.

Hole in a wall
Make sure to buy an insurance policy from a reputable insurance company

Other costs that insurance should cover

While you may not be reimbursed for the amount that would allow you to obtain a brand new item of the same purpose, there are other types of costs that the insurance company should cover. In the case that you used the damaged item for business purposes, property damage insurance claims should cover the potential future loss of profit caused by the loss of that item. Therefore, make sure to get the best possible insurance adjuster help. You have paid for your security and need to have the insurance company honor its part of the deal.


Insurance companies are for-profit companies that will go the extra mile in order to maximize their profits. This, obviously, means that their clients sometimes suffer. Depending on the state in which you live and work, the laws may differ. Before getting involved with an insurance company, you should get informed about the local legislation. Afterward, you should seek pieces of advice of an insurance claims adjuster. Only after having talked to the trained professional, should you get in touch with the insurance company.

While at it, bear in mind that you have the right for fair reimbursement. We would suggest hiring of a professional claims adjuster in order to be sure that you will receive what you are due. It is much better to be safe now than sorry later. After all, this is why you bought insurance in the first place.

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