By John “J.P.” McCormick, Summer Associate
Carluccio, Leone, Dimon, Doyle & Sacks, LLC
Our hearts go out to everyone affected by the massive fire in Seaside this past week. It is a testament to the strength of the people of the Jersey Shore that so many have already made it known that they will rebuild and recover again – despite having been working toward that same goal so shortly after Super Storm Sandy. Last week’s fire should prompt us all to think about a plan should disaster strike unexpectedly. And when disaster does strike, such as a fire, there are a number of things that you should do and be aware of in order to be best prepared.
1. Relocate to a Safe Place.
First and foremost, if your home or business is uninhabitable then relocate to a safe place. Most insurance policies reimburse such expenses at a later time. If you do relocate, make sure that you document all of your expenses, such as meals, hotel rooms, office spaces, additional mileage, etc. You need to keep accurate records so that you are properly and fully reimbursed.
2. Contact Your Insurance Company Immediately.
Contact your insurance company as soon as possible. If an Insurance Adjuster does not respond within twenty-four (24) hours then you should follow up to ensure prompt action. The Adjuster will make an appointment to examine the property/loss, and the Adjuster will likely be accompanied by a Building Contractor.
Your insurance company will make recommendations on individuals and/or services you should use to repair your property. However, you should not sign any contract unless you fully understand what it says and the purpose of it. It is also frequently the case that the Insurance Company is obliged to pay for the repair or replacement regardless of who you select to make the repairs. You should read your policy closely to fully understand what you are entitled to.
3. Expect an Investigation.
Your insurance company will most likely conduct an investigation. You must fully cooperate with the investigation, and answer every question truthfully. If you are not sure about a question, do not guess. You will likely be asked to submit a recorded statement either over the phone or in person. You may also need to provide various documents such as your tax returns or bank statements.
4. Take Time to Prepare an Inventory of What was Lost.
To prove what you lost, you will be asked to submit an inventory of the property that was damaged or destroyed. To recover everything that you lost, take the time to describe every item as meticulously as possible. If you can provide receipts, credit card statements, owner’s manuals, or anything to show price and ownership, it will be very helpful to the recovery process. Pre-loss and post-loss videos are extremely helpful, even if it is something like security footage or an advertisement showing your property.
5. Be Aware of the Tax Implications.
While New Jersey does allow some deductions from state taxes, such as for medical expenses, alimony, and property taxes, it does not allow all deductions from casualty losses (losses such as damage from fire). However, if the loss is incurred by a business, then the repairs may be capitalized and deducted. For more information on this deduction for federal deduction, see Internal Revenue Service form 4684, which details the loss and calculates the deduction.
6. Do Not Navigate the Process Alone.
Dealing with insurance companies and understanding tax implications can be daunting for many, particularly after a tragedy such as a fire. The attorneys at CLDDS understand these challenges and how overwhelming the process can be. As always, our very experienced attorneys are available if you need help through the process of recovery.
J.P. McCormick is in his third year at the University of New Hampshire School of Law, where he is an Executive Editor for the University of New Hampshire Law Review. Upon finishing his third year of law school, J.P. intends to practice in New Jersey, and is interested in all aspects of civil law. You can follow him on Twitter @JP_McCormick.