Every property insurance claim boils down to proof: what was damaged, why, and how much will it all cost?
The infamous “Proof of Loss” document is just the cover sheet for all that proof.
This comprehensive article will explain everything you need to know about the Proof of Loss and walk you through best practices to help your insurance claim get paid fully, fairly, and fast.
What Is A “Proof of Loss”?
A “Proof of Loss” – also called a “Sworn Statement in Proof of Loss” (or POL/SPOL for short) – is a one-page document that details the information about your insurance policy, property, and the losses suffered by you, the policyholder. It is a formal statement that describes your knowledge of the loss’s circumstances, the extent of damage, and the compensation the insurance company owes for repairs or replacement. It’s sometimes called a “Sworn Statement” because you are swearing to its accuracy.
With that stuffy definition out of the way, let’s go through some very basic insurance facts:
- You get insurance to protect your property against loss.
- If a loss occurs, you’ll submit a “claim” to the insurance company to pay your losses.
- Every insurance company and policy puts the burden on you to “prove” the extent and monetary cost of the loss.
“Proof of Loss” refers to this pesky and complex third item: the burden to “prove” your loss’s extent and monetary value.
It’s easy to feel confused when encountering the “Proof of Loss” term, especially if you encounter a “Proof of Loss” form. After all, this term does refer to a specific legal form, and this form does look confusing at first glance.
This is your Ultimate Guide to the Proof of Loss process and document. Use this guide to learn everything you need to know about this topic and to build the bulletproof “Proof of Loss” that gets paid fully, fairly, and fast.
A Friend or Foe For Policyholders?
The “Proof of Loss” document is a bit controversial.
A lot of attorneys blogging on the topic may scare the pants off you.
This Haffner Law post calls it a “trap” for policyholders. Another law firm says that “unfortunately, [the sworn proof of loss] is a tactic [by insurance companies],” with attorney Philip Warren going on about the “Sworn Proof of Loss (SPOL)” as follows:
[T]hink about [this] for a moment. This is a sworn commitment by you saying the cost to repair your property will not change, no matter what is discovered during the repair process or what additional projects or repairs may need to be undertaken that may cost more; you’re committed to this number. You may feel it is too early in the repair process to commit to a number just yet. Construction costs often fluctuate and change throughout a project as hidden problems are discovered or issues occur with supplies or labor. But, that is precisely why the insurance companies like to ask that you submit a SPOL. They want to force you to commit to a number early in the process because this works to their advantage.Your Insurance Company Says They Need A Sworn Proof of Loss: True or Tactic? by Phillip Warren.
I disagree with a lot of this paragraph, but I include it to demonstrate that it’s easy to get scared and confused by this form. This is the wrong reaction.
In fact, I go in a completely different direction: the Proof of Loss is your best friend; policyholders should leverage the Proof of Loss process on every claim, and you don’t need an attorney, adjuster, or other professional to use it.
First, claim backup is good. Policyholders massively benefit when they can assert and articulate their losses. After a loss, you should be racing to get as much documentation and information to the insurance company as possible to back up your claim.
Second, it puts the insurer on the clock. The Proof of Loss document and process is a well-defined step in the claim process that carries great consequences. Namely, it puts the insurance company on the clock to respond to and pay the claim.
Third, it’s easier than it looks. This is not rocket science, and it doesn’t have to be done perfectly. You don’t need it to be 100% complete. Put down what you know and leave the door open for more. That’s it.
Yes, the Proof of Loss document can be a pitfall for the unprepared.
But for the well-informed? It’s a strategic asset that can expedite a fair, full, and fast settlement.
When Must A Proof Of Loss Be Sent? And Responded To?
The Proof of Loss process has rigid timelines for both the policyholder and insurance company.
For policyholders, there may be rigid deadlines to create, sign, and deliver the POL. Insurance companies face strict deadlines to reply and approve or deny the POL.
Proof of Loss documents are hyper-regulated, with rules found across 3 complicated areas: the insurance policy, state law, and prior legal cases.
|The Insurance Policy
|Prior Legal Cases
THE WIGGLE ROOM
|Your insurance policy dictates when you must submit POL to the insurance company. Usually, 60 days after request.
|State laws dictate when insurance companies must approve or deny the proof and pay the claim. Usually, 30 days after receipt.
|Prior case law creates lots of gray areas and wiggle room in determining how strict or flexible courts will be about each of these deadlines.
60 Days – Sending the POL
The insurance policy is your contract with the insurance company. You must comply with its terms, and this is where you’ll find the core “Proof of Loss” requirement. Most property insurance policies have a “Duties After Loss” section, and within this, the requirement that you send “within X days after our request, your signed, sworn proof of loss…”
The POL is usually required within 60 days from the insurance company’s “request to you,” but there are versions of the provision that start counting from the date of the loss.
If you blow past the POL deadline, the consequences could be severe. The insurance company may argue that you “breached the insurance contract” and completely deny the claim. As we’ll see in the third area – on case law – there is a lot of wiggle room and gray area here, which mostly protects policyholders against such a harsh outcome.
30 Days – Approving the POL
Most states require insurance companies to move very swiftly after receiving a POL. Though each state is different, laws generally require insurers to approve, deny, or formally request a time extension within 30 days of receiving a POL.
The 30-day time period is not uniform.
Ohio, for example, has a shorter 21-day period. Ohio Admin. Code § 3991-1-54 requires that the “insurer must within 21 days of receipt decide whether [to] accept or deny” the claim.
Some states, like Nevada, don’t specify an exact time period. As per Nev. NRS 686A.310, the insurance company must affirm or deny coverage “within a reasonable time after proof of loss requirements have been completed.”
These time requirements are found within each state’s “unfair claims practices” or “bad faith” laws. If an insurer blows past this deadline, they may have to pay stiff penalties to the policyholder. As we’ll see in the next section on case law, however, there’s a good bit of wiggle room.
The Wiggle Room: Case Law Shows Devil Is In The Details
Lots of rules surround the POL, and the rules look pretty strict on a plain reading. This is why so many attorneys warn that the POL is a “trap” or a “tactic.” It is possible to trip over these rules and get the book thrown at you (this is possible for both the policyholder and the insurance company).
Generally speaking, the POL policy provisions are considered highly flexible by the courts, and POL penalty laws are strictly held against insurance companies. This is great news for the policyholders!
Courts very rarely allow insurance companies to stiff a policyholder because of some technical defect with the POL or its delivery time.
In Louisiana, for example, the courts have gone so far as to say that “satisfactory proof of loss is a flexible requirement, that does not need to be in a formal style and is satisfied by an insurer ‘receiving sufficient information to act on the claim,” explaining that “Louisiana has adopted liberal rules concerning the lack of formality relative to proof of loss.”
Policyholders get a lot of air cover in California, too. In Hanover Insurance Co. v. Carroll, the court explained that blowing a proof of loss timeline is “not fatal to recovery under the policy unless the insurer has been prejudiced” by the delay. This “prejudice” rule is found across many state courts, like Florida. And other jurisdictions, like in Wisconsin, simply require policyholders to “substantially perform” their obligations under the policy.
Think “Proof of Loss” Package…Not Form
“Proof of Loss” discussions too often jump right into form-filling instructions.
Here it is, the big, bad “Proof of Loss” document (view image).
It looks like you’d think.
Small font, lots of blanks, lots of columns, and formatting.
The form itself is not immaculate. It doesn’t have to look exactly this way. There are some stiff requirements and traps for the unwary, but overall, there is a lot of wiggle room.
The technical form, in other words, is pretty unimportant. Filling out the world’s most beautifully crafted form won’t help much, but completely documenting your losses without any forms whatsoever will do you a lot of favors.
Your real task is to show and attest to the scope and value of your loss.
So, forget about the “form;” you should be thinking about your “Proof of Loss Package.”
It’s Daunting – But You Don’t Need To Be Perfect!
I love this observation by Haffner Law in their Proof of Loss article that the requirement “can be a daunting burden [because] most policyholders are not expert[s] in evaluating property damages, or the cost to repair.”
United Policyholders points out something more problematic: it’s hard to get accurate and complete assessments even from professionals: “Many people…have a hard time getting accurate information about the true extent and cost of the damage to their properties. Early estimates can be incomplete and often wrong. Qualified, reputable, and affordable estimating help [is hard] to find.”
Keep in mind that everything is not on your shoulders.
First, the insurance company’s work will help you. In almost every state, the insurance company has a burden to investigate your claim in good faith. The insurance company will assign an adjuster and estimate your loss. This is good news. You don’t want to rely on this, but it will be helpful.
Second, you do not need to be perfect. When submitting documents or “proof of loss” forms, be sure to include qualifying statements, such as “this represents what is known as of this date” or “this is partial information.” You can also note that you aren’t an expert. I particularly like Haffner Law’s suggested qualifying text: the “insured is not an expert and relies on the insurance company to investigate and determine the extent and cost to repair loss.”
So, it’s important to do the POL well…but you don’t have to be Da Vinci.
Most state laws are liberal here, giving a green light whenever policyholders “substantially comply.” Furthermore, you can leave the door open to amend further as you get more information.
Start With What You Have and Early Costs
Sometimes, losses aren’t known all at once. For example, you may need to quickly perform emergency repairs, or you may quickly incur “Loss of Use” losses, all before you even have the chance to evaluate the full losses. It’s common for some losses to be “hidden.” And on and on.
Don’t sweat all of this stuff. When it comes to proving your losses in the early innings, perfect can definitely be the enemy of good.
Start with what you have. Here are some items you should be able to put together very quickly:
|EXAMPLE BACKUP MATERIALS
|You can make quick “emergency repairs” after a loss before the insurance claims process has time to pay out. Some common examples of this include tarping your roof so it doesn’t leak further, removing a dangerous tree before it falls, some site cleanup, and more.
|– Estimates from contractors
– Invoices from contractors
– Receipts for purchases
|Create a document that identifies each room and element of the property, and write a short narrative of the damages sustained. Include qualifying statements (i.e., this is a first impression, etc.).
|– Written narrative
– Property floorplans
– Voice Recordings
|Before & After Photos
|Find internal and external photos of the property before the damage. Take photos after the damages.
– Real Estate listings
|Comprehensive list of your damaged contents. It’s super helpful if you used something like HomeZada to manage your content pre-storm, but if you didn’t, download starter inventory lists and put this together as best as you can. See also: How to make a home inventory for insurance claims.
|– Spreadsheet of Contents
– Backup materials for value (receipts, affidavits, or online listings)
|Loss of Use
|If you’ve lost all or some of your property, prepare estimates and receipts of what the loss will cost you. Oftentimes, the loss of use will require you to rent storage containers, hotel rooms, and other apartments and look to other solutions.
|– Receipts for hotel, gas, storage, apartments, incidentals, etc.
– Estimates, quotes, and/or online listings for the same.
It’s completely fine to document the losses you know and then follow up with more later, including within a formal Proof of Loss document. Be clear with the insurance company by including cover letters or communication qualifying your submission and making sure your Proof of Loss document itself has qualifying language. Here are some examples:
- “I’m not an expert. I’m relying on the insurance company and professionals to investigate and determine the extent and cost of the loss.”
- “This information is based on my first impressions of the loss and the information I have so far about the cause, extent, scope, and cost of the loss, all of which may continue to evolve as I have more time to learn more completely about the loss, consult with more professionals, and expose more areas of the loss to view any possible hidden losses”
- “Estimates are only estimates and are subject to change due to many possible factors, including the availability of professionals, inflation, pricing changes, scope changes, hidden losses, market forces, acts of god, and more.”
Build Your Proof Castle: Cause, Scope, & Cost
Think next about how you’re going to build a “proof castle” for your claim.
The insurance company will assign adjusters and others to investigate your claim. These professionals will produce reports and estimates that are helpful. But remember, these professionals don’t work for you.
Policyholders need to build their own “Proof Castle” and formally transmit this information to the insurance company as quickly as possible. Here are the components of your “Proof Castle:”
|Example Back-Up Materials
|What caused your loss? This may not always be straightforward, especially if there are multiple causes at play (i.e., wind and flood), when mold is involved, or when losses are hidden.
|– Weather reports
– Engineering opinions
|Scope can be very tricky. How broad is the loss, and what will be required to repair the loss? Will a contractor need expenses to mobilize? Will this job require extensive debris removal and a construction trailer on-site? Does the entire roof need to be replaced or just repaired? What building codes apply?
|– Contractor Opinions
– Adjuster Opinions
– Engineer Opinions
– Contractor Estimates
|Tabulating the cost of losses is not easy. Materials can change costs very quickly, and it’s difficult to exactly match materials. Can the contractor include overhead and profit, and how much contingency costs?
|– Contractor Estimates
– Engineer & Adjuster opinions
The policyholder must assemble all of these items to tabulate the extent and cost of the loss.
This is the entire basis of the claim.
The Proof of Loss document itself is just a summary page of all these materials, with an attestation whereby the policyholder “swears to” it not being fraudulent.
This brings us to the “Proof of Loss” form itself.
Your Form or Theirs?
You’re ready to provide the Proof of Loss document. Now, where do you find the document? Which document do you use? And do you just sign any document that hte insurance company puts in front of you?
When The Insurance Company Hands You Their Form
You might be diving into the nitty-gritty of Proof of Loss forms because your insurance company just sent one your way. It’s a common practice—many insurance policies only require these forms when explicitly asked for by the insurer.
Picture this: Your insurance company is gearing up to offer a settlement. You receive an email containing a POL form, nudging you to “sign and secure the deal.” It’s tempting, but caution is key here. You don’t want to sign off on terms that could strip you of your rights later on.
When you’re presented with a POL form from your insurance company, you have two solid options:
1. Tweak Their Form: Take the provided form as a foundation but scrutinize every line. Make sure you insert qualifying statements to protect your position, as we discussed earlier.
2. Bring Your Own: Counter with your own POL form. Fill it out fully, and then send it back, asking the insurance company to point out any crucial differences they want corrected.
Remember, your goal is to provide a POL that “substantially complies” with the insurance company’s ask—legal precedents are generally on your side here. Just as we outlined earlier, peppering in qualifying statements can be a game-changer for maintaining your rights and flexibility.
Taking the Initiative: Submit Your Own POL Form First
My advice is simple—don’t wait for your insurance company to make the first move. Be proactive and submit a Proof of Loss form early in the claims process, and be prepared to update it as necessary.
When you bring your own POL form to the table, aim to achieve these three objectives:
- Cover The Essentials: Every POL form, no matter the origin, hinges on fundamental data about the policy, property, claim, and loss. Don’t leave any of these core aspects out.
- Qualify Your Submission: You are “swearing to” the information you’re submitting, but claim information is ever-evolving. Utilize the qualifying statements we’ve discussed before to ensure you have the leeway to update your claim as needed.
- Ask the Insurer For Any Changes They Want: The rule of thumb is to “substantially comply” with the insurer’s POL specifications. Therefore, turn the tables and ask them to flag any material discrepancies between your form and what they’d like to see. Be ready to revise based on their feedback.
Looking for a reliable POL form? Download Brelly’s general Proof of Loss form here. Created by legal experts in insurance claims, our form—along with state-specific variants—is designed to put you in a strong position from the get-go.
Examining Different Forms from Different Companies
At Brelly, we love looking at the Proof of Loss forms that insurance companies push on their policyholders. We’re opening a series of articles that examine the different company forms. Keep your eyes peeled for these articles. If you have a POL form from any of these companies, so send it to us at email@example.com.
- State Farm
- Allstate Corp
- Liberty Mutual
- USAA Insurance Group
- American Family Insurance Group
- Nationwide Mutual Group
- Farmers Insurance Group
- Travelers Companies Inc
- Amica Mutual Insurance
- Hartford Financial Services
- Louisiana Citizens
- Citizens Property Insurance
- The Hanover Insurance Group
- American International Group
- Erie Insurance
- Amica Mutual
- The Chubb Corporation
- Cincinnati Insurance
Filling Out The Proof of Loss: A Field-By-Field Guide
Staring at a blank POL form can be intimidating, but don’t fret. The information you need to include is quite straightforward. Before diving into the granular details, let’s map out the primary components of the form:
- Capture The Basics: The form revolves around four key pillars—You, the Property, the Policy, and the Claim. Make sure these are comprehensively covered.
- Establish Property Rights: It’s essential to confirm your legal standing in relation to the property. Are you the owner, renter, or another involved party?
- Quantify The Loss: Tabulate your estimation of the value of the losses and what your total claim is against the policy.
- Signature & Swearing: You’ll sign the document under language stating that you swear this information to be true and not fraudulent and have your signature notarized.
That’s pretty much it! The form is less daunting than it seems. The key is to be methodical: document your losses accurately and translate them onto this document.
Ready to dig deeper? Let’s examine the most frequent POL fields you’re likely to encounter in detail.
|PROOF OF LOSS FIELD
|This is the name of the insurance company that wrote your policy. For example, popular “insurers” include Allstate, State Farm, Farmers, Travelers, Chubb, Liberty Mutual, and others.
|The Policy Number for the policy subject to the claim.
|Policy Issue / Expiration Date
|This is often referred to as the “policy in-force period.” It just means the day the policy started and ended (it’s almost always a 1-year term, and you can find it on your declarations page).
|Your declaration page will identify how much is covered in each coverage category, and you provide that on the Proof of Loss form.
|Other / Total Insurance
|Identify other insurance that may cover any of your loss. Infrequently, properties have more than one insurance policy active at the same time. Here, you want to identify the total amount of insurance coverage on the property at the time of the loss. If you’re not sure about this, you probably have No/$0 additional insurance.
|The address of the property the policy is covering – is often called the “Risk Address.”
|Identify how the property is being used. – Commonly, for a homeowners policy, you would input primary residence or residential property; however, if it was a second home or investment property, you might call it an income property, rental property, or vacation home. You might call a commercial property a Church, office complex, or another commercial building type.
|Identify the owner(s) of the property. This is probably you!
|If you have a mortgage on the property, identify the mortgagee company(ies).
|This section allows you to explain changes that happened to your property or ownership since you got the insurance policy. So, in other words, has the ownership changed, occupancy, possession, or explores to losses changed in any way? Most of the time, your answer will be “none” here. However, if there have been any such changes, this is an opportunity to identify them.
|The number the insurance company assigned to your claim.
|Date of Loss
|The date when the loss occurred to the property.
|Time of Loss
|Estimated time of the loss to the property, if known. If unknown, just note that it is unknown.
|Cause of Loss
|Select the loss(es) that caused the damages to the property. Choices may include wind, hail, flood, fire, lightening, theft.
|Actual Cash Value
Estimate the value of the damaged property before the loss.
This is the known or estimated value of the property subject to the claim in its pre-loss condition. So, if you’re filing a claim for damages to the building, this is the pre-loss estimated value of the building. If you’re filing a claim for damages to the building and contents, this is the pre-loss estimated value of the building and the contents.
“Actual Cash Value” is generally defined as “The replacement cost of your home minus depreciation (i.e., for age and wear and tear).” The actual cash value for which the property could be sold is almost always less than what it would cost to replace it. See: Actual Cash Value v. Replacement Cost Value.
|This is the total amount of your losses. This is the total amount of damages you believe the insurance company owes to you. It’s a totalling of all the costs and estimates you’ve obtained for your emergency repairs, full repairs, and contents lost.
|Your insurance policy’s deductible. This may be a straightforward and specific dollar amount, or for some types of losses, it may be a percentage of your total coverage that needs calculation.
|Total amount claimed is the “Loss Amount” minus the “Deductible Amount.” This is the actual check you’re asking the insurance company to write.
Aside from these fields, the Proof of Loss contains some text blocks that are part of the form and, therefore, part of your sworn statement. While every POL document is slightly different, these text statements are typically a mixture of these:
- No Fraud Statement: You state that you did not do anything to cause the loss and that you are not claiming payment for any items that were not damaged. Basically, this is a “you are not committing fraud” statement.
- Subrogation Statement: Some POLs include a subrogation provision. Specifically, you are stating that you release your right to claims you may have against third parties that may be responsible for the loss and that the insurance company “steps into your shoes” and now has these rights. So, for example, if your neighbor’s tree fell into your house, your insurance company may pay you for the loss, but they may also “step into your shoes” and file suit against your neighbor’s insurance coverage for reimbursement.
- No Waiver: If the insurance company provides you with the POL form, they may include a disclaimer that they are “not waiving any of [their] rights by furnishing a blank copy” of the POL to you.
- Signature & Swearing Section: Finally, there is a section for the policyholder’s notarized signature. The signing and notarization means that your data and statements are all submitted to the insurance company “under oath.”
Best Practices for Submitting Your Proof of Loss
Navigating the labyrinth of claims communication can be daunting. Between constant emails, numerous phone calls, and a revolving door of adjusters, things can easily go awry. This chaos can make it challenging to establish claim timelines later on.
The key? Opt for formal communication methods.
Sending your Proof of Loss via certified mail gives you a reliable, indisputable paper trail.
For something as pivotal as your Proof of Loss, consider a multi-channel approach. Submit it electronically to ensure immediate receipt, but also follow up with a certified mail version. The mailed copy should include a cover letter confirming electronic delivery. This way, you not only formally submit the document but also corroborate the electronic submission.
Deadlines & Next Steps: What to Do After Submitting Your Proof of Loss
You’ve hit ‘Send’ on that Proof of Loss form. Well done, but don’t kick back just yet.
What follows is a critical phase. From managing deadlines to keeping the insurance company accountable, your actions during this period can either streamline the claim process or mire you in endless complications. Here’s how to keep the ball rolling in your court.
Mind The Deadlines & Followup If Missed
Submitting your Proof of Loss puts your insurance company on the clock. State laws require insurance companies to review POLs very quickly, oftentimes requiring approval or denial of the claim within just 30 days or less!
Consult Brelly’s State-By-State Insurance Claim Resources & FAQs to get your state’s deadline.
Calendar the date, and don’t let it slip by unnoticed.
If the insurance company drags its feet and blows its deadline, put it on notice immediately with a follow-up letter. And just like with the Proof of Loss submission, send this follow-up communication through formal channels, like certified mail, to keep your paper trail solid.
Supplement Your Proof
The claim process is often fluid, with new information emerging that could impact your claim. Don’t hesitate to send supplementary Proof of Loss forms and backup documentation as new data comes to light.
Escalate the Claim
If simple follow-ups aren’t producing results, consider ramping up the pressure. Engage an attorney or public adjuster to negotiate on your behalf. These professionals can be extensive, sometimes charging 10% – 40% of the total claim amount. However, if the situation warrants it, their involvement can really help you get your claim over the line.
Top DOs & DONTs For Handling The Proof of Loss
DON’T Falsify or Inflate: Misrepresenting facts or overstating your losses can spell disaster. While laws often favor policyholders, they also safeguard insurers against fraud. For example, in one California case, a policyholder’s “material misrepresentation” led to a contract breach, enabling the insurer to deny the entire claim. Be cautious with your statements.
DO File the Document: It’s a great idea to be proactive and submit the POL on your claim. However, it’s also a likely requirement. Failure to submit your POL can compromise your claim’s validity. Don’t procrastinate; get it done.
DON’T Blindly Sign: It might be tempting to quickly sign forms prepared by legal advisors or adjusters, but thorough review is vital. Missteps here could cost you down the line.
DO Include Qualifiers and Request Extensions: If you need more time to gather information or finalize details, don’t hesitate to request an extension and/or caveat your initial submission to keep the door open for amendments.
DON’T Forget Documentation: The insurer heavily relies on your documentation to assess loss severity and determine payout amounts. Regardless of your claim size, every document you include should support your case rigorously. Insufficient or incorrect documentation can give insurers a reason to deny your claim.