Proof of Loss
A proof of loss is a formal sworn statement submitted by the insured to the insurance company after a covered loss, documenting the facts, circumstances, and amount of the claimed damage.
The proof of loss is a policy condition under ISO form CP 00 10 that requires the insured to submit a signed and sworn statement to the insurer within 60 days of the insurer's request. The document must include the time and cause of loss, the insured's interest in the property, the names of other parties with an interest in the property (such as lenders and loss payees), details of other insurance covering the same property, a description of changes in title or occupancy, specifications of the damaged property, and the amount of the loss.
For apartment building owners, preparing an accurate proof of loss can be a complex undertaking. A major fire or storm affecting multiple units requires detailed documentation of structural damage, contents loss, lost rental income, debris removal costs, and any additional living expenses paid to displaced tenants. The proof of loss amount should reflect the owner's best estimate of the total claim based on contractor bids, inventory records, rent rolls, and professional assessments. Submitting an inflated proof of loss constitutes fraud, while submitting an artificially low amount can limit the claim recovery.
Many apartment owners engage a public adjuster to prepare and negotiate the proof of loss on their behalf. A public adjuster is a licensed professional who represents the policyholder—not the insurer—in the claims process. Public adjusters typically charge 5% to 15% of the claim recovery. For large and complex apartment losses, the expertise and negotiating leverage of a public adjuster often results in a higher net recovery even after their fee, but owners should verify the adjuster's licensing, references, and fee structure before engaging one.