What is a Proof of Loss?

A proof of loss is a formal document that is prepared by an insured party and forwarded to the insurer in the event of some type of loss. This statement normally provides detailed information about the type of damage that occurred, which covered items are included in the loss, the stated value of the property involved, and the total amount of the claim. In many situations, it serves as the formal declaration of the property losses involved with the claim, as well as providing evidence of the loss. The exact structure of the document will vary, based on the requirements set by the insurance provider and any local governmental regulations that apply.

The use of a proof of loss is common with many types of insurance claims. One of the best examples is a claim that is filed on a homeowner’s policy after some type of natural disaster has completely or partially destroyed the home. In this instance, the homeowner would work with his or her agent to describe the nature and other details of the disaster, the date that the disaster took place, and the current market value of the property. Assuming that the furnishings and other belongings in the home were also covered by the policy, they would be addressed individually on the statement and assigned a value based on the assessment of the homeowner.

Once the document is submitted to the insurance provider, the details are evaluated, and the provider either allows or disallows each line item. Once the provider is satisfied as to the veracity of the claim and approves the final payment amount, the insured party is offered payment. If the party considers the amount of the payment to be equitable, he or she accepts it and the claim is considered complete.

In order to properly complete a proof of loss form, it is a good idea for individuals to maintain records that make it possible to access the data needed to support the statements made on the form. This can include using some type of data storage device to keep electronic copies of digital photos of property, as well as electronic documents that attest to the value of each piece of property covered under the terms of the insurance policy. Using a device like a CD recorder, and storing copies at home as well as in a bank box or another easily accessible site can make filing a claim much easier in the event of an emergency.