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North Dakota Insurance Department
Jon Godfread, Commissioner
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Frequently-asked questions

What is depreciation? 

Depreciation is a reduction of value at the time of loss. It can be applied based on age, wear and tear, condition, or useful life expectancy.
 
What is replacement Cost?
Cost to replace damaged property with like kind and quality materials.
 
What is actual cash value (ACV)? 
Actual Cash Value is the difference of the replacement cost of the property or building material, less depreciation.
 
If my policy coverage is based on replacement cost, why are funds being withheld from my claim settlement? 
This is a deferment of payment until the property is actually replaced. It is worth the actual cash value of the property at the time of loss. Replacement cost coverage is contingent on the damaged property being repaired.
 
How long do I have to complete the repair work in order to obtain my deferment? 
One year from the date the settlement check is received to complete the repairs.
 
Where do the unit costs in my estimate come from? 
The adjuster uses specialized estimating software to calculate the repair costs in the estimate. The unit cost used in the software is updated on a regular basis to reflect current material and labor costs.
 
Additional repairs are needed, but were not included on my estimate. What now?
If an estimate is presented to a contractor or repair person and there is additional work necessary, the adjuster should be contacted to discuss the additional repairs. The adjuster may also need to contact the contractor to discuss why the additional repairs are necessary or to verify them. 
 
The pricing or costs used to estimate my loss seem low. How should I proceed? 
If the costs in your estimate seem low, discuss this with the adjuster. If there is still no agreement regarding the cost of the repair, the next step is to obtain competitive bids from contractors in the area. We require at least two competitive bids for the repair(s) in question.
 
I have obtained bids and they are higher than what was estimated. What do I do now? 
Forward copies of the bids to the adjuster. He or she will review the bids and contact you to discuss any adjustments. If a settlement check has already been received, contact the State Fire and Tornado Fund at 701-328-9600. Go here for more information regarding authorization for additional repairs.
 
Do I need authorization or approval for additional repairs or repair costs?
Yes. Insureds must obtain prior approval for additional repairs and repair costs from the assigned adjuster or a representative of the State Fire and Tornado Fund before the repairs are initiated. If the State Fire and Tornado Fund or the adjuster is not contacted, or if you have the repair work done at the higher cost without prior authorization, the insured will be responsible for all additional repair costs.
 
I am having difficulty finding a qualified contractor to complete the repairs. What should I do?
Call the adjuster. They may be able to refer you to a reputable contractor in your area. You can also obtain contact information for repair contractors through local or regional building supply outlets and referrals from local schools, churches, businesses, fraternal organizations and clubs. If you’ve exhausted all available resources, contact the State Fire and Tornado Fund at 701-328-9600.     
  
I’m done with the repair work and want to obtain my deferment. What do I need to do?
To obtain the deferment, provide documentation showing the work was completed. Acceptable types of documentation include copies of billing invoices, certificates of completion, cancelled checks, project payment summaries and photos. To ensure repair documentation can be accepted, contact the State Fire & Tornado Fund at 701-328-9600 prior to sending.
 
Mail
North Dakota Insurance Department
State Fire and Tornado Fund
600 E. Boulevard Ave
Bismarck, ND 58505-0320
Fax
701-328-9610 Attn: Jon Nelson
E-mail
ndspecialfunds@nd.gov
 
I have a claim-related question that is not covered in this FAQ. Who should I contact?
Contact the adjuster first. If he or she cannot provide an answer, please call the State Fire and Tornado Fund.

North Dakota Insurance Department
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
Phone 701.328.2440
Toll free 800.247.0560
Fax 701.328.4880

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