Unless you strike a gusher in your backyard, finding oil from the Gulf oil spill on your property could lower its value. After all, you may not be able to sit on the beach or swim in the ocean. Perhaps your seasonal renters backed out this year. Even homes away from the water may suffer from air polluted by the spill.
You can file an oil-spill claim with BP for property damage, cleanup costs, or loss of rental income. If you’re not satisfied with the company’s response, you have other options, including a lawsuit. Here’s how to take action.
File a claim with BP
1. Begin the oil-spill claims process either by phone (800-440-0858) or online.
2. Complete the basic claim form. You’ll receive a claim number. Hang on to that.
3. Expect an adjustor to call in two to three days, says BP.
4. Submit backup documentation. Sometimes small claims can be resolved over the phone.
Claims for more than $5,000 are considered “large loss” claims and must be reviewed by special adjustors.
If you’re represented by a lawyer, the adjustor will deal only with your lawyer, unless the attorney fills out a form authorizing BP to communicate with you directly.
Document based on the type of claim you pursue
Some documentation you may be asked to provide:
- Clean-up: receipts for equipment you bought; pay records for workers you hired; detailed descriptions of what was done; dated photos to show work.
- Loss of rents and income: accounting records and tax forms to show past occupancy and changes in rental income; notices of cancellation of rentals; written statements that cancellations were the result of the oil spill.
- Real or personal property damage: proof of property ownership, such as a tax bill; receipts for repairs; before-and-after photographs of damage from the oil spill; appraisals or other proof of loss in value.
Be prepared for an uphill battle with loss-of-value claims
Proving loss in property value is difficult because few sales have occurred since the oil spill. That means that real estate appraisers don’t have much information to determine the spill’s effect on home values. Based on earlier oil spills, experts estimate that property values will fall by approximately 10%.
Filing this type of claim may also be harder now that Ken Feinberg, appointed by President Obama to oversee the BP claims fund, has publicly stated that property owners, especially those not directly on the water, probably won’t receive compensation solely because home values fall.
If all else fails, you can always sue
If your oil-spill claim hasn’t been settled in 90 days, you can contact the U.S. Coast Guard’s National Pollution Funds Center at 800-280-7118 and make a claim. Claims must be made in writing.
You can sue BP, even if you receive an interim claim settlement. (When the oil spill is resolved, BP will make final lump-sum payments on claims that will require you to give up your right to sue.)
Consortiums of attorneys throughout the Gulf are offering litigation services. Keep in mind that such lawsuits can take years and that the burden of proof is on you to show damages.
No help from homeowners insurance
By the way, most homeowners policies don’t cover damages from the oil spill, according to the Insurance Information Institute.