At the 2012 National Fire Protection Association Conference and Expo, Judith R. Dicine, Practitioner In Residence at the Henry C. Lee College of Criminal Justice and Forensic Science at the University of New Haven described the difference between a hoarder and a collector as a “hoarder has so much stuff that the rooms they're putting it into have lost their functionality completely.”

Hoarding creates a number of health and safety issues for the occupants and raises coverage issues for insurers. There are trip and fall hazards, fire hazards, the presence of rodents and reptiles, as well as an inability to identify any leaks or structural issues with a property since so much of the area is hidden and inaccessible.

Since there isn't access to toilets and showers, it's hard to know where occupants have been bathing and going to the bathroom. One mold inspector described a condo where neighbors had been complaining about the stench from a unit. When he went in, the inspector found that the resident had been using the bathtub as his toilet.

“There are a few challenges when insuring a hoarder,” explains Anna Bryant of State Farm Insurance. “First, it is rare that we identify a person is a hoarder when reviewing a new policy application. There is typically no interior home survey, so we would only know of a hoarding situation if it's visible from the outside of the house.”

“Hoarders are usually identified at the time of a loss when we are brought in to handle a claim on the property,” says Paul Jackson, an independent insurance adjuster with Professional Claims Service in Allentown, Pa. “If we are at a loss at the request of an insurance company and find a hoarding issue, we let the company know so their underwriting department can be advised of a possible change in risk.”

Cory Chalmers, a featured expert on A&E's “Hoarders” television show and an expert in hoarding and biohazards says that homes of hoarders are more likely to “have losses created by fire, floods and mold. The lack of maintenance in hoarders' homes is the main culprit, but is compounded by the use of space heaters, portable cooking devices and other temporary fixes to malfunctioning home appliances.” He says that the typical hoarder is frequently “too ashamed and afraid to call a repairman to fix broken items in the home, so they ultimately grow into major problems.”

“Once the property is insured, the claim process for a large accumulation of damaged contents can be challenging,” continues Bryant. “Typically speaking, hoarders do not want to have their property discarded, even in cases of severe damage. The valuation of damaged property requires all of the items to be inventoried and restored, when possible. Often, large amounts of contents need to be removed from the property to complete the repairs.”

For restoration contractors, hoarding claims can be very tricky. From an environmental standpoint, there can be a wide variety of biohazards such as animal waste, human waste, mold and trash. “It's very hard to breathe in these types of homes,” says Michael Pelonero, director of Enservio's service on-site team. “There is poor air quality for the workers as well as the homeowners after a fire or flood.”

Hoarders frequently have items on top of items without any type of organization. The objects may not even be useable, but they have value to the owner. Finding space to pack the items can be difficult too. (Photos courtesy of BELFOR Property Restoration)

He says it's also a dangerous environment because contents are frequently stacked from floor to ceiling and the challenge is navigating the loss site without putting themselves in danger. “Imagine walking through your house in the dark,” he says. “Now imagine doing that in a home you don't know with floor to ceiling contents, in the dark and you don't know what you'll encounter.”

Pelonero described a situation where a technician found a water moccasins' nest in a home under tons of contents. “You find things you're not expecting like dead animals, wild animals, birds, squirrels, raccoons. You may even find something alive.”

In addition, the homeowner is frequently hovering in the background, nervous that someone will touch or remove their valued possessions. “Most hoarders are very protective of their belongings and they claim they know where everything is,” explains Glenn Allison, a contents sales estimator with BELFOR Property Restoration. “Sometimes it's an extremely emotional and grieving process to see them 'part' with their belongings, even if it's just to be cleaned.” When an owner is unwilling to relinquish control of their possessions it also hinders the company's ability to work.

Chalmers advises keeping the customer comfortable and building her trust because that will make it easier to work with her. “The same is true for gaining access to the area where the covered loss exists. If we just want to throw all of the contents away to reach the covered loss, we will traumatize our client and they will fire us on the spot. It is imperative that we work alongside the client to sort the clutter into categories they are comfortable with. Keeping the client in control or at least feeling like they are is a necessary evil, but one that will pay off for you and your team.”

Costs for a hoarding claim can escalate quickly if controls aren't put into place and some decisions aren't made at the outset. Sometimes the insurer is aware that it is a hoarding claim and can give the restoration firm notice that the claim will take several days. For the restorer, the challenge is to work with the insurer and the customer so the best outcome is achieved for all involved.

Pelonero says they have to approach the loss almost like a psychologist. They have to establish their boundaries up front so they can make sure not to cross them. He says the insurer doesn't want them to count trash, but the customer sees things like buttons and clothespins as valuable, so the challenge is figuring out what does or does not have real value. “We have to make that decision a thousand times every day. Do you keep a used TV dinner box or an old calendar? We have to explain what's valuable to the homeowner and why. We also don't have to inventory everything just because a homeowner thinks it has value, but frequently they don't understand that.” He says he has seen hoarders give up their insurance checks just because they wanted to keep their belongings after a loss.

Allison agrees that starting the inventory can be the biggest challenge. “We need a space to move items in order to inventory and sometimes it's a struggle to find that clear space just to get an accurate inventory.”

Determining new versus existing damage also presents a challenge for insurers and restoration contractors. “There can be a lot of underlying damage to a hoarder's home,” says Chalmers. “If a covered loss is reported, it is most likely due to outside agencies finding out and becoming involved. There could be existing water damage, and even fire damage in a home that is not related to the incident. This will become an important factor if it can be determined that the prior loss was outside of that coverage policy's limits.”

The policy limits will also affect what is repaired or replaced after a loss. “Generally, the decision to repair or replace an item depends on the type and amount of damage sustained and whether or not the item can be repaired/cleaned or needs to be replaced,” explains Bryant. “The standard for determining repair versus replace is no different than that of non-hoarding claims. This process may include the use of experts to determine if the property can be restored or needs replacement.”

“Some carriers in their policy have limited coverage such as no replacement value or actual cash value on articles that are outdated or obsolete and stored and not being used,” says Toby Bell, an independent adjuster and the principal of Professional Claims Service, Inc. Articles not maintained in good or working condition may also be excluded from replacement.

The challenges with hoarding claims don't stop once the items have been inventoried, moved, restored or cleaned, and returned to the homeowner. “Frequently there is no way to put the inventory back into the home in some type of organized fashion,” says Lori Young, president of Bartwood Construction in California. “Usually the items do not appear to 'fit' back into the home and the insured cannot find anything once it has been moved.” This can cause the insured to think that items are “missing.”

Allison agrees that returning the contents can be difficult because the items weren't returned to the same location they were in before the loss. He says hoarders are often disappointed with how their belongings are returned to pre-loss condition because they don't remember what the items looked like. “Many times the items appear with new 'scratches' and we have to show photo documentation to prove that they were there before and it can be a time-consuming and tedious process.”

When working with hoarders, the National Fire Protection Association offers these recommendations:

• Be respectful and show concern for the person's safety.

• Match the language to the person. If the person calls items her collections or things, use similar terminology. Avoid referring to items as junk, trash or hoarding.

• Try to focus on the safety issues such as fires, fall hazards and avalanche conditions.

• Show empathy and let them know you understand your presence may be upsetting, but that some kind of change is necessary.