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How To Navigate The Home Insurance Claims Process

Nobody wants to think about it, but damages to your home can happen. In fact, the average homeowner files a claim approximately every nine years. When you’re in the midst of a crisis, it can be difficult to think clearly. You’re worried about the future and how you’re going to get back on your feet. Luckily, having home insurance can help make the process a little less stressful.

Knowing the claims process, and steps to take after an accident or disaster can be incredibly beneficial. Knowledge is power in these situations; and the more you know, the better chance you have to get what you deserve from your claim, and do so within a timely manner.

Who is the Claims Adjuster?

The claims adjuster is the person working for the insurance company. They are the person who will evaluate your claim, looking at the damage incurred and what your policy covers. They will also decide how much your insurance provider will compensate you.

The adjuster plays such an integral role within your claim and it is important to work with them. You will be asked questions about the damage and the condition that your home was in before it occurred. The adjuster will basically serve as the intermediary between you and the insurance company. You will be giving them all of your documents and evidence that the insurance company requires for the claim.

The First Step

First, you should document your claim through pictures or videos as soon as you are able to in order to paint the most accurate picture of the damage incurred. When filing the claim, take all of the costs into account, including money that you might have to spend on a hotel, missing days of work, labor and materials for repairing the property, as well as the value of the items that were lost or damaged.

Having a third party assessment done is a great way to get another set of eyes on the damage and to come with even more ammunition when the claims adjuster comes to assess the damage and offer a settlement.

Evaluate the cost of all the damage and compare it to your deductible. You don’t want to fall victim to the $0-Pay. Discuss with your insurance agent to see if it’s worth filing the claim. If the cost of the damage is right around the cost of your deductible, you might want to hold off to avoid filing an unnecessary claim that will go against your record and affect future insurability.

How Payment Works

When getting a payout for your claim, you most likely won’t get the entire settlement amount at once. Instead, the initial check will probably be an advance of the total amount. However, there is always a chance for an “on-the-spot settlement” in which case you will get the total check right away. This settlement can be reopened if you find more damage down the line, typically within the year of the damage.

Additionally checks for property damage, damage to personal possessions and additional living expenses incurred as a result of uninhabitable property, should come in separately, not in one lump sum. This can help make sure that the money is going toward the right funds.

Personal Possessions

In the event that personal belongings are damaged, one of the first steps you should take is to try and find out the cost of everything inside your home. If you have an inventory of your possessions, that will be incredibly useful in the process. If you don’t have one, look back at old photos and videos to recollect the things that might have been damaged.

Next, depending on whether you have an actual cash value or replacement cost policy, you will either get reimbursed for the items (factoring in depreciation) or for the cost of buying new items, respectively. In many cases, your replacement cost policy will require you to buy the replacement items prior to compensation and then they will reimburse you, so keep those receipts.

Additionally, talk to your insurance company about how much time you have to replace your items. Oftentimes, you don’t have to make an immediate decision.

Property Damage

If there is property damage to your home and you have a mortgage, the check will most likely be made out to your lender. This is typically laid out as a condition of granting your mortgage. By receiving the insurance check, the mortgage lender can help ensure that appropriate repairs are made to the property, as this is also in their best interest to secure both of your investments in the property. Therefore, in most cases, the mortgage company will have to endorse the check, with the money typically being put in an escrow account, paying for the repair work as it is completed.

If you are in a situation in which you need to rebuild your home you can decide if you want to rebuild on the same site, a different location, or not at all. The money you are given to do this will depend on the policy you purchased. Typically, you’re entitled to the replacement cost of your home, keeping in mind that your insurance company will pay to have your home returned to the state it was in prior to the damage, not for a bigger or more expensive place.

Additional Living Expenses

In contrast to the payout for property damage, the check for any additional living expenses should be made out to you. Though you may still have to get the check endorsed by the mortgage lender, these expenses don’t have to do with repairs to your home. This can help cover the additional costs of living in a hotel or getting a rental car.

Tips

  1. Be thorough and document everything. This includes the inventory of your possessions, documents and conversations with the insurance company, and being on top of deadlines and appropriate forms.
  2. If you are able to, be present for inspections by the insurance adjuster or independent inspector.   
  3. Make sure that you understand your insurance policy and everything that you are covered for. Know your rights.
  4. Stand firm to your claim. The process may take a little longer than anticipated and you may not get the compensation you expected. You are able to dispute it if you believe you’re entitled to more. Don’t be forced into settling by the duration of the process either, be patient.
  5. Be honest with your claim. Lying won’t get you any farther in the process and is illegal.
  6. Cross your ‘t’s and dot your ‘i’s. Make sure you get all the appropriate information from your claims adjuster including your claim number, and the name and phone number they can be reached at. This can help ensure that your claim is properly filed and your forms are accurate.

When push comes to shove, home insurance has your back. The reason you purchased it was to protect your investment, so if you need to repair damaged property or possessions, make sure you stay calm and understand the process so that you are able to restore this investment.

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