The old Boy Scout motto “Be prepared” should certainly be applied to homeowner’s insurance as well. Knowing what you need to do and having clear, well-rehearsed steps to follow in case your home is burglarized, damaged, or destroyed will give you that much more confidence as you begin the home insurance claims process. After all, in the stress that follows a burglary, severe storm, or fire involving your home, being knowledgeable about the claims process can help you keep a level head in the midst of it all.
Is It Worth It to File a Claim?
Before filing a claim, ask yourself if doing so is really worth it in the long term. Your home insurance cost could rise significantly after filing a claim, which could impact your long-term finances for years. Filing too many claims can even lead your insurance company to cancel your policy, and make it difficult to get insured through other companies. If your home only sustains minor damage from a storm or only a few valuables are stolen after a home break-in, evaluate whether it is a good idea to file a claim with your insurance company. Sometimes it’s better to pay for the cost of repairs or replacement out of pocket rather than face a higher home insurance cost down the road.
“Consider the value of your claim,” said Rich Roesler, a spokesperson for the Washington State Office of the Insurance Commissioner. “Insurers consider your claims history when deciding whether to insure you or whether to renew your insurance policy. Make sure your claim is worthwhile. You might want to consider paying for the claim yourself if the damage is only slightly higher than your deductible. If you have catastrophic damage, and you’re looking at thousands and thousands of dollars of damage in repair bills, you might want to file a claim.”
Some experts recommend not filing a claim unless the repair costs are three times that of your home insurance deductible.
If you already took a thorough inventory of your belongings after purchasing home insurance, filing home insurance claims will proceed much more smoothly. You can simply refer to your personal inventory list when taking stock of what is missing or damaged. It’s a smart move to back this information up online in the event that your carefully crafted inventory list gets burnt to a crisp along with your belongings in a home fire. You should also back up all copies of receipts for your belongings online, particularly for your more expensive purchases, such as appliances, furniture, rugs, curtains, or flooring, including photos of these items as well.
After a peril takes place, Roesler recommends walking through your damaged home with a video camera, recording every last bit of the damage. Taking photos of the damage is also helpful to your insurance company, particularly if you have “before” photos of your home that you can use as a comparison. Keeping copies of your own photos or video footage of the damage could be helpful as evidence if you ever need to dispute facts in your claim later on, as they can help you prove the extent of your home’s damage or loss. If possible, jot down serial numbers and model numbers of appliances and other household equipment.
If you are not prepared with a detailed personal inventory of your belongings, you will have to go room by room through your home and write down any items that are damaged, destroyed, or lost after a covered peril. If your home was a total loss due to fire or other unforeseen circumstances, you will have no other option but to recall your items from memory, a predicament you do not want to find yourself in. If you did not keep an inventory of your belongings or receipts to prove the value of your property, you may be able to reconstruct proof of your purchases by looking at old credit card and bank statements, Roesler suggests, but such a process is arduous and generally only worth it for big-ticket items such as flat-screen televisions.
Once you have decided you have a worthwhile home insurance claim on your hands, call your insurance company or insurance agent immediately to begin the claims process. Remember that home insurance companies reserve the right to deny your claim in some instances if it is not filed in a timely manner.
When filing a claim, cooperate fully with your insurance company and thoroughly answer all questions so that your claim can be processed quickly. Some common questions you must answer are the approximate time and date the damage occurred, how the damage happened, and what was damaged. Your insurance company will assign you a claims adjuster, whose job is to investigate the facts of your claim and determine how much the insurance company is responsible for paying out to cover your claim.
If your claim involves damage or loss from crimes like vandalism, theft, or a home burglary, you will need to file a police report as well. Your insurance company may request a copy of this police report for their files. Other items your insurance company will request are receipts showing how much you paid for items that are missing or damaged, or any other evidence you have that proves the value of the items lost. Typically, you’ll speak with one claims adjuster over the course of your claim, but for more complex claims, you may speak with more than one, Roesler said. Because you may talk to several people concerning your claim, it’s important to keep a record of these conversations.
“Keep a journal handy,” Roesler said. “Any time you speak with someone concerning your claim, write down who you talked to, when you talked to them, and what you talked about. This record comes in handy later if issues come up regarding the claim.”
Along the way, if you need advice on home insurance claims, you can contact your state’s department of insurance. Each state department of insurance will have consumer services staff on hand who can answer any questions you have about the claims process and offer home insurance claims advice.
Do Not Make (Significant) Repairs Yourself
While you do have some responsibility to make temporary repairs to protect your home from further damage, it’s important not to make permanent repairs or throw out any damaged items until after your insurance adjuster has surveyed the damage.
Temporary repairs might involve putting a tarp over a hole in your roof to prevent rain from entering your home if your roof was seriously damaged in a storm, or putting plywood over broken windows after a home break-in. You may even want to mop up excess water after flood damage. Just do not arrange for any serious repairs until your claims adjuster has seen the extent of the damage.
“With storm damage, which Ö leads to water penetration and mold damage, you often get people wanting to get rid of things and throw everything that was damaged out right away,” Roesler said. “But if you throw it out, there’s no way to prove you had that stuff. Wait until the claims adjuster gets there before you start doing major repairs. If you feel like you need to make more significant repairs to prevent more damage from occurring, at a minimum, talk to your insurance company first and ask what you should do.”
If you do make some temporary repairs to your home, be sure to keep receipts for supplies you purchased for the job. Some insurance companies cover such expenses. “You very well may be able to be reimbursed for that without it applying to your deductible,” Roesler added.
Get a Second Opinion for Repairs
Many homeowners find themselves needing to hire a contractor to make repairs after their home is damaged. Once the first contractor has given you an estimate for repairs, we recommend getting a second opinion, since prices can be drastically different among contractors. Depending on the state you live in, you may be able to choose your own contractor to get the job done, rather than using the contractor selected for you by your insurance company, Roesler indicated. However, going with a contractor your insurance company recommends may expedite the process.
“You may want to be open to the contractors your insurance company recommends just to speed things up,” Roesler said. “But don’t be afraid to go to the insurer and say, ‘I know this person ó they do good work, and I want them to be my contractor instead.’ Don’t be afraid to talk to your insurance company about any contractors you prefer to use.”
Inspection Is Always Required
The claims adjuster who is assigned to your claim by your insurance company will pay a visit to your home to inspect the damage that has taken place. Claims adjusters may be employees of your insurer or independent contractors, according to the National Association of Insurance Commissioners (NAIC) Consumer’s Guide to Home Insurance. The insurance adjuster investigates what happened, the cause of the damage, and why the damage took place. After assessing the damages, the adjuster will determine how much your insurance company needs to pay to cover your claim, the NAIC guide indicates.
After the claims adjuster evaluates the loss, he or she will explain to you what losses, if any, are covered by your home insurance policy. The claims adjuster essentially interprets the wording in your home insurance policy and applies it to what they have discovered in the investigation, according to IRMI. The claims adjuster can also help you prove your loss to your insurance company.
It’s important to stay one step ahead of your claims adjuster. For example, before you do so much as mop up a mess after severe weather strikes your home, take up-close photos and video of the damage so that there will always be a record of the severity of the damage from the very beginning. Be proactive in your communication with your claims adjuster, bringing things to their attention as you lead them through your home. Your claims adjuster will also photograph the scene of the damage or loss, but in the event of a dispute over facts, it’s important to maintain your own photos and footage.
As with all other communications with your home insurance company, keep records of all correspondence with your claims adjuster in case you need to file a complaint or lawsuit down the road. If you disagree with your claims adjuster’s take on your home’s damage, it may help to have your contractor meet with you and the adjuster, the NAIC guide suggests.
Don’t Let Your Insurer Dictate the Claim Settlement
During the claims process, your responsibility is to prove to your insurance company that your home or personal property has sustained a covered peril. If you feel like you have satisfactorily proven to your insurance company that you have suffered a loss, and yet are not satisfied with your claim settlement, you are not forced to grit your teeth and accept the offer. You have options.
If you are unable to resolve the issues you have with your claim settlement with your home insurance company, you can contact your state’s insurance department and see if they can help you resolve the issue. You can also file a complaint with your state’s department of insurance if your claim is unreasonably delayed or denied. Your state’s insurance department is responsible for regulating the insurance industry in your state, as well as enforcing your state’s home insurance laws. These departments have the authority to take action against an insurance company that is not holding up its end of the bargain involving an insurance policy or that is not responding to your claim in a timely manner.
Another recourse you have is hiring a public adjuster to give a second opinion involving your home insurance claim. These professionals will assess the damage to your home and provide a valuation of the loss. Unlike a company claims adjuster, who tends to have the best interests of their employing insurance company at heart, public adjusters tend to have the interest of the property owner at heart.
However, it’s important to make sure that any public adjuster you hire is licensed to work in your state if your state regulates these professionals. You can find a reputable public adjuster by asking a trusted lawyer or accountant, contacting the National Association of Public Insurance Adjusters, interviewing the public adjusters you find concerning their credentials and asking for references, or calling your state’s insurance office, according to Bankrate.com.
Since public adjusters charge a fee for their services, you should make sure that utilizing their services is in your best interest. Public adjusters are most often put to use in large claims, rather than smaller claims that are less than $25,000, according to an insurance expert quoted in the Bankrate.com article.