Dealing with the impact of a natural disaster such as a hurricane, fire or earthquake can be stress-inducing and traumatic. And though policyholders tend to expect insurance companies to seamlessly fix any natural disaster-related destruction once a claim is filed, that's not always the case. In fact, consumers often make filing mistakes that cost them thousands of dollars. Without carefully reading the fine print, you may be underinsured or need to pay for coverage out of pocket.
Why Isn't Filing a Homeowners Insurance Claim…
So, if you're trying to determine what your insurance policy will cover to file a claim effectively, consider this your natural disaster aftermath action plan.
What Does Renters Insurance, Home Insurance and Water Damage Insurance Cover?
While renters insurance covers your belongings inside any property, such as an apartment, it doesn't cover the actual building; your landlord's insurance would cover building-related damage. Home insurance policies, on the other hand, cover the cost of your property, as well as the assets inside and often will pay for medical bills if somebody is injured inside the home.
Water damage insurance covers your property from water damage, often from rain, such as a leaky ceiling, or from a sewer backup. Generally, it's a wise idea to invest in flood insurance even if your home isn't in a high-risk floodplain area if it still has proximity to waterways.
How Do You File a Successful Homeowners Insurance Claim?
After a natural disaster, you want to act quickly. Here are crucial steps to take:
Take photos of the damage. Documenting any damage should be one of your first steps, if not the first one, says Stacey Giulianti, chief legal officer at Florida Peninsula Insurance Company in Boca Raton, Florida. As long as it's safe, Giulianti cautions, take photos of the visible damage "as well as rooms or areas that are not damaged."
Why rooms that aren't damaged? Giulianti says that it'll give the carrier proof of a well-maintained home. Plus, "it prevents unethical public adjusters and contractors from defrauding the homeowner by finding additional damages in those unaffected rooms," Giulianti says.
Rob Yancey, a business insurance advisor with Jones Insurance Agency in Garner, North Carolina, has another tip for those dealing with the aftermath of a natural disaster, such as a hurricane or flood. Once you take photos, send them to your family or friends, to be on the safe side. You don't want to risk later damaging or losing your phone and not being able to access your photos.
You also want to take a lot of photos and make sure they capture a lot of detail, says Jerry Linebaugh, founder of JLine Financial, a financial services firm in Baton Rouge, Louisiana.
With water damage, Linebaugh suggests going the extra mile and taking photos, using rulers or yard sticks to show the scope of the damage. "Your willingness to take whatever steps you need to make your insurance company fulfill the contract details can make a huge difference," he says.
Linebaugh offers up the example of his sister and brother-in-law's home, which flooded in 2016. "The adjuster claimed that only in one room of their completely level one story home did the water reach 2 feet, but in the other rooms it was nearly a foot lower," Linebaugh says. "This denied them over $30,000 of policy claim assistance. The dispute is still ongoing in 2019," he adds.
Make emergency repairs. If it's safe, you should secure your home and mitigate additional damage. That might be something like boarding up windows or tarping a roof, Giulianti says. "Consumers are required to stop further damage from occurring in order to ensure coverage for their loss," he says.
Ike Devji, an attorney who owns Arizona Wealth Law in Scottsdale, Arizona, agrees. "Most polices have language that requires you to take reasonable measures to prevent further damage after it has come to your attention," he says.
If you end up spending money to do that, like buying a tarp for your roof, save the receipt for your insurer, recommends Jennifer Brault, Nationwide's vice president of personal lines property claims. Just remember to take those photos before you make any emergency repairs.
Contact your insurer. You'll want to do that as soon as possible, of course. "Get a claim number issued immediately so you are in the system and have something to refer to on all future calls and correspondence," Devji says. "Without a claim number you do not exist."
Devji recommends that you keep a written log of all phone calls and correspondence with your insurance agent or anyone you talk to about the damage.
That may sound like overkill, but according to Devji, "Many insurance carriers intentionally obfuscate contact numbers and provide an endless maze of dead-end fax and phone numbers, in an effort to delay timely processing of claims or paperwork you away."
And when you talk to your insurer and file your claim, or when you talk to an adjuster, be careful about what you say when describing the damage, Devji warns.
"You are not a contractor, so don't give opinions on the scope of the damage and costs," he says. If you underestimate the damage, Devji thinks that will likely be used against you later.
Understand what your policy covers. Make sure you read your policy and assess what your claim involves, especially if you have different types of insurance covering your property and assets. For instance, depending where in the country you live, you might have flood insurance, earthquake insurance and homeowners insurance.
"Make sure you are making a claim on the right policy," Linebaugh says. "For example, if water enters your home from rising water seeping or running into your home, that's a flood claim, but if a flying object breaks a window in a storm and you have water that ruins flooring or other things, that's regular homeowners or renters insurance."
It'll likely be figured out sooner or later when you talk to an insurance agent, but if you want to be paid sooner rather than later, it's best to have these details understood before you call.
Vet the contractors you hire to fix your property. This can be the most stressful part of the cleanup. Your insurance company understandably doesn't want to overpay for the services, and you certainly don't want to hire a contractor who does a lousy job. In fact, you'll want to be careful about who you hire. Your policy may cover resulting damage, which is the cost of fixing repairs made worse by a contractor. But what if your policy doesn't cover resulting damage? Even if your policy has it, that doesn't mean it'll cover poor craftsmanship – say, a repair that is safe but looks shoddy.
You'll want to make sure your contractor is licensed, and you'd do well to get estimates from at least three contractors. And be sure to check references. Even if the contractor comes recommended by your insurer, you should look online at reviews and comparison-shop and make sure you're comfortable with this decision. Be wary of contractors who show up at your door. That's often the sign of an unlicensed contractor and sometimes the hallmark of a scammer.
Why Coverage Can Be Denied
Even if you act quickly to submit your claim, there are several reasons why your claim may be denied. For one, you may be denied coverage if you're underinsured; in some instances, you may have coverage, but you won't be compensated for the full extent of the damage based on the terms and conditions in your policy. Say you have $300,000 worth of damage, but you were only covered for $200,000. While your claim wouldn't be denied, you would need to pay the remaining expense out of pocket. You can also be denied coverage if your home is impacted by a natural disaster that you don't have coverage for, like earthquake coverage. If there's evidence that you created additional damage or that you didn't take proactive steps to make necessary repairs to mitigate additional damage, your claim could also be denied. And if you hired somebody who wasn't licensed and added more damages to your home, or if you tried to make repairs and created more problems, your insurance provider may also deny you coverage.
Article source: money.com