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Advice on making a property damage insurance claim

Advice on making a property damage insurance claim

You have just experienced a property damage claim (fire, water, wind, hail, etc) to your home or business. So what do you do now? Do you immediately start cleaning up the mess? Do you start making repairs? Where will you live or relocate while repairs are taking place? There are things that you must do after you have an insurance claim, and things that should not be done. Your insurance policy is a contract between you and the insurance company. That contract spells out things that should be done (terms and conditions), and things that should not be done after you have had a claim. Your failure to comply with the policy’s terms and conditions could result in your claim not being paid. Following the helpful tips below will help guide you through your claim, and hopefully make it a smooth process.


Do

Do notify your insurance company

Sounds pretty basic right? However, many people think they can move forward with repairs or start to replace damaged property immediately after a claim. The fact is that your policy requires that you give prompt notice of a claim. Should you remove damaged property or alter the scene where the claim occurred, you may have your claim denied if your actions compromised the insurance companies ability to investigate the claim. The insurance company has the right to inspect all damaged property at anytime during the claim. They also have the right to investigate the cause of the loss and pursue other responsible parties. Therefore, the first thing that should be done is to notify your insurance company or insurance agent. All companies have 24/7 claims reporting phone numbers so you can report the claim anytime, day or night.

Do secure the property and prevent additional damage

Once you have reported the claim to your insurance company, it may be days before an adjuster will come out to inspect the property. You must ensure that no additional damage is caused after the initial claim. Should additional occur, the insurance company may not be responsible for this damage. Additional damage could be caused by a hole in the roof, a home or business not properly secured, windows not secured or water damage not addressed that causes mold or rot. Some ways to avoid additional damage would be boarding up doors or windows that were broken and tarping any holes in the roof. You should also remove any standing water or dry the affected area. All of this is considered emergency repairs and is completed to avoid additional damage to the property. You must ensure that no further damage is caused to the property, or this additional damage may not be covered. You should also keep in mind that nothing should be thrown away and the scene should not be altered where possible until the adjuster comes out and inspects the property.

Do find temporary housing to live in

If your home is unable to be occupied after a loss, you will need to locate a temporary residence. The temporary home should be comparable to your current residence and furnished with comparable contents. If you had a 4 bedroom 2 bath home with a 2 car garage, that is what you are entitled to until you are able to move back into your home. You can rent furnishings until your contents are returned or replaced. If you have pets, you will need to find a property that will allow pets. This is covered under your additional living expenses portion of your policy. You are entitled to maintain your usual standard of living, while you are displaced from your home.

Do make a detailed inventory of damaged property

All insurance policies require that “you” make a detailed listing of all property damaged in the claim. This includes listing a description of the item, make and model number of items, age of items, the replacement cost of the item (what the items costs today to replace, and not what you paid for the item years ago) and the items actual cash value (it’s value at the time of the loss). As you can see, this is a very detailed list that must be compiled and it must be done for every single item that you are claiming. In the event of total losses, the items may not even be visible. You must still recreate from memory an inventory of all the items in order to be paid for them. This part of the claim is one of the most difficult and most challenging undertakings, but is very critical if you want to be paid for the contents that you lost in your claim.

Do hire professional help to get you through the red tape

It is a good idea to obtain the assistance of a licensed public adjuster. A public adjuster is a licensed professional adjuster who represents homeowners and business owners -- people like you -- rather than the insurance company. A public adjuster will handle all aspects of your claim, including assisting with temporary housing, inventorying contents, and providing estimates to repair the damage to the building. Your public adjuster will handle all negotiations with your insurance company and essentially level the playing field. A public adjuster can assist in many ways when you have suffered a loss.


Don't

Do not begin repairs until approved by insurance company

After a disaster, you will be tempted to start repairs right away. However, this could ultimately hurt, rather than help you. Your insurance company will want to come out and inspect the property before repairs begin. After that, you must ensure that you and your insurance company agree on the repairs and the cost of those repairs. If you start repairs before the insurance company inspects the property and approves them, the insurance company may not pay for the repairs or may not pay enough for the repairs. This could leave you paying for those damages out of your pocket. There is always a lot of negotiating large insurance claims. You must be patient and be prepared to wait to start work until you know it will all be covered.

Do not throw anything away

Your insurance company will want to come out and inspect the damages. You should not throw away any items that are damaged, until the insurance company has authorized this in writing. This also includes any receipts that you may have. Receipts can help justify the item existed and give an idea of the quality of that particular item. This holds true for credit card statements and bank statements. These items will help you support your claim and the values of the property. Your policy states that the damage property should be available for inspection at anytime throughout the claim. Should you dispose of your “evidence” prematurely, you risk having these items denied coverage or not paid for.

Do not assume you have to use the insurance company’s vendors

Many times the insurance company will come out with their contractors and their cleaning vendors and encourage you to use them. However, it is up to you, who handles the repairs and who works on your property, not the insurance company. You decide who you hire and what they do, not the insurance company. Take some time and talk with other people who have had claims. Speak with your local Better Business Bureau or any of the web based companies who track contractors and their history. It is your decision alone, who you hire after you experience a claim.

Do not respond by repairing or replacing the property

Your home or business has just suffered a lot of damage from a fire, flood or similar event. You have to make the repairs and move back into the property right? No, this is simply not the case. You do not have to make the repairs or replace the contents that were lost in the event. Your insurance policy is a legal contract between you and your insurance company. The insurance company must pay you for the damages whether you rebuild or not. You can use the settlement to purchase another property in another location rather than make repairs to the old property. Or you may simply cash out your settlement and not replace anything. Remember, when you suffer a loss to your property, you do have options. Make sure you explore them all, and then make the best decision for you and your loved ones.

Do not allow your settlement to be paid to other parties

You hire a contractor to make repairs, and now the insurance company wants to pay them directly. Sounds like a good idea right? Wrong. What happens if the work does not get finished or is not done to your satisfaction? The contractor has now been paid in full and you are left with a house that is not to your liking. This is why you should have all payments issued direct to you only, and then you are responsible for paying the contractor when the job is finished and you are satisfied with the work.


Summary
Jumping cartoon

After you have had a claim to your home or business, your world is thrown into a tailspin. You will have many different parties advising you how to proceed, and you must start making some very important decisions right away. At this time, everything you say and do, affects the outcome of your claim.


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Photo Credits: Fallen trees uprooted by tornadoes rest on roof of Tuscaloosa Ala. home © USACEpublicaffairs - Flickr.com; Check Man, Cross Man and Jump Man © ioannis kounadeas - Fotolia.com

Robert W. FreitagFounder and President, AmeriClaims

Founder and president of AmeriClaims, a public insurance adjusting firm in Charlotte, NC. Worked and trained in London, England with Lloyds of London, after earning a Bachelors Degree in Business Administration at Western Carolina Universit...

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