While it is easy to discuss all the negative aspects associated with a claim, I try to put a different spin on it at my own agency. I have instilled the value in my staff that a claim is the truest opportunity for us to prove our service and care to our clients. In this one moment, a broker becomes the single most important person that the homeowner needs to deal with. Homeowners will forever be distressed--and understandably so--when something unexpected happens and causes damage to their property. It is our job as a broker to walk them through the claims process step-by-step, and reassure them that their house will be repaired back to normal. This expert advice can help any homeowner when it is time to file a claim.
Claims-handling is really very simple. An insurance policy, in essence, is a written contract between the insurance carrier and the insured. As long as the broker includes coverage items for every possible exposure a homeowner can have, the homeowner will never have a problem when it comes to filing a claim. It is very important for a homeowner to be familiar with the coverage in their policy so they know what is included and what is excluded, so there are no surprises when a claim occurs.
As soon you are aware of damage to your home or an injury on your property, contact your broker immediately so they can get the ball rolling on notifying the insurance carrier. The sooner the carrier is notified, the quicker they can send an adjuster to survey the situation and come to a conclusion on the claims payment. Especially in the case of a liability claim where a person is injured, the carrier needs to obtain an accident report and medical records to determine which injuries were caused by this particular incident, and which were pre-existing.
After a claim occurs, a homeowner needs to go into lawyer mode. Take pictures of the direct damages to your property and the area around the claim site. Keep records of all conversations with the insurance carrier and the names of the representatives that are reaching out to you. Keep the adjuster’s contact information handy so you can reach them if any questions arise. Make sure you keep a detailed folder on all correspondence throughout the process, so you have proper evidence of everything that has occurred after the claim event.
After an adjuster surveys the damage, they will send a detailed report to both the broker and the insured with their recommendation for claims payment. This is not set in stone and can absolutely be argued. Review every word and figure of this document to make sure the adjuster did not miss anything. The ultimate end goal of the claims process is to have your house back to it’s pre-claim condition with the only financial hardship being the deductible you have to pay as part of your policy. (Deductible refers to the self-insured retention you agree to for any claims on your policy. It ranges from $500-$10,000.)
A huge mistake homeowners make is starting repairs right away after a claim. Many people will hire their friend down the street to come patch up their siding right after a major windstorm. This can cause your claim to be denied. An adjuster has to survey the damages before they are fixed and only licensed contractors can be used to make the corrections. While I completely understand the eagerness to get your house back to it’s normal state, patience in this event can be the difference between the insurance carrier paying for the damages or not.
Adjuster’s can request receipts for any of the items destroyed to aid them in their reporting process. Keep a folder in your home where you simply place all receipts of items purchased. I’m not talking about little knick knacks; just keep track of your furniture, appliances, electronics, and any items of value. This can come to your defense when an adjuster is trying to pay you the “going rate” of $600 for the $3,000 boiler you installed the year before a hurricane.
A public adjuster is an adjuster hired by the homeowner to complete their own claims report to combat the adjuster sent by the insurance carrier. A public adjuster can be useful in the case where a company adjuster is refusing to give you the money you are entitled to based on the policy guidelines. Just be aware that a public adjuster charges 10% of the total claims check as their fee regardless of when they are hired. The best bet is to have your broker carry the fight with the company adjuster for you, and only bring in the public adjuster if your broker can’t make any ground.
Claims checks come in two installments if your policy is written properly with replacement cost. The first check covers the depreciated value of the loss. The second check covers the “recoverable depreciation” you are entitled to if your policy is written with replacement cost. If your policy is not written with replacement cost, you will only receive the first check and the secondary money will be listed as “non-recoverable depreciation.” In the case where you do have replacement cost and are entitled to your “recoverable depreciation,” receipts need to be turned in to the carrier showing you used up the first claims check on necessary repairs and replacements to correct the claim situation. Only then will the second check be released to you. This protects the carrier from any fraudulent activity with the claims check by the insured.
The claims process is far simpler than most would think. As long as you are knowledgeable of your coverage and keep thorough records immediately following the reporting of a claim, the process should move by quickly and seamlessly. The purpose of purchasing insurance is to protect people’s assets from unexpected occurrences. If a homeowner has a good broker that gives them proper protection, there is no need to fear when a claim occurs.
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Photo Credits: Tornado Strike Northeast Charlotte 3.3.2012 © charlottefire - Flickr.com; Check Man, Cross Man and Jump Man © ioannis kounadeas - Fotolia.com