Insurance companies provide essential protection for your home, safeguarding you from accidents and natural disasters that can cost you enormous sums of money. But unfortunately, when something does happen, the insurance company’s primary concern is to pay out as little as possible for your claim. A homeowner already under stress can easily make costly mistakes when navigating the claims process. Here are the steps you should take to prevent that:
When damage occurs, contact your insurance agent or company as soon as possible. If you aren’t sure whether you have a claim, call them and ask, but do not wait. These are good questions: Am I covered? What is my deductible? How long do I have to file a claim? How long will it take to process it? Will I need to obtain estimates for the repairs needed?
If your loss is lower than your deductible, you probably won’t want to go through the claims filing process. But if you decide to proceed, the process will involve an evaluation, negotiations, and a resolution/settlement.
Prevent additional damage to your property and the possibility of a third party becoming injured on-site by securing your home and the premise. It is your contractual responsibility as the policyholder to mitigate additional damages post-disaster. Photograph or videotape the damage, then take reasonable steps to protect your property from further damage. If possible, avoid throwing out damaged items until the adjuster has visited your home. Save receipts for what you spend as you may be able to submit them to your insurance company for reimbursement later.
Your insurance company will send an adjuster to assess the damage. This person will take pictures and measurements and come up with a “cost to replace” figure. Be prepared for this visit by making a list of destroyed or damaged items and have a copy you can hand out to the adjuster. Also, supply him or her with any available copies of receipts from damaged items.
A common policyholder mistake is assuming that the insurance company’s adjuster is impartial. Unfortunately, the adjuster works directly for them and is looking out for the insurance company’s best interests. You have the right to hire your own set of professionals, such as a public adjuster, to help you through the claims process. Another option is to get estimates from different independent contractors in your area (three is a good number), so you have a clear image of how much the repair is truly going to cost.
Based on the adjuster’s measurements and calculations, the insurance company will typically offer you a compensation package that does not come close to covering the actual cost of the repairs. They will contend that they are using “a national estimating computer program” to calculate the price, but most of the time this figure is not realistic to do the repairs. They may also deduct substantial amounts of money for the age of damaged fixtures and appliances. For example, if your super reliable 10-year-old refrigerator gets damaged in a flood, you could be in for a shock when the insurance company offers you $100 towards a new one. So talk with your insurance agent about whether your insurance coverage includes replacement cost or pro-rated value.
Have you ever noticed that it takes months or even years to repair a house after a fire? The claims process is full of delays, and that is no accident. Insurers will slow the process down until you accept a package that is less than what you are entitled to.
In fairness, insurance companies need a reasonable amount of time to protect themselves from people who try to take advantage of the claims process. However, most claimants only want their life and belongings back — that’s why they have insurance in the first place. So, what is an acceptable amount of time for them to process your claim? To give you perspective, here at Polli Construction we only need 5 -10 business days to get all our numbers together after visiting the site of an extensive house fire. Rebuilding can start almost as soon as we get the green light from the insurance company. So 30 days should be plenty of time for the insurance company to approve an estimate for repairs. Anything beyond that you have the right to complain.
Due to frustration, many homeowners eventually capitulate to the insurance company’s compensation package. But if you are willing to fight for your rights, your next step is to contact the Vermont Department of Financial Regulation. They govern the insurance industry in the State of Vermont, and their job is to assist you with any insurance related issue you may have. They will review your claim and fight for you if needed.