Top 5 Tips for Preparing to File a Homeowners Insurance Claim
Having a Homeowners Insurance Policy does not always mean you are protected when you need it. Insurance Companies often make it difficult to understand exactly what is, and what isn’t, covered. Follow these Top 5 Tips to learn how to properly prepare for filing a Homeowners Insurance Claim. Learn what you can do to ensure maximum benefits you are entitled to are paid, when you need them.
1. CONTACT YOUR INSURANCE COMPANY
Keep it concise and to the point. Tell them you suffered a property loss. This puts your insurance company on notice and is required for almost every homeowners insurance claim. The insurance company will follow-up with claim forms for you to fill out. Use our Homeowners Insurance Section, FAQs and Insurance Glossary to decipher the details of your policy and be prepared to answer questions accurately and correctly.
Keep notes on your conversation. Include the name, date, contact information and a summary of the conversation.
2. PROTECT YOUR PROPERTY FROM ADDITIONAL DAMAGE
This is called “mitigating the loss” and it’s important. Once you discover property damage, you are required to take reasonable steps to prevent additional damage to your property.
As an example, consider a house fire that burns a hole in the roof. Homeowners insurance should cover the hole caused by the fire. However, will the policy cover damage from rain leaking into the house? This damage might not be covered if you fail to mitigate your loss.
In this situation, you need to work on fixing the hole right away. If you don’t, the property damage could get worse. Rain could destroy other parts of the home – the carpet, walls and furniture. If you fail to mitigate the loss, your insurance company may argue that is not liable for any of the water damage.
Keep a record of what you do to “mitigate the loss.” Save receipts for repairs, invoices from repairmen. As long as you can show that you took reasonable steps to “mitigate the loss,” all of the damage should be covered by your homeowners insurance.
3. KEEP TRACK OF YOUR LOSSES
Write a detailed list of everything in your home that was lost or damaged. This includes damage to the structure of your home, furniture, appliances, personal property, etc. Include as much as possible, even if you think that some property might not be covered in the policy.
Find the cost of replacing each of the items on your list. Don’t exaggerate the value of your damaged goods. Insurance companies are experienced at estimating replacement costs and will view your claim with distrust if they suspect exaggeration.
Take pictures of the property damage and gather as many receipts for your property as possible. Document everything – you’ll need it during the homeowners insurance claim process.
Do not throw away damaged property unless the insurance company gives you written authorization to do so. Otherwise, the insurer may later argue that the claimed property damage never occurred.
In the event of structural damage to your home, hire experts such as contractors, engineers, or architects to evaluate your losses. Make sure the experts give you a “bid” to repair the damage. The bid should be the cost of restoring your property to its original condition, using the same quality of products.
When the insurance company sends its own experts to evaluate your damage, they will “estimate” that your property damage is less than it will actually cost to repair. The insurance agent’s “estimate” is not the same as a “bid” to fix it. You need to know the difference, otherwise insurance companies will undervalue your claim. Use your own contractors and experts. Do not rely on insurance company experts or insurance software programs.
4. REVIEW YOUR INSURANCE POLICY
Read the terms of your homeowners insurance policy and follow the instructions for filing a claim. Think before you act. Here are some important things to look out for.
Sometimes your policy says you need to replace damaged items before they pay you. Read the policy carefully.
Your policy might say the insurance company has to pay you within a certain amount of time. Make sure you record the date and time of all communications with your insurer.
Your policy will have a “maximum benefits” provision. That means you only get paid for up to a certain amount of damage.
Your policy will have a “deductible.” That means you have to pay a certain amount before your insurance company jumps in to cover the rest.
The policy might have a “rider.” For example, your policy could say your max benefits are $200,000, but a “rider” might raise your benefits to $250,000 or more. Be on the look out for a “rider” in your policy.
The policy will have “exclusions.” For example, your policy might say it does not cover damage from hail, landslides etc. When you tell your insurance company about property loss, don’t explain the cause of the damage if you’re uncertain.
5. KEEP DETAILED RECORDS
When you speak with insurance representatives, take notes. Write down the date & time, explain what you talked about.
Keep a copy of each letter the insurance company sends to you.
Avoid the temptation to send angry letters or emails to your insurer. The company will document this and use it as an excuse to underpay your claim.
Protect your own records by keeping them in a digital format or in a safe place. Homes with structural damage are more likely to suffer additional damage over time. Be sure to keep documents, receipts and photos somewhere safe.
Author: Matthew Bourhis, Disability Insurance Lawyer, Ray Bourhis Associates