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Settling a Homeowners Insurance Claim
Your home was just damaged from a severe storm. What should you
do? Who should be notified? Should you file a claim with your insurance
company and if so, what should you expect from them? These are
just a few of the concerns expected from a home owner facing a
major loss. By having a general understanding of how insurance
companies handle claims prior to filing one, you’ll likely
be better prepared going into the process.
Loss prevention and claims
preparation tips
- Review your homeowners insurance policy and its coverages
in order to understand what is and, more importantly, what isn’t
covered. All homeowners insurance policies have exclusions
and limitations
and it’s best to know what they are prior to a loss. Often,
coverage for an exclusion can be obtained through an endorsement,
which “buys back” policy coverage.
- Evaluate the general
condition of your property. Make repairs that might
prevent future losses. Check sidewalks for deterioration
and major cracks that could create a safety hazard. Roofs should
be checked annually for leaks. Steps that are left in disrepair
could potentially lead to a major lawsuit if someone were to
fall and be injured.
- Prepare a home inventory of your personal property
and belongings. An inventory can be a time-saver after
a personal property loss and will help to speed up the claims
process.
Home inventory tips
- Include as much detail as possible
such as the date, cost, where the items were purchased
(receipts are a good source
for this information), brand name, model and serial
numbers.
- Download
free home inventory software to your
home computer. The Insurance Information Institute created
a computer
program that makes conducting a home inventory less time-consuming
and easier to complete. The software allows you
to catalog
possessions
room by room. Once completed, you can access it to
add items and even photos for additional documentation.
- Use a video camera to visually document each room,
closet and even contents in drawers. Provide a narration
while walking
through
each room, detailing high-ticket items such as
computers and home electronics. A video serves as documentation
of your possessions
and the items contained in a room, especially if
damaged by fire, theft or severe storm.
- Ask your insurance
company for a home inventory form, or use OII's home
inventory form located
online at www.ohioinsurance.org/renters_insurance/images/inventory.pdf.
- Copies
of your home inventory (photos, videos, CDs, etc.)
need to be securely stored off-premises,
such as in a safe
deposit box.
The claims process
To file or not to file a claim—that is
the question...Following a property loss, contact your insurance
agent or company representative
with loss details as soon as possible. Discuss the chain of events
with your insurance professional and determine if a claim should
be filed. You might consider obtaining a contractor estimate to
provide a damage assessment prior to filing a claim. Many consumers
select high deductibles ($500, $1,000 or more) as a cost-savings
measure. You may consider not filing a claim if the amount of the
loss is close to your policy deductible or if you’ve filed
multiple claims in recent years. Your insurance professional can
provide guidance on what’s best for you.
If you are filing
a claim, the company should provide information regarding the claims
process. The insurance company will ask you to complete claim forms
regarding the loss, which includes detailing your missing or damaged
possessions.
Having prior documentation of your personal property (through a
video tape, an inventory list and/or photos) can greatly assist
with the claims filing.
The insurer will assign a claims adjuster
to work with you. Depending on the extent of the loss, the adjuster
may conduct a personal
interview regarding the claim, request an inspection of the damages
for a loss assessment and possibly ask for a copy of an itemized
list of the damaged property. The adjuster may want to tape record
discussions regarding your claim.
Keep your insurer notified of
any developments associated with a claim. For instance, if someone
is injured on your property and
you receive legal documents from the other party, contact your
company immediately. Keep in mind that homeowners insurance provides
legal defense coverage if sued as a result of such a claim.
In situations
where property damage is extensive, try to protect against further
losses by making temporary repairs. For example,
if a tree falls and damages your roof, cover the hole with wood
or plastic. Keep receipts associated with such repairs. These may
be reimbursable under your homeowners insurance.
If a loss forces
you to obtain a temporary residence, be sure to inform the insurance
company. Most homeowners insurance policies
also cover this under “additional living expenses.”
Don’t
throw damaged property away unless instructed to do so by the adjuster.
To save time, you may start obtaining written
repair bids from licensed contractors. However, repairs should
not begin without prior approval from your insurer.
Other claims settling tips
- Track all expenses associated with the
loss. They may be reimbursable under your homeowners insurance
policy. Examples could include
mileage and meal expenses if called into court for the claim
or temporary repairs made to protect against additional damage.
- Keep copies of all your paperwork for future reference.
- Don’t
start permanent repairs until the insurance company claims adjuster
has assessed the damage and you’ve been
given the go-ahead.
- You have the right to choose the contractor.
Your insurer may provide you with a list of pre-approved contractors
to save time and
hassle, or you may be asked to obtain written estimates from a few licensed
contractors of your own choosing. Regardless of the procedure,
the policyholder has the final say in contractor selection.
- You
have the right to negotiate the settlement. If you’re
having a difficult time with the adjuster, contact the company
directly and ask to speak with the consumer services department
or the claims division manager. If you still find the settlement
unacceptable, follow the appraisal procedure outlined in the
insurance policy. Most appraisal procedures work by you hiring
an independent
appraiser at your expense. Once the appraiser reaches an agreement,
the claim is settled at that amount.
- If you feel that you’ve
exhausted all efforts with the insurance company, call the
Ohio Department of Insurance Consumer
Hotline
at 1-800-686-1526. The department, which regulates
all insurance agents and companies within the state, will provide
you with
information and advice on how to proceed.
- If you still can’t
reach an agreement, you always have the option of seeking outside
legal advice. Remember, you are
responsible
for these legal fees. But by obtaining legal counsel you sacrifice
the ability to represent yourself directly with the insurance
company. All future correspondence regarding the claim is then
handled through
your attorney.
Choosing a contractor
Before you arrange for repairs, guard yourself
against dishonest contractors:
- Obtain more than one estimate. Don’t
be bullied into signing the first contract that is presented
to you.
- Obtain all information in writing, including cost, work
to be completed, repair time and payment schedules, contractor
guarantees—and
make sure all details are provided.
- Ask for references and
check them. Your local Better Business Bureau can serve an additional
point of reference.
- Ask for the contractor’s drivers license and
write the number down along with a description of the vehicle
and license
plate
number. Many times contractors come into disaster areas from
out of state when damage is widespread.
- Never sign an incomplete
or blank contract.
- Don’t pay for the repairs or sign a
certificate of completion until all work has been completed in
accordance with the
contract specifications.
- Don’t be tempted to conspire in
a fraudulent insurance claim. Insurance fraud is a felony.
Disaster repairs often heighten
the opportunity for insurance fraud and abuse. Also, be aware that
insurance coverage may be void if a policyholder’s
intentional misrepresentation is discovered.
Portions excerpted
from National Insurance Crime Bureau, Disaster
Fraud: Don’t be Victimized Twice
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Dog-bite claims cost insurers $345.5 million
in 2002, accounting for fully a fourth of all liability claims.
(The St. Louis Post-Dispatch, 6/24/04) |
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