Your property insurance covers many events that can cause damage to your property. Unfortunately, not every event is covered. Earthquakes, floods and power blackouts are examples of events typically excluded without special arrangements for endorsements or separate policies. Even though excluded events are not covered, there may yet be coverage for damage that arises from a concurrent or ensuing covered event. We recommend that you assume you have coverage until you are informed otherwise by the insurance company.
When a catastrophic event occurs, you no doubt will feel overwhelmed by the loss and the confusion that follows. Advance preparation is your first prescription for getting through the experience. But, now that you have suffered a loss, you will benefit from the kind of information that proceeds from questions asked by others who have endured similar events.
What is the most important thing to do first?
Your safety always is the most important concern. Do not return to your property until authorities have signaled that it is safe to do so. When you approach the property, look for unsafe conditions, such as downed power lines, the smell of natural gas or unstable structural conditions. If it is safe to proceed, proactively shut off the utilities (electricity, natural gas, water, etc.) before inspecting the damage. Do not drink tap water (without boiling it for five minutes first) until you know the water is safe to drink.
My home is too damaged to reside in. What do I do?
Contact your relatives, friends and church affiliates to see if they may be able to accommodate you temporarily. You also may want to seek help from the Federal Emergency Management Agency, The Red Cross, the Salvation Army or any other disaster recovery service organization.
Your homeowners policy typically will pay your additional living expenses to reside at another location until repairs to your home can be completed. The typical homeowners policy covers events, such as a fire, windstorm or tornado. Unfortunately, even if you have a flood insurance policy, your additional living expenses will not be paid when the damages are caused by flooding. Keep this in mind when you make your living arrangements.
What can I expect the adjuster to do when he or she arrives?
The adjuster will “scope” the damage, a very important part of the claim process. An attempt will be made to determine the cause of damage, i.e., was the damage caused by wind, flood or both? Next, the adjuster will itemize the property that has been damaged. You will want to make sure that nothing is overlooked. The placement of values on the damaged property will not occur at this time. Appraisals, repair estimates and inventories will be obtained later to establish values.
Often, the adjuster will offer an advance payment on a covered claim so that restoration may begin and living arrangements can be made. Be sure to keep detailed records on how this money is spent.
Should I hire my own adjuster to assist me with my claim?
Public adjusters are paid a fee based upon a percentage of the claim settlement; typically, between 10 and 15 percent (state laws may apply). You will need to decide whether the adjuster’s services are worth the discounting of your claim settlement. Some of the services public adjusters provide are preparing the scope of damage; preparing inventories; ensuring that coverage decisions are reasonable; obtaining repair or reconstruction estimates; assisting with the presentation of the claim; acting as appraisers; and assisting with negotiations.
Our agency will help you with coverage issues and provide assistance in the claim process. If your property values are out of the ordinary or the sheer volume of inventory is burdensome to you, you may want the assistance of a public adjuster.
What if I do not agree with the property values upon which the insurance company is basing the loss amount?
It may just be a need for additional documentation. When you obtain the evidence that substantiates the property value, go back to the adjuster and negotiate a better settlement.
If the adjuster is being obstinate and unfair, you can request to talk to the supervising adjuster. Our agency will advocate on your behalf to the extent possible.
If you are unable to negotiate further with the adjuster, there is an “Appraisal” provision in your policy that specifies a procedure for resolving differences in the valuation of property losses. You and the insurance company each will get an appraiser at their own expense. Then, those two appraisers will choose an umpire (whose fee is shared). An agreement by any two of the three appraisers will establish the amount payable.
Any time you feel your insurance company is not treating you fairly, you may file a complaint with your state’s Insurance Department.
The following are some things you must do before you will get paid for your property loss claim:
1. Promptly report the loss.
Provided you have not been instructed otherwise, we ask that you contact our agency to give us a description of your property that has been damaged. In some cases (particularly, if our agency has also been damaged by the same catastrophic event), it may be necessary to report directly to the insurance company. It is vital that you report your loss as soon as possible in order to preserve your right to make a claim.
2. Protect your property.
When your property has been made vulnerable by a loss event, you are required to protect the property from further damage. This may mean covering property with a tarp, boarding windows, shutting off utilities (natural gas, water, electricity, etc.), extracting water from the structure or removing property to a safe location. Before you make these emergency repairs, take a liberal amount of pictures from different angles to document conditions immediately following the loss event. Be sure to save receipts for expenses incurred to protect your property so that you can be reimbursed according to the terms of the policy.
3. Separate your personal property.
Do not dispose of any damaged property unless government authorities require you to do it. Damaged personal property needs to be separated from undamaged property so that it can be inspected by the insurance company’s adjuster.
4. Inventory your personal property.
You will need to prepare an inventory of damaged personal property that shows the description, quantity, cost new (if known) and current value of each item. Provide all the evidence you have that will substantiate its existence and value (pictures, video, brochures, packaging, receipts, etc.).
5. Submit a proof of loss.
In most cases, you will be required to submit a signed, sworn proof of loss within 60 days. In addition to your inventory of damaged personal property, the proof of loss will contain information about the extent and cost of repairs to real property, other insurance applicable to the loss, all interests (owners and lien holders) in the property, preservation expenses, additional living expenses, loss of rents and any other statements or documents that support your claim.