Homeowner’s Claims Process Explained,

Accidents happen. That’s why you purchase insurance; to cover the costs of when the unforeseen occurs. Your house is struck by lightening. A pipe bursts and floods the building. A tree falls on your home.  Your homeowner’s policy, minus the deductible, pays to fix the damages. Eventually—depending on the extent of damage—your home is restored and missing or broken contents replaced.

 

By planning in advance, you can understand how to best proceed with filing a claim and getting repairs done as quickly as possible. If you understand how estimates for repairs are handled, you will be able to work more efficiently with your adjuster and contractors.

 

         What is Covered in Your Homeowner’s Policy?

 

Reading over your homeowner’s insurance policy is always a good idea, but there’s a lot of fine print and there may be paragraphs you miss. Your agent is your intermediary to explain and advise coverage. When you purchase insurance, discuss what you are buying with your insurance agent. Discuss the size of your deductible and how it will impact the price of your yearly premium.

 

If you are not certain if a loss is covered, call your agent and ask, before filing the claim. Having a local agent and working with an independent agency like the Crilly Insurance Agency puts you at an advantage. If you directly call your insurance company and they send out an adjuster to evaluate your claim, even if no claim is actually filed, it will be noted with your company and might  be tallied into the number of claims you file in a three year period.

 

File more than two homeowner’s claims in a three year period, and an insurance company may decide they do not wish to renew your policy.  Other companies may be reluctant to offer coverage and your rates can go up.

     Choosing Higher Deductibles

 

Most homeowner’s policies have a minimum $500 deductible. The higher the deductible, the lower your yearly premium. A $2000 deductible provides substantial savings, but if a loss occurs you will need to be able to contribute your deductible payment to pay for the claim.

 

For example, if your deductible is $500 it means that if you house is burglarized and $20,000 worth of items need to be replaced, the first $500 will be paid by you. Thus your reimbursement check, once you provide your insurance carrier with receipts, is $19,500.

 

The higher the deductible, the lower your premium. If a burning candle causes $3,000 of damage—destroying draperies and ruining your dining room table— and your deductible is $1500 the company’s share towards repairs will be $1500.  At this point you may ask yourself, is it worth filing a claim?

 

It can be to your advantage to avoid filing small claims, that could cause premiums to increase. Look at the bigger picture.

 

 Home Inventory

 

Photographs of the exterior and interior of your house, including an inventory of contents is a “must have” when trying to tally what is damaged and what is missing.  As soon as you move into a new home, and at periodic intervals you should assemble a list of possessions. Videotaping from room to room can be an easy way to assemble an overview of your furniture, appliances, and decorative accessories.  You don’t want to miss including everything in your inventory.

 

If you do experience a loss—fire, water damage, or theft—you’ll have the records you need to compile a list of what should be replaced.

 

 Photographic Record

Take photographs or videos of all portions of your home that are damaged and document the work as it is done to show Before and After progress. If you have a dispute on the repair or renovation work, you have a reference point.

 

                                     How is the Cost of Damage Calculated?

 

While small home improvement contractors in business for over ten years may have a feel for numbers, and walk into a room and be able to quickly estimate what they will charge to get a project done; insurance companies want to use a method that is consistent and accurate. Many insurance adjusters use a computer program such as one called Xactimate that calculates costs based on geographic location, labor, and materials. Based on their calculations the adjuster for your insurance company will set aside what they estimate will be enough funds to cover the repair and replacement costs to pay for a loss.

You will be responsible for paying the deductible. If your home is mortgaged, checks to pay for work will be made out to you and the mortgage company.  The mortgage company is an interested party in seeing that your home is kept in good repair and they will want to verify that the insurance funds are being used for that purpose.

 

     Choosing a Contractor

 

You may have a contractor you have worked with in the past of a company whose work you admire.

The insurance company should also provide a list of contractors in your area, who they have worked with in the past and your Insurance Agent can also give you names. Whoever you end up using must be bonded and licensed.

It’s always a good idea to get estimates from multiple contractors. Compare timetables for work completion and their descriptions of the work to be completed.

Once you select a company that will do the work for the agreed upon amount, they may ask you to pay you portion of the bill ( the deductible) up front as the deposit to proceed. It is customary that when materials need to be purchased, a contractor asks for a deposit from the homeowner to cover their out-of-pocket material costs. Your deductible, depending on the amount, may serve that purpose.

 

        Documentation

 

To receive reimbursement for the items you purchased to replace what you lost, save and make copies of all your receipts. Verify whether you are covered for replacement cost, or if you are covered for actual cash value. (Meaning items are depreciated).  Save and make copies of all the invoices for work done on your claim, along with copies of checks provided to pay for contracting work.

Remember that the insurance company will not be able to reimburse you for replaced items until after they have received the receipts.

 

Knowledge is Key

Understanding the claims process enables you to have a better outcome in the event that you have to file a claim. If you are unhappy with how things are being handled, discuss your concerns with your agent. They should be able to guide you in the right direction.

If you are pleased with the way your claim was taken care of and pleased with the results, let your insurance agent know you are happy with their work on your behalf.  Feedback, positive and negative, is always appreciated. It lets an insurance agency knows what they are doing right and what they are doing wrong.

At the Crilly Insurance Agency, our customers come first. If you have questions about homeowner’s insurance give us a call at 410-571-1771.