Understanding the Home Insurance Claims Process
You pay for home insurance to help you in the event you have a claim. Whether you have a total disaster and lose your home in a fire or you have storm damage and need a new roof, your home insurance may be able to help lighten the financial burden.
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First, you have to know how to file a home insurance claim, though.
Contact Your Insurance Agent
The first step is to contact your insurance agent as soon as possible. Each insurance company has their own deadline regarding how long you can wait to file a claim. Why wait, though? The sooner that you file the claim, the sooner you will get reimbursed for the cost of the repairs.
The only exception to this rule is if there was anything illegal that creates the claim. For example, if your house was robbed and vandalized, you would first call the police. The insurance company will need a copy of the police report in order to process your claim.
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Talk With the Claims Adjuster
After you file the claim with your insurance company, they will assign you a claims adjuster. This is the person ‘in charge’ of your claim. The adjuster will come out to your home and assess the damages. He will also determine the cost of the damages and how much you should be reimbursed.
The more proof of the damage and/or the value of the items you are claiming, the better your chances of getting approval. This is especially important in the case of theft or vandalism. If you have a home inventory complete with pictures of the items and receipts, you’ll have a better chance of receiving proper value for the items you lost or that were damaged.
If you have property damage, make sure that you document as many details of the damage as possible. Make sure you write down the reason for the damage. For example, if a storm damaged your roof beyond repair, document the date of the storm. The adjuster will go back and determine if there truly was a bad enough storm on that date to cause the damage
The adjuster’s job is to make sure that the damage that occurred wasn’t because of your own wrongdoing. They need actual proof that it was due to a covered peril before they can approve payment on the claim.
Typically, with a home insurance claim, you’ll receive several payments. The initial payment is to help you get started with the repairs. This is usually just a portion of the total settlement. But make sure you understand what the total settlement is from the adjuster.
In some cases, the adjuster may offer an on-the-spot settlement. The adjuster’s intent is to close the claim with this settlement. Don’t worry, though, if you accept it and find more damage later, you can contact the insurance company again and re-open the claim.
The Types of Payments
- You may receive multiple checks depending on the type of damage that you have. Insurance companies write separate checks for:
- Dwelling damage – This is damage to the structure of your home
- Personal belongings – If you lost personal belongings in the damage, you’ll get a separate check
- Additional Cost of Living – If you are displaced from your home, you’ll receive a separate check for the cost of living elsewhere according to your policy
Who Receives the Payment?
If you have a mortgage on your home, your name won’t be the only one on the checks from the insurance company. You’ll see that your mortgage company’s name is on there too. This is to make sure that you use the funds to repair your home. The mortgage company has a vested interest in the property. If you don’t repair the home, you put the lender’s collateral at risk – this is what they try to avoid.
Before you choose a contractor, make sure you ask how they would like to receive payment. Some contractors require payment directly from the insurance company. In this case, the checks would be made out directly to the contractor and not to you. This helps the contractor know that he will get paid for the work. Before you agree to this, though, make sure you read the fine print. You need to know exactly how much money is going to the contractor and how much (if any) is coming to you.
Replacing Personal Belongings
If you don’t have a total loss, you may have to provide receipt proof of the purchase for the replacement of your personal belongings. This will help you get full replacement value for the items you lost. Even if the insurance company gives you a small payment upfront, they will make up the difference, according to your policy limits, if you have proof of the cost of the replacement items.
Home insurance claims take time and a lot of legwork. Make sure that you stay in close contact with your insurance agent so that you take all of the necessary steps to process your claim. Always ask questions and read the fine print before agreeing to anything to make sure that you know exactly what to expect.
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