Top 10 Tips for Filing Property Claims
The insurance industry is built on responding to disasters and assisting people in recovering from them when they do occur. The recent hurricane losses in Texas, Florida, other southeastern states, and many Caribbean Islands serve as a stark reminder of the need for home owners and auto owners to file and subsequently to get their claims handled in the most effective way possible. The following are our top 10 tips for filing and handling property claims.
- File your claim promptly. If you have—or suspect that you have—property damage to your home or automobiles, notify your insurance agent as soon as possible with whatever details you can provide (even if you cannot access all your damaged property). In most cases, your agent will have a toll-free phone number for you to contact your insurance company directly. Make sure the adjuster understands that this call serves as notice of your claim. A follow-up e-mail confirming such notice is also in order. In some cases, a claim can be filed online. Keep copies of e-mail exchanges and make notes of any phone calls—who, where, when, what was discussed, and phone numbers.
- Perform temporary repairs if possible. Keeping in mind safety and health considerations, try to perform (or have hired) temporary repairs to your home such as boarding windows and covering roofs. If the house is uninhabitable, make sure the electricity, gas, and water are turned off. Note that temporary repairs are reimbursable as part of your insurance claim.
- Keep a claim log. Develop and maintain a written log of whom you talked to, his or her title, his/her phone number, the date, action items, and the gist of the discussion. This log is important if you later face problems or delays and need to substantiate your side of the story.
- Take pictures. Take as many photos and videos as you can to build up your inventory list. Include the brand, model, and serial numbers in the photos when possible. Any documentation regarding the date of purchase and approximate value should also be included in your itemized list. These records will also be helpful for review later when filing taxes and deducting casualty losses that are not reimbursed by your insurance company or are not covered by insurance.
- Don't forget your additional living expenses. If you have a windstorm loss, the standard homeowners policy provides additional living expenses, which are often 20 to 30 percent of your dwelling limit. Your insurance company may advance you money to pay for reasonable additional living expenses. Keep track of these expenses, including hotel rooms, extra transportation costs, clothing, personal toiletry items, and restaurant charges. In the event of a major disaster, note that the Federal Emergency Management Agency (FEMA) offers "critical needs assistance." This aid is a one-time $500 payment per eligible household for those with unmet critical and financial needs. Details are available on FEMA's Critical Needs Assistance program website.
- Check first before discarding property. Don't assume that you can immediately discard damaged items. You often need to show them to your adjuster. If your city requires you to remove them for safety purposes, take photographs of the items beforehand. Take two or three photos showing all sides and capturing any serial or model number affixed to the items plus the extent of the damage.
- Sign up for text alerts. Many insurance companies offer text alerts to keep you appraised on the status of your claim. Typically, insureds get messages when the claim is first reported, when the estimate is available, and when payments are made.
- Be prepared to negotiate. In some cases, your repair or replacement estimate may exceed your claim settlement offer. Don't automatically accept the first offer you receive from the adjuster. It may be wise to ask your contractor and adjuster to talk about the repair costs to come up with a solution. The same process applies to working with your auto body shop and auto adjuster concerning damage to your vehicle.
- Explore options if dissatisfaction arises. First, make sure you are providing all the information and documents your insurance company requests in a timely manner. Also, keep your claim log handy when calling to document the results of the call. If you have problems or unreasonable delays, ask to speak to a supervisor or manager. Another option to consider, prior to hiring an attorney, is contacting the appropriate state department of insurance (DOI) to file a formal complaint (this is free and often helpful). See the insurance complaint sections of your state DOI website for details. In many cases, you can file the complaint online.
- Find a reputable contractor. Consider the following tips when hiring contractors.
· Be wary of contractors who solicit business door-to-door or via cold calls. In addition, contractors should be avoided if they quote a price that will automatically go up the next day or week if the property owner does not accept it immediately.
· Avoid contractors who promise to handle all of the insurance issues for you and ask you to assign the insurance benefits directly to them.
· Request recommendations from friends, family members, and business associates for reputable contractors who have performed excellent work for them.
· Ask the contractor for a written estimate that includes any oral agreements he or she makes in this process. The estimate should contain a line-by-line breakdown of costs, including materials and labor. In addition, there should not be a charge for an estimate. Avoid dealing with contractors who attempt to charge for estimates.
· Obtain at least three estimates along with the names and phone numbers of two former customers of the contractor. The property owner should contact these customers and ask about the work performed.
· Verify that the contractor is licensed, bonded, and properly insured. Obtain certificates of insurance for workers compensation and general liability policies from the contractor.
· Contact the Better Business Bureau (BBB) to see if complaints have been filed against the contractor. This step can be performed via the BBB's website.
· Avoid contractors who ask for payment for the entire job before the work begins. The standard practice is to pay 25–33 percent of the job up front. After the initial payment, only pay for work after it is completed. The final payment should not be made until you are satisfied with all of the work performed.
· For major work, get an experienced attorney to review the construction contract.
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International Risk Management Institute, Inc.