Natural Disasters: Making Effective Home Insurance Claims for Recovery

by Amy Lillard

(1/2/2013) The widespread devastation and damage caused by "Superstorm" Sandy on the East Coast has resulted in many homeowners trying to navigate the process of insurance claims. And it's made many homeowners think about their own response if a natural disaster hit them.

After a disaster strikes, homeowners must file insurance claims to replace and rebuild their homes. The process can seem challenging and stressful. But with some advance knowledge and understanding, homeowners can complete the task and may achieve a better reimbursement.

Assess Damage

The first step is getting an idea of the disaster's effect. First take note of emergencies. Is power out, and are power lines down? Are there gas leaks? Standing water? How about structural damage to the framework, windows, entrances and exits and roof? This type of damage may indicate that you'll need to find temporary housing until the home can be repaired and/or replaced. It may also require the assistance of emergency services from public utilities or first responders.

Beyond the big damage, also take a look at the "smaller" things. Is there is a large amount of debris in the home? How was your furniture, machines and cars affected? And what about your other personal belongings, like clothes, electronics, and collectibles?

Document

While it sounds simple, taking photographs or video of all the damage will put you in a better position. The insurance company will want detailed documentation of the damage in order for an accurate reimbursement.

At the same time, start a system for documenting every step and contact you make during the recovery process. Every time you talk to the insurance company, write down names and contact information, as well as the topic of conversation. Every expense you make for repairs, keep receipts. This can help you keep details straight, and keep you on track for a good claim.

Call Your Insurer

With a better picture of the damage in question, notify your insurance company as soon as possible. If your home needs emergency repairs, your company may be able to provide you a list of approved companies to help, which will bill the insurer directly or will be reimbursed without question. In addition, some may advance you a check directly after the disaster to cover temporary living expenses.

In addition, contacting your company right away will get the actual claims process started. The company may designate an individual to come to your home to inspect the damage. This "claims adjuster" is an expert in assessing damage. Plan on being present for these inspections, as you can help defuse questions and issues.

Finally, contacting your insurer can help you in the process of understanding what is in your policy and what specific coverage you have for recovery. Know what disasters are covered, and know what you will be responsible for right away in terms of deductible and other costs.

Act When Necessary

Sometimes it may take awhile for an adjustor to reach your home, especially in widespread events like Sandy or Katrina. But sometimes waiting before doing anything to fix the damage in your home may exacerbate it. And that can cause big problems down the road. Letting standing water from a flood stay for several days, for example, can cause mold to develop, and an insurance company will cite negligence as a reason to deny the claim.

Homeowners should feel empowered to start clean up in order to prevent further damage. In case of major damage, start thinking about contractors for temporary repairs. IN cases of simple debris or wet furnishings, clean up as much as possible. But document everything you do, and let your insurance company know that you're doing it.

Paperwork

Filing a claim will involve paperwork, and lots of it. Your insurance company will advise you on the specific paperwork to be completed and collected, and in some cases this can be done electronically. Your claim will be divided into two parts Ã¢â¬" one for the house or property itself, and one for the personal belongings within it.

For the home, you'll need to get an official inspection on the state of structural integrity and damage. In some cases, this may be provided for by the insurance company. To determine how much will be needed for repair and or rebuilding, you'll need to get written bids from reliable and licensed contractors. This will need to detail what materials will be used and their cost.

For the personal property, plan on providing an inventory of your items. Ideally, you have prepared this before disaster occurs, but if not do your best to construct it from memory. For most, especially the bigger-ticket items, it's helpful to note purchase price and current value. Don't throw out any damaged property before your adjustor has a chance to see it and assess value.

Don't Feel Pressured

Don't simply submit your claim and hope for the best. Insurers have teams of experts that work on reimbursement values, and their priority is keeping costs down. That means the judgment they offer may be lower than you expect and deserve. So don't feel pressured to agree to your insurance company's settlement unless you agree that it is fair.

The key to disputing a claim offer effectively is to demonstrate the methods you used to arrive at your suggested number. This is where your extensive documentation will come in handy. Be professional and patient, and your arguments will be taken more seriously.

Get Help

If you're not getting the response you'd like from a claim negotiation, or need support or guidance in seeking a better settlement, enlist an expert. Seek second or third opinions on repair costs from independent contractors to bolster to your argument for a bigger payout, and consider hiring a public insurance adjustor. These individuals are experts on the claims process and what methods work in building an effective case. Be aware these services usually cost 10 percent of the total settlement amount.

Another avenue to explore, especially if your claim arguments hit a wall or are delayed extensively, is to consult an attorney. Initial consultations are free, and can provide you a clearer picture of your situation and options.

Plan Ahead

When you agree upon a claim figure, the payout will arrive in multiple payments. Personal property reimbursements and living expenses will come directly to you, while payments for the structure may be payable to you, your mortgage company, and/or an escrow account to provide for repairs as they occur.

Recovery takes time. When you're feeling reestablished, it's time to plan ahead. The sad truth is that natural disasters can happen anytime, and can hit again. So be prepared and learn from the claim experience. Conduct a thorough home inventory, and reevaluate your insurance to cover your investments.