Disaster claims, such as those made after a tornado or hurricane, are the most stressful types of claims. You are under extreme personal stress due to your loss, and the insurance company can be overwhelmed by many other people experiencing similar losses. Therefore, the service may take longer.

Knowing what to do in the event of a major disaster will make a big difference in how quickly you receive your claims check and get back to your normal lifestyle. Your policy has several provisions that are set out in an appendix that is usually attached to the declaration page of the insurance policy. It can be confusing, so take the time to digest it well. Good and timely communication with the insurance company will help make the claims process as quick as possible.

Call the insurance company

Never hold on calling the insurance company. You need to know what you will be compensated for, what deductible to expect, and whether the cause is a covered risk.

Your insurance policy may contain a clause whereby you agree to notify the insurer whenever there is a material change in risk or liability. Potential damage to your home or other people’s property fits this description. Breach of the insurance contract exposes you to the risk of canceling your insurance. It’s the last thing you want to do.

Your insurance company also has the experience to help you. A claim may seem simple enough to you, but the insurance company has the experience of an entire industry to assess the real implications of the damage.

What to do as soon as the damage occurs to your home

At the time of the claim, when the loss occurs, things can be chaotic. While it’s important to contact the insurance company right away, you have other responsibilities as well. They are:

• Avoid more losses.
• Collect all the items you can.
• Photograph and record the damage as soon as possible to provide additional proof of loss.
• Don’t throw anything away. Your insurance company has the right to see the items if you plan to receive compensation.

Say that water enters your house through the roof. Avoid further losses by moving objects out of the way of the water. If the water has damaged something, remove it, but do not throw it away. Prevent more casualties by following these steps and avoiding greater damage by moving items out of the way.

However, if the situation is dangerous – a tree crashes against your roof and you see that the tree could cause the roof to collapse – it is not reasonable to put your life in danger to save a table and trees.

Tips for getting refunds

• If you incur immediate expenses to protect your property, save all receipts and document everything if you want to be compensated.
• Emergency expenses can be reimbursed, but non-urgent jobs and unapproved repairs may not be.
• The insurance contract may specify that you cannot work without the approval of the insurance company. So be very careful to get this approval before you commit to hiring a contractor.

Will the insurance company pay for relocation and housing?

If the cause of the loss is covered by your insurance and your home is rendered uninhabitable by the loss, the Additional Living Expenses (ALE) coverage included in your homeowner’s policy will cover temporary living expenses that exceed the living expenses in those normally incurred.

Even if you don’t move out of your home, you could still have additional living expenses. Coverage generally includes:

• Eat out
• Temporary installations of communication lines
• Rental
• Additional shipping cost or anything that costs you reasonably more money as a result of the claim.

This is a very delicate blanket so make sure you understand how it will be paid for. Ask your representative what your FTA limit is and get approval from the insurance adjuster for long-term accommodations. Make sure you understand how much you will be paid. They will only pay the actual costs of the loss. Expect to pay the money first and wait for the refund.

Why is the insurance adjuster so important?

Once you call the insurance company, they will assign an adjuster to your case and send you a proof of loss form for you to complete.

The insurance adjuster is the person responsible for working with you to resolve your claim. The insurance expert is a professional trained in claims settlement and damage assessment. They will report what they see to the insurance company, determine what work needs to be done to repair your home, and review your list of proof of loss.

Some things the expert should review with you:

• Additional allowance for living expenses
• Deductible or if you are eligible for a deductible exemption
• Waste disposal
• Item storage (if needed)
• Questions about the proof-of-loss inventory list
• Describe the stages of the claim and what to expect.
• Your expert will examine the actual loss and ultimately, after investigation, decide the cause and what is covered.

Concerns about rebuilding, bylaws, and contractors

Rebuilding costs after a claim can be difficult to manage. Here are two very important ones to keep in mind:

State and reconstruction costs

Make sure you know the costs that affect how much you will pay to rebuild your property that insurance won’t cover. If, for example, a city statute requires your home to be rebuilt under the new code and your insurance doesn’t cover settlements, then You could end up stuck with part of the bill.

Contractor costs must be approved by your insurance

You will likely get multiple estimates from contractors when trying to repair or rebuild your home. You should ask your insurance company to approve the costs before continuing the work or hiring a contractor.

What determines how much money you will earn?

Your claims settlement basis will clearly describe how much money you should receive on a claim based on the policy choice you made when choosing your insurance.

Claims settlement is generally based on one of the following three possible options:

• Actual Cash Surrender Value (ACV)
• Replacement cost
• Replacement cost with an opt-out option

Actual cash surrender value

It gives a depreciated value in case of loss of articles or materials under construction. This is not a very good option to select when purchasing your insurance because it will never allow you to replace what you have lost. A disaster claim is the worst time to have a policy with this type of coverage.

Replacement cost

It allows the replacement of items that are not obsolete or impossible to replace. The terms and conditions of this type of coverage require that you replace the item before obtaining a full settlement. This means that you can receive half the amount you need to replace the item and only get the rest after providing proof that it has been replaced. If you choose not to replace, you get the actual cash value.

The replacement cost of rebuilding your home is based on the insured value. In the case of construction insurance, if you have insured the value of your home, some insurance companies also offer extended replacement cost coverage if the actual cost of the reconstruction exceeds the amount of the insured value of the building.

Replacement cost with an opt-out option is a premium insurance option and is generally only available for high-value homes or specialty policies. The withdrawal option offers a lot of flexibility, as it is one of the only payment types that allow full replacement of the cash value, with no obligation to replace it, and a check-in hand.

How does the claims payment process work?

Once you have satisfied all the requirements and demands of the insurance company and the adjuster has compiled all the details of the loss, you can issue a final settlement of the claims.

A complaint is resolved faster when there is cooperation and good communication with all parties.

You will need to sign the proof of loss, which will normally show the fees paid.
Your signature on this document allows the final release of the final payment of the claims and confirms to the insurance company that you have accepted your payment. Once signed, the check is usually issued. You should ask your representative at this point how long your normal delay is and what to expect.

Get your money’s worth for your insurance claim

The best way to get your money’s worth on a claim and receive the maximum amount payable is to fully understand the claim process and what you are legitimately entitled to under your insurance contract.

Do you need flood insurance?

You will need flood insurance if you live in a designated flood area. But floods can also occur in inland areas and away from major rivers. Consider purchasing a flood insurance policy if your home could be flooded due to snowmelt, an overflowing stream or pond, or water flowing down a steep hill.

Flood insurance is available to both renters and homeowners, but a special policy is required because flood insurance, like earthquake insurance, is not part of the standard coverage for homeowners. Flood policies are provided by the federal government and some private insurers.

If you think you need flood insurance, don’t wait for a flood season warning in the Evening News to buy a policy – there’s a 30-day waiting period before coverage takes effect.