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The Homeowner’s Insurance Claims Process: An Explanation

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For most people, their knowledge of the home insurance claims process largely comes from experience. If you’ve already filed a claim, it’s not too late to learn some basic information that could save you thousands of dollars later. It’s important to know how the claims process will work so that you can maximize your settlement and get your family back on track.

The Initial Claim

After a disaster, it’s important to get a claims adjuster to your home as quickly as possible. They will do their assessment and may, in fact, offer a check on the spot. During their evaluation, complete your own documentation. Write down their reasons for including some damage and not others. This information might become important later if you decide to dispute the initial claim.

Claims Evaluation

In evaluating a homeowner’s insurance claim, adjusters will determine whether or not the insurance company is liable for damages. Though it may seem like a straightforward process, there can be a few shocking surprises that frustrate homeowners. For example, victims of Hurricane Sandy often had to argue with adjusters over the nature of flooding. If water floods a home through pipes or toilets, it’s covered by homeowner’s insurance. If it’s considered flooding from a natural source, i.e. excessive rainwater, then it’s not covered. This is why homeowner’s need to document damage as quickly as possible and keep their own records of the claims evaluation.

Repairs and Further Adjustment

A really important fact for people to remember: the first check written by your homeowner’s insurance company is just that, the first check. A claims adjuster can offer homeowner’s a check right away. However, it’s also possible to “reopen” a claim in order to adjust for additional damage that tends to creep up during repairs. You might also want to dispute the claim, in which case, that first check will be deducted from a future, potentially larger settlement.

If you’re happy with the size of your settlement, it might be time to move forward with hiring a contractor. For most homeowners, this process will involve a mortgage company that might seek to approve contractors before repairs can begin. In many instances, checks for repairs will be made to both the mortgage company and the homeowner. A few strict mortgage companies might even seek to approve any repairs before payment to a contractor can be made.

How to Get By After a Disaster Has Destroyed Your Home

It can take time for insurance claims to pay out. The nature of your insurance policy will be critical after significant damage makes your home uninhabitable. Some policies will include provisions for living expenses while others won’t. The language can be included in your contract though it typically includes a higher premium.

Sources

  • Secrets of Homeowner’s Insurance Claims
  • The Home Insurance Settlements and Claims Process Guide