Goodnight, Irene. Good Morning, Insurance Agent

SmartMoney

The process for filing insurance claims isn't getting any easier -- or cheaper. How to maximize your chances.

Now that Hurricane Irene has done its worst, thousands of homeowners are expected to begin filing billions of dollars in insurance claims -- a process that's lately become more complicated and costly.

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In recent years, insurance companies have started to pass more of the financial burdens of natural disasters to policyholders. Many insurers now require mandatory hurricane deductibles in coastal areas; some have raised those deductibles from 1% or 2% to as high as 5%, raising out-of-pocket costs for policyholders. Meanwhile, many homeowners are discovering that even with these deductibles, their policies may not cover all the damage caused by a hurricane or tropical storm. "Families will have to dig deeper into their pockets," says J. Robert Hunter, director of insurance for the Consumer Federation of America.

These developments can make an already difficult situation tougher. Following Hurricane Katrina, a far more devastating storm than Irene, many homeowners complained about waiting months for their claims to be processed, according to the non-profit group Americans for Insurance Reform. Slowing down the process was disagreement over what was wind damage and what was water damage, says Susan Voss, vice-president of the National Association of Insurance Commissioners. Standard homeowners insurance typically covers damage from wind but not water; in the aftermath of a hurricane, it can be hard to tell which is which.

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Insurance companies say they've been streamlining their processes, redeploying staff to crisis areas and upgrading their customer-service technology to speed up the claims process. David Hilgen, a spokesman for Chubb Insurance, in Warren, N.J., says most claims should take "a matter of weeks," and says simpler claims could be paid "on the spot." State Farm says it has 1,700 agents and customer-service reps on standby to help with claims from Irene if necessary. Travelers Insurance has set up mobile claims offices along the East Coast to speed up the process, according to company spokesman.

To be fair, some of the complications arise from people not fully understanding the limits of their coverage in particular, the distinction insurers draw between wind and water damage. For instance, if strong winds tear through the roof or wall of a house and leads to flooding, consumers with homeowners insurance only (and not additional flood insurance) will have to argue that it was wind -- not subsequent flooding-- that led to the damage. Another common mistake: If consumers have not reported home improvements to their insurance company they may also be underinsured.

Renters are also at risk. The building owner, or his insurance company, is on the hook for damage to an apartment building or condo, but tenants who don't have renters insurance are not covered if there is damage to their belongings, says Voss.

For those who have suffered damage, there are ways to maximize your chances of a successful claim. First, experts recommend, file early and document everything. Keep a list of all the valuables that have been damaged or ruined and take plenty of photographs; this will help if there is dispute with the insurance company. Hunter also recommends keeping receipts for emergency repairs and hotel expenses if your house is uninhabitable. "Obtain a repair estimate from a trusted local contractor to use as a guide in talking with the adjuster," he says.

If the claim is denied or seems unjustly low, don't take "no" as the final answer. "Demand that the company identify the language in your homeowner's policy that served as the basis for denying your claim or offering so little," Hunter says, adding that those reasons should be in plain language understandable to the consumer. If you feel you're being treated unfairly, contact your state regulator, more senior staff at the insurance company or -- failing that -- a lawyer, says Voss.

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