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Hurricanes Maria, Irma, and Harvey are a good reminder that when a natural disaster hits your home, you need to take the proper steps to get the most out of your insurance coverage.
The first step: Get in touch with your insurer or the agent who sold you the policy. The insurance company will then assign an adjuster to document the damage you’ve suffered and submit it for review by your insurer.
If you have the more common “replacement cost” coverage, you could be entitled to new items to replace what you lost. If you have “actual cash value” coverage, you’ll get enough money to replace what was destroyed, lost, or stolen, minus depreciation.
There’s a risk that you could get less than what's due to you if you don’t back up your claim with evidence, don’t ask the right questions, don’t act promptly, or don’t make sure the adjuster has accounted for all your losses. So follow these tips to make sure you get everything to which you’re entitled, as quickly as possible:
Be Vigilant With the Adjuster
Document all losses. Take as many photos as possible of the damage. List as many items as possible that you can see or recall that have been damaged or lost. Include what you paid for items, including any receipts you can find. “The more of that you can do before the adjuster arrives, the faster the process will go,” says Jeanne Salvatore, a spokeswoman for the Insurance Information Institute, which represents the property and casualty insurance industry. “Be as organized as possible.”
Verify the adjuster’s identity. Ask the insurance company for the adjuster’s name before he or she arrives. As with anyone entering your home, make sure that the person shows identification. “You want to make sure the adjuster isn’t a fraudster,” Salvatore notes.
Show the adjuster all the damage. Make sure that you are home when the adjuster visits and make sure he or she sees all the loss and damage. Get the adjuster’s e-mail address and communicate using email so that you have backup of all your communications.
Document all contact with the insurance company. Document every contact with your insurance company, including times, dates, and what was discussed. Note when an adjuster visits as well as any missed appointments, unreturned phone calls, or rude behavior. You might need the notes if you have to sue.
Make copies of all documents. Copy everything you give the adjuster, such as a list of property lost or damaged. If the adjuster advises you to start repairs, get that permission in writing, advises Steve Mostyn, an attorney in Houston who represents consumers against insurers. Mostyn observes that in an emergency situation, the first adjuster may be replaced by a new one during the claims process. “There’s often not a good handoff of information when the next adjuster comes in.”
Get additional estimates if necessary. If you have custom work in your house, insist on an outside estimate by an appropriate contractor. And don’t accept lower-quality replacements.
Consider Hiring a Public Adjuster
If you have a very large claim, a public adjuster might save you hassles and help you get a higher payment. A public adjuster is an independent adjuster who works on your behalf and represents you on the claim. But be aware of fees; in some states these are capped, typically at 10 to 12 percent of the insurance payout. In other states there are no caps. In some states—Louisiana, for instance—adjusters must charge a flat fee.
To find a public adjuster, check the National Association of Public Insurance Adjusters. When you make contact, insist on references from past clients, several years of experience as a public adjuster, and a state license where required. In the five states where no licensing is required—Alabama, Alaska, Arkansas, South Dakota, and Wisconsin—contact an attorney who works with catastrophe victims to help you locate a reputable adjuster, says Diane Swerling, vice president at Swerling Milton Winnick Public Insurance Adjusters in Wellesley, Mass.
Standard flood policies are capped at $250,000 for the dwelling and $100,000 for contents. They’re strict in terms of what they cover. Most don’t cover personal items stored in a basement. (Some private insurers will sell policies with higher limits.) Swerling says that it could make sense for a flood victim to hire a public adjuster, even with their coverage limitations. “They are very difficult losses to adjust,” she says.
Deal With Roadblocks Head-On
The adjuster may hand you a check on the spot to cover immediate costs like replacement of clothes and medicines. However, it could take weeks to get a full estimate of your damages and a final check. So keep on top of where your claim is in the pipeline. Once the adjuster finishes the report, review it for mistakes before signing.
For more on what’s involved in the flood claims process—including what’s covered and what’s not—check the Flood Insurance Claims Handbook published by the National Flood Insurance Program (NFIP), part of the Federal Emergency Management Agency.
FEMA’s guideline for delivering an estimate of damage to the flood policyholder is no longer than 45 days, notes Maureen Westling, vice president of claims at Aon National Flood Services, a flood-insurance-policies provider based in Kalispell, Mont. But once work begins on your home, you’re entitled to add to your claim if you or your contractor discovers more damage or loss. “There’s nothing to prevent you from doing that even after the claim is closed,” Westling says. “You’ve signed that statement of loss to say, ‘At this time, to the best of my knowledge, this is correct.’ That doesn’t mean it can’t change.”
What happens if your insurer maintains that your policy doesn't cover the damages or if the offer is too low? Ask the carrier’s representative to point out the exclusion or limit in your policy in writing.
If you feel you’ve been misled by the policy wording, contact a local plaintiff’s attorney who specializes in insurance law. The Consumer Federation of America notes that courts have consistently ruled in favor of policyholders on policy ambiguities. File a complaint with your state’s department of insurance.
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