Best Practices for Handling Property Insurance ClaimsSubmitted by Bernhardt Wealth Management on March 4th, 2019
The recent devastation in the wake of Hurricane Harvey on the Texas Gulf Coast, the horrendous wildfires in northern California, and the disastrous aftermath of Superstorm Sandy, along with other recent natural disasters, have focused public attention on both the massive scale of loss and the all-too-frequent inadequacy of both government and private-sector response. It’s heartbreaking to read about people who have lost everything who are also facing what seems to be unfair foot-dragging by government and insurance industry bureaucracies.
If some climate scientists are correct, these types of catastrophic occurrences may become more frequent. But even if they aren’t there will always be losses of personal property: hail and wind damage, tree limbs falling on houses, floods, earthquakes … and the list goes on.
What can you do to maximize your chances of getting a settlement from your casualty insurer that is both fair and prompt? According to the Consumer Federation of America, there are some specific steps you can take that will improve your odds in the unfortunate event that you experience a loss. In fact, as the organization’s Director of Insurance, Robert Hunter, points out, it is a fact that insurance companies are increasing deductibles and imposing policy limitations that will likely force property owners to use more of their own financial resources as they recover from a loss. That makes it even more important to take the right steps to see that your claim is processed efficiently, fairly, and in a timely manner.
- Make sure your premiums are paid in a timely way. Most homeowners making mortgage payments have their insurance premiums paid by the mortgage holder via an escrow account. Check your escrow reports to be sure that payments are being made regularly and on time.
- Take photos of your property—especially expensive items like artwork, pianos, heirloom furniture, and collectibles. If these are damaged, the images will help you establish the value of your claim.
- File your claim promptly. Most insurance claims organizations operate on a first-come, first-served basis. Put yourself as close as possible to the front of the line. Write down the claim number provided by your insurer; this will be the most efficient way to refer to your file as the claim is being processed.
- Keep all receipts for any expenditures related to your loss. If you had to buy a sheet of plywood to temporarily cover a broken glass door, or if you were forced to pay for a hotel stay because your home was not habitable, keep copies of all receipts.
- When the adjustor arrives, find out if they work directly for the insurance company or if they are from an independent adjusting firm. If the latter, ask if they have the authority to make decisions on your claim. If they are communicating with an in-house coordinator or adjuster at your insurer, get the name and contact information of the in-house person.
- Remember that you are not obligated to use the insurance company’s recommended repairer. You may wish to get competitive bids from other service providers, and this is your right. Also, beware of fly-by-night contractors who descend upon an area hit by a storm or other disaster in order to get work, but who are unlikely to be found if a problem with the repair develops weeks or months later. At minimum, all contractors should provide a bond and be listed with the Better Business Bureau.
- Keep careful records. You should keep a log of phone calls, correspondence—including emails—and visits by adjustors and others. If there is a dispute, the party with the better documentation usually wins.
- If there is a problem with your insurer that you cannot resolve, contact your state department of insurance. At a minimum, they will require an accounting of the matter from your insurer which may help you get to the bottom of the problem.
As with most matters involving finance, a little preparation now can save a lot of heartache later. Following the steps above can help you recover more quickly if you are the unfortunate victim of a natural disaster or other similar difficulty.