photo credit: NASA
With Hurricane Sandy poised to make landfall within the next 24 hours, homeowners and insurers alike are taking steps to prepare for the impending storm. Many insurers are working to assemble rapid-response teams, and are preparing to dispatch claims specialists to hard-hit communities once the storm subsides.
Despite even the best attempts at hurricane preparedness, there are some things that are unfortunately out of anyone's control. If you are affected by hurricane damage, it is important for you to report your claim as soon as possible. TheProfessional Insurance Agents Association addresses the following frequently asked questions regarding storm-related claims, and offers a number oftips designed to help homeowners through the claims process:
- I've filed my claim. Now what?
After you've filed your insurance claim, you should take all steps required to prevent further damage to your property. This may include securing property, temporarily boarding the windows and roof, and drying out your carpets and personal items. Separate damaged items from undamaged items, and take photographs of any damage.Do NOT begin any permanent repairs, or dispose of any damaged property before a claims adjuster is able to review the damage. In the case of water-logged carpets and furniture, you may remove these items from the home, placing them outside under a tarp. If you must throw out damaged items such as food and other perishables, make sure to take photographs clearly depicting the damage. Otherwise the damage may not be covered.Be sure to retain all receipts for emergency repairs and anything that may constitute additional living expenses (ie. Water, ice, room rentals, etc.).
- How can I speed up the claims process?
Following a disaster such as a hurricane, priority is given to the most severe losses. Larger claims are typically settled in stages, not all at once. While an insurance claims adjuster will contact you as soon as possible, there are a few things you can while waiting to ensure that the process goes forward without a hitch:
Secure at least two repair estimates: Having a number of repair estimates for the adjuster to review will help with the settlement process.
Take photos of the damaged property: If you have before and after photos of the damage, both should be provided to the adjuster.
- What if I cannot live in my home because of the damage?
Most homeowners insurance policies include coverage for additional living costs. If you are unable to inhabit your home because storm damage has made it too dangerous to do so, most policies will reimburse for additional expenses incurred up to and beyond your normal living costs. For example, room rental fees will likely be reimbursed, since you are still making mortgage payments. Food costs, on the other hand, will only be covered above and beyond what you'd normally pay for food.It is essential that you keep all receipts for these costs in order for them to be considered a part of the loss. The expenses must be in line with your normal living costs, and must be a necessary and direct result of the loss.
Most policies restrict coverage for living expenses to a percentage of the coverage on the home itself. To learn how much of your living expenses will be covered, consult with your insurance representative.
- Is there coverage for trees that are down?
This depends on the type of damage incurred. Most standard dwelling and homeowners policies do not include coverage for trees that are damaged due to “weather perils” such as wind. However, if a tree falls and does damage to your home, fence, or other structure on your property, the damage would be covered.Separate windstorm coverage can be purchased as an added endorsement to your homeowners policy. Contact your insurance representative for more information.
- I lost power, and all of my food spoiled as a result. Is this covered?
A few residential policies provide very limited coverage ($250-$500) for food spoilage as a coverage enhancement. Otherwise, most policies do not cover food spoilage due to power outages.
- When the power was restored, a power surge damaged some of my electrical equipment. Is this covered?
While most homeowners insurance policies include coverage for “sudden and accidental damage from artificially generated electrical current “, this does not include damage to transistors, computer chips, and similar items. If you're unsure as to whether a certain item is covered, check your policy or contact your insurance representative for clarification.
- How long will it take for me to receive my check?
Once the insurance claims adjuster has visited the insured, they must complete and submit a series of detailed paperwork to the carrier for review. After everything has been checked, the carrier will then issue the claims draft to the insured. In cases where a large number of claims are submitted at the same time (such as with a hurricane, or other natural disaster), there can be a significant delay before the check is sent out. Oftentimes, your insurance representative can check with the adjuster to find out when the paperwork was submitted to the carrier, and may be able to obtain an estimate.
- I just received my claim check, and it isn't enough.
If the check is for a lower amount than expected, it's usually due to policy terms that require settlement on an actual-cash-value basis with replacement cost being paid at the time repairs or replacements are actually completed. Check with your insurance agent for details.
- What is the difference between actual cash value and replacement cost coverage?
If your homeowners policy indicates that settlement will be paid on a replace cost basis, then payment will be made for the actual cost to repair or replace at today's prices, according to the total amount of coverage that was purchased. If the adjustment basis is actual cash value, settlement will be made by determining the replacement cost at today's prices taking into consideration a reasonable amount for elements such as age or deprication. Some policies provide coverage for the home on a “guaranteed replacement cost” basis. In this situation, the carrier will pay whatever it costs to repair or rebuild the home, regardless of policy limits.
I was told I was “underinsured”. How is this possible?
There may have been certain changes that affected your policy coverage. The addition of a room, or an increase in the value of your home, for example, may affect your coverage. As a result, it is imperative to review your homeowners policy on a regular basis. Contact your insurance representative for details.
Being clear on the types and amount of coverage your policy allows before you file a claim can help to reduce the stress and guesswork involved in the insurance claims process. Contact your local insurance representative for assistance reviewing or updating your homeowners policy coverage.