Here’s How Home Insurance Claims Work
Whether you are shopping for your first home insurance policy or you’ve had home insurance for years, you should have a thorough understanding of how your claims process works. If you are ever faced with a major losses or minor losses, you need to know who to contact, how to file a claim properly, and what you should expect from your insurance company.
Filing an Insurance Claim
The first thing you’re going to do when you experience a loss covered by your home insurance is to notify your insurance company. You want to let the insurance company know as soon as possible that loss has happened and you will be filing a claim.
Proving Your Loss
The next step will entail figuring out and then proving the financial cost of your loss. For example, if your house catches on fire you will have about 30 days to determine how much money you will need to repair the damage and replace covered items that were damaged during the fire.
Consider current replacement costs for personal property and current construction methods. Add up the cost of everything in your home that was damaged. If you’ve previously made a personal inventory list, now is the time to review it. If you don’t have an inventory list, try to locate photographs of the damaged area. You may also contact your credit card company or look at bank statements to recall the cost of items or for proof of purchase. Don’t forget to include items that were in closets or stored in the attic if it’s a whole home loss.
To help determine your loss, the insurance company will send an adjuster to your home. An adjustor comes to your property, inspects the damage, and offers you a certain amount of money to make repairs and replace lost items.
If the damage isn’t significant, you may want to forgo filing a claim and do the repairs yourself. Get a repair estimate before you call your insurance company. If the cost to repair the damage is less than your deductible, you will want to pay for the repairs yourself. Once you file a claim, you run the risk of your rates increasing. Plus, when the repairs cost less than your deductible, you’re saving money.
Personal Belongings Coverage
Your personal belongings may be covered by your home insurance policy, depending on the type of policy you have purchased. If you have purchased a replacement cost policy, you’ll be reimbursed the amount it would cost to buy new items. If you have a cash value policy, you’ll likely be reimbursed for the cost of the items, minus depreciation. Many insurance companies will require you to buy new items before they will reimburse for the full replacement cost.
If you decide you don’t want to replace some items, you may be paid cash value for the damaged items. This is the amount of the item minus depreciation.
It’s likely you’ll receive two payments from your insurance company. The first check is usually an advance against the settlement amount. This is not your final payment, but enough to help get repairs started.
Sometimes, once the adjuster has finished assessing the situation, you may be offered a check right away. You can choose to accept the settlement on-the-spot or you can choose to wait until you have more information. If you accept the immediate payment, you can reopen your claim and file for an additional amount if you find more damage or loss later. Most policies give you one year to file a claim from the date of the disaster. You’ll want to check with your insurance company and your state department of insurance for specific timelines.
If the structure of your property and your personal belongings are both damaged, you’ll receive two separate checks, one for each category of damaged property. If your home is financed, your bank may receive the check for your property and personal loss.
Premium Effects from Filing a Claim
If this is your first property claim, the chances of your premium rising are slim. If you’ve had multiple property claims, your premium will likely increase.
Some insurance companies also offer discounts. If you’re with a company that offers you a discount for not having a claim, you will likely lose the discount in the future. Check with your insurance agent to find out if any discounts will be affected by your claim.
If your premium does increase, there are some ways you can manage your insurance costs. You may consider adjusting your deductible and reviewing your coverage and making sure it still properly meets your needs. This can also be a great time to update your policy. If you have experienced life changes such as getting married or having a child, you need to update your policy.
We’re here for you when it’s time to submit a home insurance claim. If your current insurance won’t cover the damage, you’re looking for a new policy, or you simply want better customer service than you are currently receiving, let Obrella find the right match for you. Click here to compare home insurance providers.