As our neighbors continue to work tirelessly to rebuild after Hurricane Michael, it’s easy to forget the importance of reporting and handling homeowners’ insurance claims. For many of us, our homes are our most financially significant purchase. It is critical that you know your insurance policy and the claims process.
There are several staged of the claims process, and each stage is equally important. Most of us know to take photos, video and make notes of damage. It is equally critical to inventory all damaged and destroyed personal property and collect all bills, receipts and invoices you have to prove losses. Photos of an empty living room may illustrate damages, but it won’t show your sofa that has been blown away. Prior photos of your home will aid in valuation.
After reporting a claim, the insurance adjuster is likely to ask what you have done to mitigate damages. All policies require that the insureds do what they can to prevent damage from becoming worse. Depending on the extent of the damage and your ability to gain access to roads and supplies, you may not be able to do anything significant, but reasonable efforts to curb additional damage should be undertaken.
Some of the most complex aspects of the claims process involve wind versus flood damage, mold exclusions, and the valuation of personal property. If you did not purchase flood insurance, and you have damage from water intrusion, there will be an issue as to causation: wind or flood? Was the roof ripped off, resulting in water intrusion, or did water from a storm surge or neighborhood flooding cause the damage? Similar causation issues arise with mold. Some insurance companies will attempt to disclaim all mold-related damage if your policy has an exclusion, or seek to cap recovery. But remember that mold is a byproduct of the water intrusion caused by wind-broken windows, removed roofs, and/or trees breaching the home.
Most homeowners are unaware whether their policy allows for compensation of personal property at market value or full replacement cost. This distinction can mean the difference between recovering $2,000.00 for that destroyed sofa or $300.00.
Make sure you are protecting yourself and your property by staying involved and informed.
Given the amount of money at stake and the insurance company’s desire to resolve claims in its favor, having the ability to rely upon a professional - someone who will act on your behalf - will probably increase your claim’s value. Importantly, you should not bind yourself in any way that limits your recovery under the policy without first consulting a professional.