Successfully Navigating Your Homeowners Insurance Claim | 1
SUCCESSFULLY NAVIGATING
YOUR HOMEOWNERS
INSURANCE CLAIM
Stuart Dorf, JD
Successfully Navigating Your Homeowners Insurance Claim | 2
Introduction
Aim for the Maximum Financial Recovery
First Steps to Limit Your Damages
What Your Homeowners Insurance Policy Covers
Avoid Common Mistakes & Delays
Actual Cash Value Negotiation Tips
Hidden Damage
Professional Help Options
CONTENTS
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Disclaimer: Property insurance policies vary from insurance company to insurance company
and property insurance laws vary in each state. This information is not intended to constitute
legal advice and should not be relied upon in lieu of consultation with appropriate legal
advisors reviewing your particular insurance policy in your own jurisdiction.
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INTRODUCTION
W
hen your home is damaged by a re, water, wind or other disastrous event,
navigating the insurance claim process to your most successful settlement
can be an overwhelming task. Eventually you will nd the right repair professionals,
and your restoration process will become the focus of a joint effort.
You also will work with your insurance company’s claims adjuster or other insurance
company employees assigned to your case. While independent and company
claims adjusters have the experience and obligation to make your claim experience
fair and efcient, always remember they work for the insurance company, and not
for you.
As an insurance company adjuster is inspecting your damage and investigating
your claim, his or her focus typically is on a narrow range of outcomes:
Documenting covered damages and estimating repair costs
Determining cause and origin, and assessing the claim for fraud
Minimizing the total claim settlement amount
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Aim for the
Maximum
Financial
Recovery
How well you recover from your property loss
depends on how successfully you settle your
homeowners insurance claim. It is important
to read and understand your homeowners
insurance policy, determine how best to
apply your coverages, and take all the steps
necessary to achieve your maximum fair
nancial recovery.
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Your homeowners insurance policy includes a
detailed process you will use to make a claim for your
property damages. The larger your loss, the more
complicated the process. Be sure you start and stay
organized, as you must be your own advocate at each
step of the claim process.
Make sure to:
• Photograph all damaged items
• Save all receipts
First Steps
to Limit Your
Damages
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The rst step in making a claim for your damages is to ensure no additional damage occurs
as a result of the original loss. The Neglect exclusion in your policy eliminates coverage for
damage caused by your failure to “... use all reasonable means to save and preserve property
from further damage …” It’s a no-excuses exclusion, as your policy pays the expense to
complete temporary emergency repairs. Your insurance company may deny coverage for
any damages you fail to mitigate.
Before you begin any emergency repairs, make certain your building is safe to enter. Check
with your utility companies and the re department to be sure your property is free from
electrical, re and other hazards. If your interior is water-soaked, be cautious with fans,
heaters and other electrical devices.
Mitigating Your Damages
Here are some additional recommendations for mitigating your damages:
Immediately hire a reputable contractor to complete temporary emergency repairs to
prevent additional damage. Be sure contract is limited to emergency work only.
Dry out oors, walls and water-soaked personal property.
Separate damaged from undamaged items to prevent further damage.
Mitigation can be very expensive. Limit mitigation to only work that is absolutely
needed until you get agreements from your insurance company that they will pay.
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Undamaged Property
Your homeowners insurance policy requires
you to protect any of your property not
damaged in your loss. Failure to take
appropriate protective measures can
compromise your property claim
settlement amount.
As a damaged building is vulnerable to
trespass, vandalism, and other illegal
activities, property left in place remains at
risk. Relocating your undamaged property
to storage or to your temporary housing may
be your most prudent option. Keep detailed
records and receipts for these costs, as your
policy will reimburse you for covered expenses.
Your homeowners insurance policy requires you to give your insurance company “prompt
notice” of your loss and a brief description of the damage. Your initial report may be to your
agent, your insurance company’s claims center, or a toll-free claim reporting number. It may
contain only basic information, but your contractual obligation is to notify your insurance
company “as soon as possible.”
Filing Your Claim
Damaged Property
Use extreme caution when handling your
damaged property, especially if it was
damaged by re or water. These types
of losses put property at risk of chemical
toxicity, mold, and bacterial contamination.
Typically it is best to hire a professional for
Debris Removal, which also is covered by
your homeowners insurance policy.
Preserving Your Property
Be sure no one removes anything — damaged or not — from the premises until cleared to do
so by your insurance company. Your policy allows your insurance company’s claims adjuster
the opportunity to examine your loss. A representative will alert you when that examination is
concluded, and you can get started with clean up. Be sure to photograph all damaged property
before it’s disposed of or removed.
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What Your
Homeowners
Insurance
Policy Covers
Interpreting the language in an insurance
contract can be challenging for a non-insurance
professional. It’s important to develop your
understanding of key policy provisions or have
access to an insurance professional who can
explain the legal terms and phrases you don’t
understand. Your insurance agent may not be your
best resource for an unbiased opinion.
The Declarations Page in your homeowners insurance policy summarizes all the
coverages you purchased. It outlines your policy period, coverage limits, named
insured, property descriptions and locations, lien holders and mortgagees, deductibles,
optional coverages, and endorsements. It also shows the coverage you have for your
premises, your personal property, and any other coveraged items.
The Additional Coverages and Coverage Extensions in your policy provide coverage for
claim-related expenses, such as Debris Removal and Fire Department Service Charges.
When you elect to pay an additional premium, your policy also can include optional
coverages for expensive jewelry, high-tech equipment, other structures, etc., which
otherwise may be excluded from your coverage.
Policy Provisions
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Avoid
Common
Claim
Mistakes
& Delays
When you are trying to recover from severe property damage, it’s easy to become frustrated with
the insurance claim process. Proceed with caution. The sense of being overwhelmed can lead to
common mistakes and delays.
Failure to Protect Your Property
No matter how chaotic things are, you must
arrange for emergency temporary repairs — or risk
having parts of your claim denied. For example, if
your contents are damaged because rain entered
a hole in the roof that was caused by a re, your
claim for damages to your contents may be denied
due to your failure to protect your property by
having roof tarped in a timely fashion.
Failure to Submit a Timely Proof
of Loss
Even if you can’t submit a perfectly executed Proof
of Loss, you still must get it in by the deadline set
forth in your policy. Your insurance carrier will send
you a Proof of Loss form. Complete it and triple-
check all the information, as mistakes here typically
are costly. Submit your Proof of Loss in accordance
with your insurance carrier’s procedures
and timeline, and include all supporting
documentation. Failure to le a timely Proof of Loss
causes many homeowners insurance claim delays
and in some cases denial.
Settling Because You are Tired of
the Process
Never accept a settlement offer because you are
frustrated, confused, or the claim process has worn
you down. Ask for help when you need it, from a
trusted friend, family member, or an experienced
property insurance claims professional, like a
licensed public insurance adjuster.
Receiving a Claim Denial
If your homeowners insurance claim is denied,
your ght isn’t necessarily over — though it will
intensify. Read the claim denial letter your insurance
carrier will send you. It will explain the reason they
denied your claim. Sometimes you can correct the
problems, but an ofcial homeowners insurance
claim denial is serious. This is denitely the time to
consult with a professional.
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$
Actual Cash Value
Negotiation Tips
Actual Cash Value (ACV) is the value of your personal property at the point it was damaged
in your loss. This is a number your insurance company’s claims adjuster will present to you
as a meticulously calculated value based on an accepted formula:
Replacement Cost Value (RCV) - Depreciation = ACV
An adjuster will tell you the number is derived from computer programs and property
life-expectancy tables that are continuously updated and used as the industry standard to
establish depreciation. Practice these words: bull puckey.
There is NO universal standard for calculating ACV. And it is an area where you could lose a
lot of money if you simply accept what is offered to you.No matter how an adjuster makes
a case for depreciation or ACV, it is just his or her opinion. It’s up to you to develop enough
information to establish a reasonable value for your property. Here are a few arguments to
consider.
If your property is rarely used, depreciation shouldn’t be typical.
When property is well cared for, it’s worth more.
Your property values are higher when you can establish a higher market value
via research, want ads, trade websites, expert opinions, even eBay.
Photos show your property’s excellent condition.
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Hidden Damage
When a covered loss causes hidden damages that may be overlooked, it can
cause more damage, increase your damages down the road, and trigger a dispute
with your insurance carrier. As it’s your duty to protect and preserve your property,
it’s in your best interests to hire a professional to detect and resolve hidden
damages as soon as possible.
Lead & Asbestos
These hidden substances can remain
undetected until a catastrophic loss
uncovers them. Lead can be found in
pipes and aging paint. Asbestos may be
located within walls, and in attics and
crawl spaces. Both can cause serious
injuries and may require specialized
abatement procedures before other
building repairs can begin.
Smoke & Soot
During a re, smoke and soot permeate
your home, and leave behind an acrid
odor and a dark residue. When they
soil furnishings, carpeting, ooring and
walls, it’s easy to recognize the need
for immediate cleaning and treatment.
If smoke and soot enter vents, ducts,
interior walls and crawl spaces, or
they settle into the inner-workings of
appliances and electronic devices, they
might be overlooked.
An environmental professional can
inspect areas of concern and determine
if soot and smoke-damaged property
can be salvaged or must be replaced. They
rely on a variety of techniques to eliminate
smoke, soot and odor, though not all items
can be cleaned effectively.
Mold
Mold grows in dark conditions, thrives
when moisture is available, and can be
difcult to detect. Left unabated, mold
spreads quickly, destroying fabric, wood,
drywall, and other organic materials.
Certain types of mold can cause serious
illnesses. Homeowners insurance
policies usually exclude coverage for
mold damage, or offer very low limits for
addressing it, adding urgency to the need
to uncover and address any mold issues
right away.
Electrical Wiring & Insulation
When damage is extensive, it’s easy to
miss problems that are hidden within your
walls. Damage in one location of
your building can affect the wiring in
other areas. Insulation can be damaged by
a re department’s efforts to extinguish
your re.
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Professional
Help Options
You need to know what’s going on
with your homeowners insurance
claim, but you also need to work
toward getting your life back to
normal. When your time and
energy are being stretched to the
limit by an extensive to-do list, you
might consider hiring a professional
to manage your homeowners
insurance claim.
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Make an Informed Choice
It’s important to have all the information you
need to make informed choices throughout
your homeowners insurance claim process.
The more you know about the insurance claim
process and the requirements placed on you,
the better positioned you will be to achieve a fair
and full settlement for your loss.
Public insurance adjusters work to:
• Review your policy to identify all available
coverage as well as potential concerns
• Work directly with your insurance
company so you can get your family
and work life back to a normal and stable
environment
• Identify damages to the building and
prepare a detailed repair estimate
• Inventory and value damaged personal
property
• Assist in recovering your additional living
expenses
• Provide valuable guidance for meeting all
policy requirements when making a claim
• Ensure you meet claim deadlines
• Assist you in completing a timely Sworn
Statement in Proof of Loss
• Work to resolve any coverage issues
• Negotiate the maximum settlement
possible under the terms of your
homeowner’s insurance policy
Public Insurance Adjuster
Licensed public insurance adjusters are
insurance claims professionals who are trained
in insurance coverage, building damage,
personal property damage, restoration issues,
and all other facets of homeowners insurance
claims. Public adjusters perform many of the
same tasks as an insurance company’s claims
adjuster, but everything a public insurance
adjuster does is exclusively on behalf of you,
the policyholder, to protect your interests in
your property damage insurance claim.
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