6% of insured homes in the US had a claim in 2017.
It’s nobody’s idea of a good time to make a home insurance claim, but you’ll be glad your insurance is there if you need it.
Is it time for you to file your first claim and you’re wondering what the home insurance claim process is like?
Let’s take a look at 7 frequently asked questions about how to file a home insurance claim.
1. What Should I Do First?
It is completely natural to feel overwhelmed if your home has been damaged or destroyed. Not only have you likely lost many items that were important to you, but the repair and recovery process can be daunting, to say the least.
If you’ve never made a large home insurance claim before, it’s best to understand the process as a business negotiation.
Take a look at your policy documents, starting with your policy’s “declaration page.” It will show you the way in which your policy is divided into coverage categories. Here you’ll also find “Endorsements” or extras.
If you don’t have a copy of your policy, ask for a written copy from your insurer. It’s worth taking the time to try and understand what’s in the document. If you leave it up to your adjuster to calculate your losses, it’s possible you’ll be leaving money on the table.
2. How Long Should I Expect it to Take for My Insurance Claim to Be Fully Settled?
The timeline for settling a home insurance claim can vary depending on the amount of damage and where you live. It can take anywhere from a few weeks to several months. To replace/repair/rebuild a home and possessions after a large loss, most people find it can take anywhere from 18 months to two years.
State laws vary from state to state in terms of how quickly an insurance company must make payments. Some states require the payments to be made in a “reasonable” amount of time. Others require that they acknowledge receipt of your claim within a certain number of days, as well as accept or deny it.
3. How Are Homeowner’s Insurance Claims Paid?
When you file a home insurance claim, usually an adjuster will inspect the damage and then offer you a certain amount of money for the repairs. This amount will be based on the limits and terms of your policy.
Usually, the first check you receive from your insurance company will be an advance rather than the final settlement. Sometimes you’ll be offered an on-the-spot settlement, in which case you can accept the check right then and there. If you find other damage later you can reopen the claim, usually within a year from the initial claim.
If you have a mortgage on your home, it’s possible that your mortgage lender will also be involved in the payment process. Another way that claims are paid is by paying the contractor who is fixing your home directly.
If you’re the recipient of an underpaid or denied property claim, all is not lost. After doing some research and building your case, you can file an appeal.
4. What Are the Most Common Issues People Have With Post-Disaster Insurance?
Unfortunately, there are a lot of things that can go wrong with insurance coverage after a disaster.
The most common problems that people face after a disaster with their insurance are:
- Experiencing lengthy delays
- Being underinsured (which means not having enough coverage)
- Uncertainty about what is covered and what isn’t
- Being assigned a difficult, unpleasant, or hard to work with adjuster
- Being offered estimates and settlements that are too low
- Opinions differ about values and scopes of losses
While you might not be able to avoid these most common problems, you can at least prepare yourself for their possibility. Many insurance claims go smoothly and are dealt with quickly. It’s good to know ahead of time, though, that the possibility is there for things to go wrong.
6. What is a Deductible?
A deductible is the amount of money you’ll have to pay out of pocket in the event of a covered loss. This means that if you have a $5,000 deductible and there is $11,000 covered loss, you’ll pay $5,000 and the insurance will pay $6,000.
It’s important to understand that a deductible applies to each claim separately. That means that if you make more than one claim within a policy period, you’ll have to pay the deductible for each individual claim.
7. What Happens if You Don’t Have Homeowners Insurance?
If you purchased your home using a mortgage, you most likely have homeowner’s insurance. This is because most mortgage lenders won’t give you a loan without insurance to protect their investment in your property.
If you’ve paid off your mortgage, though, or purchased the home in cash, having home owner’s insurance is entirely up to you.
While not having insurance will save you some money every year, if anything bad ever happens to your home you don’t have any safety net. Damage from a storm, fire, or vandalism will be completely your responsibility to pay to repair. If valuable items are stolen from your home, no one will reimburse you for their value.
Also, if anyone is injured on your property, you can be left to cover medical expenses, rehabilitation fees, and legal defense if you’re sued for negligence.
The Home Insurance Claim Process: Know Your Rights
It’s important to remember that home insurance companies are for-profit businesses. While many insurance claims go smoothly without a hitch, sometimes companies will try to get away with depreciating the value of your possessions and underpaying your claim. Take the time to learn what your rights are as a policyholder so you aren’t taken advantage of.
Did you find this article about the home insurance claim process helpful? If so, be sure to check out the rest of our blog for more informative content!