It is common for the average homeowner to have house insurance. However, many do not know what it truly entails. Understanding what house insurance is and how the claims process works is the best way to enjoy your coverage. House insurance claims arise in several common scenarios. Examples are fire damage and damage caused by extreme weather.
In this blog post, we have put together some tips to help you easily navigate these claims.
Understanding House Insurance Claims
A house insurance claim is a request made to your insurance provider regarding damage done to your property. This request triggers your coverage. The insurance company cannot pay your settlement if you have not made a claim.
You should understand the type of policy you have before filing a house insurance claim. Generally, house insurance policies come in eight different forms. However, we will be discussing the four most popular policies. It is advisable to know what kind you have to avoid filing unsuitable claims.
- HO-2 Broad Form Policy
This policy offers named peril coverage. This means that you are only protected from specified and named perils in your policy. It covers basic perils such as fire, lightning, windstorms, hail, and smoke. You have coverage from issues such as riots, theft, vandalism, and damage caused by aircraft or vehicles. It also provides coverage for other structures and personal belongings. It gives you additional living expenses coverage and medical payments to others. You should know that coverage differs from insurer to insurer. Therefore, you should always check your policy thoroughly.
- HO-3 Home Insurance Policy
This is the most common form of house insurance. It covers your home, other structures, and personal belongings. It provides for additional living expenses coverage. You also get liability and medical payments. It is an open peril policy, unlike HO-2. This means that it provides coverage for all perils except those mentioned as exclusions. It often excludes any damage that wear and tear, floods, pets, and pollution cause.
- HO-4 Renters Insurance Policy
This policy targets renters who need to insure their personal property. It provides additional living expenses coverage and liability insurance. However, the policy excludes the structure of the home. This is because the renter is not the owner of the property. Therefore, the policy tends to cover common perils such as fire or smoke. It also covers freezing, theft, explosions, and vandalism.
- HO-6 Walls-In Coverage
This policy is specifically for people living in condos or co-ops. It usually covers the walls, floors, and ceilings of the condo and any renovations done to it. It provides liability insurance, medical payments, and personal belongings coverage. You also get additional living expenses coverage. Your condo association may already have an insurance policy. Be on the lookout for that before purchasing this coverage.
Know that this list is far from exhaustive. There are policies for old homes, mobile homes, and comprehensive policies. These policies are a little harder to get compared to the rest. Thus, they are not as popular.
Common Types of House Insurance Claims
Your house could suffer damage in several ways that are usually provided for in your policy. Here are the most common types of claims and what you should know about them:
- Wind and Hail
According to the Insurance Information Institute, wind and hail claims accounted for 39.4% of all home insurance claims in 2021. These are the most frequent kinds of claims. They usually fall under weather damage in your policy. Extreme weather often damages roofing, windows, and other structures in your home. For example, your shed or garage. If you live in a coastal area, your regular house insurance might exclude wind and hail. Check your policy to be certain.
- Fire and Lightning
These claims are also incredibly common, making up about 23.5% of house insurance claims. They tend to have the highest payouts out of all types of claims. Fire damage claims are often devastating. They may require the homeowner to vacate their home for a period to enable repairs. In extreme cases, you need to completely replace your home. You may also need to provide a police report. Always check your policy to see if you have personal belongings coverage. Also, be on the lookout for additional living expenses coverage.
- Water and Freezing
About 24.8% of home insurance claims are due to water damage or freezing. An example is when pipes freeze and burst during winter. Water damage claims can be tricky to navigate because water damage often triggers other types of damage. For example, mold damage is often a by-product of water damage. It can also cause sagging roofs or floorboards. You should have a professional restoration company examine your home. They will also give you a quote for repairs. This will enable you to negotiate a better settlement.
- Theft Damage
Theft damage claims are less common than other claims. They account for about 0.7% of house insurance claims. Theft damage can occur from burglars damaging your home to get in or stealing your personal property. You will need a police report when filing theft damage claims. This helps the police to be on the lookout for the perpetrator(s). It also helps you with documentation and claim filing purposes. As always, check your policy to be certain of what it covers.
- Liability
Liability house insurance claims are rare and infrequent. They usually entail medical payments for a third party injured on the homeowner’s property. Sometimes, they include damage a policyholder causes to a third party’s property. Although they are infrequent, they can come with a pretty hefty bill. Your policy determines the extent and limitations of your coverage, so be sure to read the fine print.
Dos and Don’ts of House Insurance Claims
Do:
- Document the Damage Thoroughly
It is important to have extensive evidence of the damage as it has occurred. This serves as proof to substantiate your claim. Insurance companies usually require evidence of the damage during the claims process. It is best to take pictures and videos before the insurance adjuster comes to inspect your home.
Documenting the damage also includes curating a list or inventory of lost or damaged personal property. It is best to curate this list as you inspect the site of damage to ensure accuracy. Remember to add the value of items after curating your list. This depends on whether your policy provides for actual cash value or replacement cost.
- Keep Records of All Communication With the Insurance Company
The claims process can be an exhausting one. This is because it entails different processes. For example, investigating the claim and negotiating the settlement can take weeks. During this period, you will have several discussions with the insurance company and its adjuster. These discussions can sometimes end in agreements between you and the company. Do not rely on the oral agreements made during these discussions. Rather, put everything into a letter or an email. Clearly mention the agreement and the other party’s consent.
Be sure to keep copies of any documents shared between you and the company. With electronic documents, you can create folders on your device to store copies. For physical documents, keep extra copies in a safe and dry place for future reference.
- Seek Estimates From Reputable Contractors
Avoid contractors that your insurer recommends when seeking repair estimates. Those contractors often work for the insurance company as well. This means they will have divided loyalties. They will try to find ways to cut costs for the insurance company. For example, they may create estimates based on the repair of certain damaged items. This could be dangerous for you in the long run. In reality, total replacement will be safer for you but more expensive.
Seek reputable and trusted contractors instead. If you have a public adjuster, it is best to let them handle this for you. If you do not, you can seek recommendations from trusted friends and family. You can also check for reviews online before hiring the contractor. You should take issues such as proximity, billing structure, and certification into consideration.
Don’t:
- Delay in Filing a Claim
Delaying the filing of your claim only hurts you as the policyholder. Most insurance providers have a timeframe within which you can file a claim. Once this timeframe passes, the insurance company is well within its rights to deny any claim you file. Also, filing your claim marks the beginning of your claims process. The longer you wait before filing your claim, the longer your claims process will likely be. If you need your settlement quickly, you should also file your claim quickly.
- Assume Your Policy Covers Everything Without Reviewing It
Knowing your policy can help you have a smooth and quick claims process. It will prevent you from filing claims with no substance. It also stops you from filing claims based on damages that are not covered. Take some time to review your policy before reaching out to your insurance company. This is especially important if you have a named perils policy. Assuming that your policy covers a peril can end in a fruitless claim.
- Accept a Settlement Offer Without Understanding Your Rights
You are not bound to accept the first settlement offer the insurance company gives you. Rather, you can negotiate with them. Use the extent of the damage and the repair estimates to do so. A public adjuster can make negotiation much easier for you. They have the experience and expertise to deal with insurance companies.
Tips for Maximizing Your House Insurance Claim
Here are the best tips for getting the most out of your house insurance claim:
- Hire a Public Adjuster
Public adjusters can get you the highest settlements possible. They are skilled negotiators who know how to level the playing field. This way, they get you the compensation you deserve. Note that hiring a public adjuster does not automatically translate to higher settlements. However, you will always get the full benefits of your policy when you hire one.
- Understand Your Policy
You can better enjoy your coverage when you know what it entails. Your insurance provider or their adjuster will likely not explain the benefits of your policy to you. However, it will be easier for you to navigate the claims process when you understand the limits and exclusions of your coverage. You will also be able to make provisions for excluded perils. This means you will have protection when they occur.
- Negotiate
Most of your interactions during the claims process will likely be with the insurance adjuster. Negotiate the settlement offer because the first offer is usually a low-ball one. Do not negotiate blindly. Rather, negotiate with the damage and the terms of your policy in mind. Furthermore, remember to be polite but proactive throughout.
- Be Proactive
You should be a diligent policyholder. File your claim as at when due and gather any needed documentation as quickly as you can. Avoid filing claims not covered by your policy. You should also ensure you are tracking any out-of-pocket expenses. That way, you can ask your insurer for reimbursement later. Lastly, do not hesitate to call in professional help when you need it.
When to Seek Legal Assistance
If you have a dispute with the insurance company, your dispute resolution clause will kick in. You and your insurer will likely have to appoint a mediator. This mediator will then help you resolve the dispute. However, there are situations where you will need legal assistance. When mediation fails, you may need to proceed to court for a resolution. Furthermore, in cases of fraud or complex cases, you might need legal representation.
When choosing an attorney, look out for whether they have handled insurance claims cases in the past. Furthermore, take notice of their style and method of communication. You should opt for an attorney who is duly certified and has the experience you need.
Conclusion
House insurance claims can come in different forms and with a unique set of challenges. However, if you remain present and intentional throughout the claims process, things should be easier for you. Always try to know your policy in-depth and reach for a public adjuster if you need one. Get estimates early on and negotiate your settlement. If things go very wrong, opt for legal assistance.
Insurance claim giving you trouble? Let On-Site Adjusting make things easier for you. We have the experience and expertise to get you the settlement you deserve. We also offer a free consultation for first-timers. Contact us today to get started.
