The season for wind storms is fast approaching. Although last season was relatively quiescent, it’s advisable to be ready this year. Most of us think: “It won’t happen to me,” but if it does, it helps to be prepared. Below are a few before & after tips that will get you through just in case.
Before The Storm
Know what insurance coverages you have. It’s not unusual for most people to not know what their homeowner insurance policy actually covers. This is mainly because they haven’t read it. “That’s what my agent is for,” might be a typical refrain. The only way to know what isn’t covered is to review the policy contract with your agent. This can go a long way towards preventing unpleasant surprises like coverage gaps or omissions. Some coverage gaps or omissions are only discovered after a loss, not before. Your policy and the Declarations page outline all of your coverages. It’s advisable to sit down with your agent for a thorough review. Although that’s probably not on your top ten list of desirable things to do, it’s not quite as bad as a root canal (apology to Dentists), & it could save you a lot of grief in the long run. For instance, would your policy cover a month-long hotel stay while your floors and cabinets were being replaced? The coverage that provides that sort of thing is called “loss of use coverage,” and it’s very important protection to have. A review of your policy with your agent could determine if you have it or not.
As one insured who recently had a claim, explains…..
As I walked around on a wet floor, tripping over wet towels, trying to find the phone number for my insurance company and my policy number, I was doing calculations in my mind based on what I thought my deductible was. I almost just gave up and didn’t even file a claim because I thought no way it was going to be over my deductible to fix this mess. I called and discovered that my deductible was less than I thought! I now keep my policy handy so I can call my agent or the claims department quickly. We were unable to stay in our home while it was being repaired, so the insurance company put us up in an extended stay hotel, with two rooms that had complete kitchens and we were even able to bring our dog.
Document & Store Before
Perhaps the most important thing you can do before a storm, other than make sure you have adequate coverage & your policy is in-force, is document. Disputes can and do arise over damages. Document the current condition of your property and your belongings. Take pictures or video of each room once a year at least. It’s also a good idea to make a list of the value of your contents and keep receipts. In the event of a loss, this will not only prove to the insurance company that the possessions you’re claiming were actually in your home, but will also show the pre-existing condition of these items as well. And be sure to store the photos or video in a safe place, such as a flash drive that you can easily put in your safety deposit box. And send a copy to a family member or friend. Deerfield makes available at no charge an electronic file folder for select clients. If they video or photograph receipts & send them to us, we will store them so if there ever is a need to resolve a dispute, we can have proof to the adjuster in no time, and our client doesn’t have to hassle with it.
Safety & Loss Control
Be vigilant regarding safety & loss control.
√ Check and maintain the pipes in your home on a regular basis. Look for cracks in the grout of tile floors and around tubs, sinks & showers. Water damage can be extremely costly.
√ Test your smoke and carbon monoxide detectors every 3-4 months. Fire & smoke damage claims average $4,200 nationally.
√ Keep a quality fire extinguisher in your house at all times & familiarize yourself with it so if the time comes you will know how to use it.
√ Keep gutters and downspouts clear of debris. Water will eventually destroy anything it comes in contact with given enough time, and clogged downspouts prevent water from draining away from your house.
√ Inspect your roof. If you can’t do it yourself, paying for an inspection every couple of years may be worth the money compared to the alternative of having interior damage to your home. A breach in your roof can let water in. Again, water in the wrong places can cause a lot of damage over time.
After The Storm
If you have damage after the storm is over, you should document the conditions. Use your smart phone or a camera before making any repairs. Then quickly make further damage prevention repairs. These types of repairs are called “mitigating damages” and are your responsibility as the policy holder. Mitigating damages means that you minimize further harm to your property — such as turning off the water if you have a broken pipe, or boarding up a broken window or door, or even tarping over roof damage. If you are forced off premises, you may need to inspect the property often to make sure it isn’t vulnerable to further damage. Do not, however, make any permanent repairs or throw out furniture or other expensive items until the adjuster has inspected the loss.
You should also keep receipts of any emergency repairs you have to make or anything that you have to spend money on, like batteries, fans, food, bottled water, or building materials.
Be organized, keep a log of calls and emails and take detailed notes – including the names of contractors, claims adjusters, city or county personnel. Adjusters can be reassigned during a claim, or there may be more than one adjuster. Documentation of all contacts will prove helpful if you and the insurance company later have different versions of who said what to whom.
When your adjuster arrives to inspect the damages, have evidence of your loss available, such as receipts, pictures or videos. These can be compared to photos taken before the loss to help establish the value of damaged or destroyed items & proof they actually existed. And don’t forget your policies; some claims can be included in more than one policy, & coverages may overlap. At this point you will be in the claims adjustment driver’s seat assuming you have done all of the above. And whatever you do, don’t stop paying your insurance premiums! Even if your home is uninhabitable, your policy includes other coverages that you may need, & you will still have value there even if your home is a wreck.
Work With the Contractor
Your homeowner policy allows you to repair your home and choose your contractor. Be sure to hire one who has experience with insurance companies, and be very sure that you, your contractor, and the insurance company all agree on the scope of work being done.
Working with a contractor who may be going to subcontract the work may be the most frustrating part of your claim. So make sure you also monitor closely, & interact with the subcontractor who is actually doing the work.
The insured continues…..
The claims process takes longer than you would think. You have to file the claim, wait for the adjuster to call you back, then more waiting on the inspector to come and inspect the damage. Then the claim has to be sent to the insurance company to be evaluated. Once it’s approved, they send you the claim payment breakdown. Take ‘before’ pictures of all areas that will be worked on before the work starts so you will have a reference to go back to if there are any issues with the final job. Then take ‘after’ pictures to document the repairs.
Having the right coverages in place before a loss, as well as photos or videos easily accessible, is key to a successful claim outcome. We recommend a thorough review of your policies at each renewal with your agent. You should understand what your policy does and does not cover, so you can be prepared to secure the coverage you need, or if a particular coverage is not available or feasible, consider safety & loss control techniques like a water shut off system. And finally, be mindful of the fact that an insurance policy has its limitations, so self-insure to the extent necessary by setting up a separate dedicated escrow or insurance account & fund it to take care of those items that insurance won’t.
The Deerfield Team
This article is intended only as a general discussion of these issues & we cannot guarantee the accuracy thereof. It does not purport to provide legal, accounting, or other professional advice. If such advice is needed, please consult with your attorney, accountant, or other qualified adviser. The Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Accordingly, the information provided herein is provided with the understanding that Deerfield Advisors is not engaged in rendering legal advice. Deerfield Advisors strongly advises that clients and/or the reader of this publication contact an attorney to obtain advice with respect to any particular issue or problem discussed here. Also, please know that discussions of insurance policy language is descriptive only. We strongly advise that one’s individual policy & ones advisor be consulted regarding this subject matter before any action is taken in any way. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. The Deerfield Advisor White Paper Series is a registered trademark of Deerfield Asset Management Inc. DBA, Deerfield Advisors and is produced by Deerfield Advisors for the benefit of its clients, and any other use is strictly prohibited. All rights reserved. Copyright © 2014.