(Newswire.net — August 28, 2017) — Irene, Rina, Isaac, Sandy. They are not your friends. They are the names of hurricanes that have made landfall in Delaware since 2010.
Hurricanes are significant events in Delaware where 100 percent of the population lives in a coastal county, but other disasters also damage homes. TrustedChoice.com reports that the top five reasons for Delaware home insurance claims are:
- Wind and Hail Damage
- Water Damage and Freezing
- Property Damage
- Theft
- Fire and Lightning Damage
Regardless of the cause, the claims process often leaves homeowners scratching their heads. Usually, the first instinct is to call their insurance company or the agent who sold them their policy. Both are good starting points, but what follows can be a bit frustrating without an understanding of how the claims process works.
Understand Your Policy and Manage Your Expectations
The way the claim is handled and paid out will depend on the terms of your policy. Here are three things you should understand about your policy to help relieve frustration and manage your expectations during the claims process:
Does it provide for Replacement Cost or Actual Cash Value?
A replacement cost policy insures your home for the amount needed to repair or replace it with a comparable structure. An actual cash value policy only pays an amount equal to the market value of your home or possessions, or the limits of the policy.
What Type of Replacement Cost Does it Provide?
There are two general types of replacement cost policies:
- Extended Replacement Cost – Insurer pays an amount to rebuild your home up to a specified percentage over the policy limits.
- Guaranteed Replacement Cost – Insurer pays to rebuild your home comparable to what it was regardless of cost.
What are the Terms for Additional Living Expenses (ALE) Coverage?
ALE is the part of your policy that provides for the costs of lodging, meals, and other expenses that result from the loss of the use of your home. The reimbursement is usually limited to a percentage of the amount of insurance on your home, or to a specified time period. Know which your insurer provides and keep every receipt for living expenses.
The Claims Process Step-by-Step
Understanding your policy, it will be easier to work through the claims process. Here are the basic steps:
- Contact your insurance company or agent – Confirm your understanding of the policy terms, deductible, any amounts you may be responsible for, the time limits on filing a claim, how long claims processing requires, and when the claims adjuster will be out to inspect the damage.
- Secure your property – Make temporary repairs and do what is necessary to secure your property. Keep receipts. These costs are part of the total settlement.
- Document all Damage – Include the house, possessions, and any other covered structures like sheds and garages. Detailed lists and photographs are helpful.
- Get Written Bids – Used licenses contractors for bids. They should include all materials, labor, and a description of work to be performed.
- Provide documentation to the adjuster – Keep copies of everything but provide the insurance company adjuster a copy of all of the documentation and bids you have compiled.
- Repair or Rebuild – Depending on the claim, repair or rebuild your property according to the terms of your policy and the settlement worked out with the insurance company.
- Receiving the Claim Check – This often causes confusion. If you have a mortgage on your property and the insurer does not pay the contractor directly, you will probably receive a check that requires endorsement from your lending bank. This is not because the insurer is avoiding paying. It is a banking requirement mandated to protect lenders who hold the mortgage on a damaged property.
Stop Scratching Your Head
The vast majority of insurance companies fulfill the terms of their policies. In Delaware, they paid out $133,077,000 in 2015.
Your house wasn’t built in a day, and it won’t be rebuilt in a day. Understand the terms of your policy, manage your expectations, and move the claims process forward smoothly.