Losing your home and personal belongings to a fire is already a devastating experience. The last thing you want is the insurance company giving you a hard time regarding your claim. Here are some tips to help you understand the process and what to expect. Remember, not all insurance companies are the same. Talk with your agent and claims personnel for specific coverage details.
1. File your claim right away and press the insurance company to act ASAP
Call your homeowners' insurance agent immediately to get the process started. Dealing with the insurance company is a very convoluted process involving countless calls, emails, letters, and documents. Be sure to keep track of all communication and keep a copy of all documents and post office receipts of mailing. Take notes, including the date and time, of every phone conversation and face to face meeting.
2. Ask for an Advance Payment
If you were forced to evacuate due to the dangerous conditions, you may not have grabbed essentials like toiletries or clothes for school and work. Some of these things may have even been completely lost in the fire. Don't panic. Call your insurance company and ask for an advance payment. This way you can go purchase your necessities without having to wait for claim closure.
3. Keep track of your living expenses
Your insurance policy may include "loss of use” coverage which means that the insurance company reimburses you for your living expenses while displaced from your damaged home. Note, however, that you are only entitled to the difference between what it costs you while displaced and what it was costing you in your home. For example, if your monthly living expenses are $4,000 per month, but now you are having to add hotel stays, restaurant meals, laundry expenses, and extra gas for your car, totaling an additional $1,000, your insurance company will only reimburse you the extra $1,000 per month.
4. Secure your property to mitigate damage
The insurance company will require you to take reasonable care of your property. Therefore, be sure that you secure your property from further damage. If something is a total loss, of course, this is unnecessary. However, where only one section of your home is damaged, be sure to take proactive measures in preventing further damage. Insurance companies call this "mitigating damage," which just means reducing the amount of damage.
5. Get the right repair estimates and keep receipts and documentation to everything
The insurance company will require an estimate of the fair market value or cost of replacement of damaged property before the fire. Insurance companies will send out their own adjusters, but remember that these folks work for the insurance company and so will make decisions in the insurance company's best interest, not yours. You do not have to accept the numbers that they throw at you, so it could be best for you to hire your own independent estimator or contractor.
The estimator or contractor you hire is being paid by you and therefore is looking out for your best interest, not that of the insurance company. Do not accept any amount from the insurance company unless you are certain it is what a buyer would have paid for your home and its contents just before the fire.
Be picky when choosing a contractor. Choose one who is not only good and experienced in building, but also is experienced in how insurance companies handle issues. Before you agree to commence any work, be sure that you and the insurance company are in agreement regarding the scope of the work to be done.
6. Keep paying your insurance premiums
Many people make the error of discontinuing their insurance premiums once they've filed fire insurance claims. This is a huge mistake. Remember to give your insurance agent the new address of where you're staying and have that added to your liability coverage.
7. Don't be in a hurry to finalize the claim
Give yourself some time. Protect yourself by waiting a few months before consenting to closing your claim. Insurance companies are quick to close fire insurance claims, especially in mass disaster situations. The longer your claim is open, the greater chance for you to discover something you overlooked previously. This is actually a common occurrence. In such a stressful and confusing time, it is likely that you may forget to list an item of value in your initial insurance claim.