Floods, blizzards, hurricanes, tornadoes can put homeowners and others at risk. If you own a home and have a homeowners insurance policy, you might think that you are fully covered, but that is not always true. How do insurance companies handle reimbursement for damages from natural disasters?
Checking over your homeowners insurance is key to understanding the type of coverage you have. In most cases, hurricanes, wildfires, and tornadoes will be covered, and this extends to other buildings on your property, like a shed, garage, or fence.
Flood damage is not covered in homeowners insurance policies. Depending on where you live, your insurance company may require you to purchase a separate flood damage or other policy, which you have to pay on top of your regular insurance premiums.
If your house is uninhabitable after a natural disaster, your costs for having to live in a hotel may also be covered to some extent. There may also be coverage for loss or damage to personal property, theft, or vandalism. The coverage is usually not 100 percent, it generally covers 50 to 75 percent of the home’s insured value.
What Are Insurance Exclusions and Deductibles?
Besides floods and earthquakes, homeowner policies may exclude coverage for personal property, like artwork and jewelry, but you may be able to purchase additional policies. Information about exclusions can usually be found in the fine print of your policy.
As for deductibles, these should also be taken into consideration. Homeowners policies are generally subject to deductibles of $250 to $1,500, and you will pay more for the lower ones. Deductibles for earthquake and flood insurance policies can be higher, especially for people who live in hurricane-prone areas. If you are not sure about any part of your coverage, you can always check with your insurance company.
Different Kinds of Homeowners Policies
When you are shopping for this kind of insurance, you will need to make a lot of decisions. One is replacement cost vs. actual cash value. Replacement cost gives you the money needed to replace something with a new one without having to deduct anything for depreciation, but actual cash value subtracts that depreciation amount. For example, if you have a television set, a replacement cost would cover buying a new one and actual cash value would pay what the television set would be worth in real time.
If your house is destroyed and cannot be repaired, homeowners policies generally pay to replace it, but up to the limits of the policy. This is called guaranteed replacement cost. Extended replacement cost is when the insurance provider will pay up to a certain higher percentage to rebuild the home. Many insurance plans have inflation guard clauses to keep apace with local building cost increases, and this is something else to look for in your policy.
How Can I Settle a Claim After a Natural Disaster?
It is best to contact your insurance provider as soon as possible after a natural disaster. They will tell you if the damage is covered by your policy, how much time you have to make your claim, and if the claim exceeds your deductible. Your agent can also let you know when an adjuster will be sent out, if you need to get estimates for repair work, and how long the claim will take to process.
After you call, you can make temporary repairs to prevent your property from getting any more damage. If you have to spend money to do this, save all the receipts; you can send them to the insurer for reimbursement because this could be part of your total settlement. Do not start any extensive, expensive permanent repairs until the insurer approves this in writing.
You may have to complete a Proof of Loss form, and an adjuster may visit your property to assess the damage. Put together an inventory of everything of value that was damaged or destroyed along with any receipts that you might have. Do not forget about any outlying structures, like tool sheds and a swimming pool, and do not throw anything out until after the visit. As a preventative measure, you can take photographs or videos of everything that was damaged.
Other Tips for Settling Homeowners Claims
If major work needs to be done on your home, you will need to get written estimates or bids from several contractors. These should have information about the materials and labor required on a line-by-line basis. Keep a copy of everything, as well as all communications from the insurer to improve your chance of getting paid in a timely manner.
Even if you fill out all the paperwork properly and seem to have adequate coverage, insurers often deny claims or make offers that are well below what you feel you are owed. You may be able to appeal their decisions, but if that fails, an experienced lawyer who knows the ins and outs of insurance law may be able to help.
There are a few other possible options as well. Serious natural disasters can destroy homes, leaving the owners overwhelmed. This is where the Federal Emergency Management Agency (FEMA) may be able to help. This is not the same as insurance and can provide the basic things you need to make your home safe, functional, and sanitary. Claims have to be approved, and FEMA inspectors may need to come out to inspect the home. In order to get FEMA’s help, you have to reach out to them and apply for disaster assistance.
Warren Insurance Lawyers at Herold Law, P.A. Help Homeowners Who Are Facing Problems With Insurance Claims
Your homeowners insurance company may make it hard for you to get the compensation you are entitled to pay for repairs and property damage. Our skilled Warren insurance lawyers at Herold Law, P.A. may be able to help. Call us at 908-647-1022 or complete our online form to schedule an initial consultation. Located in Warren New Jersey, we serve clients throughout the surrounding areas, including Plainfield.