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What Do Homeowners and Businesses Need to Know About the Insurance Implications of Natural Disasters?
If your home or business has been damaged in a natural disaster, you may feel thankful that you purchased insurance beforehand. However, you may find that your insurance may not cover your losses. The fine language of exclusions and riders often determines the actual coverage of the insurance policy. An insurance policy may cover natural disasters but exclude certain facets attached to them.
For example, a standard insurance policy does not include flood coverage. If the natural disaster was a hurricane, and the damage was determined to be caused by a flood, you may not get a check if you do not have specific flood insurance (or some parts of the damages may not be covered).
Commonly, an insurance company will blame whatever damage you have on something excluded by the terms of the policy. In addition, the fine print and the exclusions may mean that the policy does not cover some types of damage associated with a natural disaster.
The Type of Insurance You Have Matters
The amount of compensation that you may get after a natural disaster depends on the type of coverage that you have. There are four primary types of insurance coverage:
- Actual Cash Value: You would be paid for the actual value of the property that was damaged in the natural disaster.
- Replacement Cost Value: Your compensation would be based on how much it may cost to replace a structure.
- Extended Replacement Cost: You would get an extra percentage guarantee to cover the cost of your structure.
- Guaranteed Replacement Cost: You would be paid for the actual cost of replacing your property, no matter how much it costs.
How much you may be able to receive for your damages depends on the type of policy that you have purchased. The type of insurance that costs the least is Actual Cash Value, while Guaranteed Replacement Cost may cost the most.
You should understand that many people in your area have experienced a similar loss to yours. Few builders are in the area, and supplies and laborers may be short. You may think replacing your home could cost $300,000 based on the value of materials and labor, as it would be during normal times. However, when numerous homeowners in the market need work, you can expect prices to increase beyond $300,000.
Consider Hiring a Lawyer When You Have a Large Insurance Claim
Policyholders must often be careful when dealing with the insurance company directly after a natural disaster. When you are facing damages of hundreds of thousands of dollars, it is crucial that you get everything you need from the insurance company. However, the insurance company is likely faced with a mass loss event. They are being inundated with claims and may suffer major losses themselves. Even if they have reinsurance, the insurance company may try to settle a claim for less than it is worth to spare themselves from financial catastrophe. Hiring an experienced attorney can help protect your interests when needed.
Contact Our New Jersey Insurance Lawyers at Herold Law, P.A. if You Need Help Understanding Your Coverage
Our New Jersey insurance Lawyers at Herold Law, P.A. will protect your best interests when you need to file a claim. We know how to negotiate with insurance companies to get the best possible results for our clients. Call us today at 908-679-5011 or contact us online to schedule an appointment with one of our attorneys. Located in Warren, New Jersey, we work with clients in Somerville, Morristown, and across the state.
