How Does a Homeowner's Insurance Claim Work?
Despite doing everything in your power to avoid it, accidents will happen. It is better to be prepared for an unexpected situation rather than to foot a massive bill when you least expect one. For this reason, you may have gone through the process of getting a homeowner's insurance policy to protect your investments. When your home is damaged, however, the next step is to file a claim. Understanding how the claims process works and what to expect will prepare you in the event you need to file a claim. It is important to familiarize yourself with the procedures ahead of time; After all,
during an emergency is not the easiest time to try to understand insurance filing procedures.
- I need to file a claim. What do I do first?
The first thing you should do in any situation is make sure you and everyone in your home is safe. You want to take steps to ensure there is no more risk of damage to either the property or it's inhabitants. For example, if a pipe has burst and is flooding the property, you want to stop the flow of water that is causing severe damage to the home before moving on to the next steps. If taking steps to stop the damage or prevent further damage costs you anything, make sure you keep and store any receipts for those payments. Avoid making permanent or costly repairs unless you are instructed to by your insurance company. When there's no risk of further damage, use a device such as a phone with a camera to record video or take photographs of the damage.
Personal items that were damaged should be kept separate. Keep a record of anything that may need to be cleaned or repaired. If the damage was caused by vandalism or theft, involve the police right away. If anyone is injured, tell your agent. Gather names and information of anyone who witnessed the damage. It's also a good idea to have a copy of your policy stored in a filing cabinet or safe, so you can review specific coverage information.
Depending on your insurance company, you should be able to contact a 1-800 number, use their website to report a claim online, or use a mobile application. Some companies include apps that let you upload pictures and documents through your phone to make things easier.
- What will the insurance company expect from me, and what can I expect from them?
Your insurance company will notify you that they've received your claim. They may notify you email, text, app notification, or phone call. You can expect someone to contact you for more information as they investigate the claim. Common forms you may be asked to fill out include a "proof of loss" form. This form may ask more specific information about the incident, such as the time and cause of the damage, who was occupying the property at the time, the cash value of the property lost, and more.
The insurance company has to either accept or reject your claim within 15 business days receiving all of the information you've provided. Once they have everything, they will either approve your claim or send you a rejection notice in writing. This rejection notice must explain the reasons for which they have rejected the claim. There are many reasons why a claim may be rejected, including some of the following examples:
● The damage was misrepresented by the claimant
● The type of damage you've reported is not covered by your insurance policy (such as flooding from hurricanes, mold, etc. that you didn't include in your initial policy).
● You've missed the deadline to file the claim
● You have a deductible, and the total amount of the damages does not exceed this amount
● Damage was caused by normal wear and tear
● You have lapsed on your premiums or did not pay your premiums on time
- What if I disagree with insurance company's assessments?
First of all, do not panic or become outraged in the event that the company's assessments of the damage do not match your own, or if they give you an estimate that is far lower than what you were expecting. If you disagree with the final estimate given to you by the insurance adjuster, ask them to explain the amount. Something may have been overlooked, or left out when the estimate was being calculated. If everything has been double checked and the number is still below your expectations,there are a few actions you can take next.
You will typically have the option to appeal the final estimate. You can also request an appraisal process. Some policies have an "appraisal clause" which allows each party to hire an appraiser and an "umpire" to rule upon the individual assessments that each of them make about the amount of loss. The downside to this is that any expenses for hiring this appraiser will come directly from your pocket.
- How and when will I get paid?
If you have made it through the claims process with a stamp of approval and the company has agreed to pay all (or part) of your claim, they have up to five business days to provide you with this payment. If they do not pay you all at once, they may pay you in two installments. For example, they may hold the second part of your claim until after any contract work has been completed.
- What happens if I need to file a complaint?
If you believe that the insurance company has treated you poorly or unfairly, or if you suspect insurance scams or deceptive practices by the insurance company, you can file a complaint. The Texas Department of Insurance has an online complaint system and a 1-800 help line located on their website.
Hiring a law firm to walk you through the claims process can alleviate the stress that comes with dealing with insurance companies. It is often recommended for several reasons - they can help ensure that an insurance company isn't trying to take advantage of you, and that you are not denied without good reason. An attorney can also help you read and understand the legal paperwork that is involved, and advise you should you feel the need to take the claim to court for any reason.
Ask your insurance company for a copy of their claims process, including important phone numbers. Keep this information somewhere that is easily accessible should you need to reference it later.