The homeowners claims process can be difficult to understand. I’ll help you prepare for it.
In the previous article, we saw how “Lucy and Roger” kept receipts, started a journal, assessed the damage, secured their home from further damage and of course, reported the claim.
Now, let’s see how they handled the claims process after these first steps.
Here are seven things they did right. You can follow their steps to get the best outcome possible for your claim.
Step 1: Be tactful and helpful.
Lucy believes the old saying “You catch more flies with honey than vinegar.”
She realized from the first meeting with the claims adjuster that he was working long hours with an irregular schedule. So, Lucy made sure to have everything that the adjuster requested, on time, before every meeting. She was also courteous and patient, which helped the entire process.
Step 2: Create a detailed inventory of your losses.
Roger and Lucy learned that before bids by contractors could be agreed upon, they first all had to agree on the “scope of loss.” That’s a term that simply means... “what’s the precise nature of the damage?”
Roger’s home inventory (the one he created before the house fire), helped establish the scope of their lost personal property. Then Roger worked closely with the adjuster to establish an agreed upon scope of loss for their home, including the quality of construction.
Step 3: Get estimates.
After the scope of loss was agreed upon, it was time to get several estimates from reputable contractors. Roger made sure they chose contractors who were recommended by people they trusted.
Step 4: Understand the process.
Roger made sure that he and Lucy educated themselves on the claims process. They learned that checks for additional living expenses, like their hotel, should be made out directly to them.
But checks for payments to contractors would likely be made out to either the contractor directly, or to the mortgage company who would put the money in escrow and make payments directly to the contractors.
Step 5: Understand your policy.
Here is where their local agent was a tremendous help. They had worked closely with their agent a few years ago to make sure they bought the right coverage.
Now it was time for a refresher course to make sure they understood their benefits correctly. They had several settlement options under the policy. They needed to know them, so they could make the best decisions possible.
Step 6: Keep paying your insurance premiums and mortgage.
Roger to the rescue. He knew that contrary to what others might think, they needed to keep paying their mortgage and insurance premiums. He was right.
Step 7: Don’t settle until you are satisfied.
Lucy was prepared. The insurance company issued a check with language saying, “By cashing this check, you are agreeing to close the claim.”
But she still had concerns, so she didn’t agree to close the claim.
Instead, she made a call to the adjuster’s manager. Within a couple of weeks, they had finally reached a better settlement — one that she and Roger were happy with.
You are always in the driver’s seat. A claim isn’t closed until you say it is.
No one wants to be the victim of home fire. But if you are, do you know what to do?
Do you have a “next steps” insurance claim plan?
I’ve insured a few people who made such a plan. Let’s look at one couple to see how it worked for them.
The dynamic duo: “Let’s-Get-It-Done Lucy” and “Record-Keeping Roger”
Lucy and Roger (not their real names) stood outside with their kids and watched the last of the fire trucks leave after their house fire. Their home was still smoldering. They couldn’t safely go back inside tonight.
What did they do?
Step 1: They started keeping receipts.
They needed a hotel. They needed fresh clothes. The kids needed to eat. Lucy and Roger needed coffee. Oh my gosh, how they needed coffee.
All of that cost money, and most of it was likely reimbursable later by their homeowners insurance… if they had the receipts. This was Roger’s part of the plan, and even though everyone else got annoyed when he asked for receipts… for everything… they thanked him later.
Step 2: They started keeping a journal.
Once safely in a hotel, with fresh clothes, fresh toiletries, and food in their stomachs, Roger started a journal to document everything that happened after the fire.
He knew that there would be many phone calls and emails back and forth, as well as letters from the insurance company. Meetings with the claims adjuster. Conversations with contractors.
He lived by the old saying: “the weakest pencil lead is stronger than the strongest memory.”
Step 3. They called the insurance company.
Now it was time for Lucy to do what she did best… put things in motion.
Lucy knew that she and Roger had a contractual responsibility to notify the insurance company as soon as possible.
So, she called the 24-hour claims line that night to report the claim. Thanks to Roger, who kept policy numbers in his contacts on his phone, she was able to provide everything they needed to start a claim: name, phone number, policy number, address of their home, and a description of the damage.
Step 4: They assessed the damage.
The next morning, before the adjuster met them later in the day, Lucy and Roger went home to survey the damage. They made sure to check with the fire department that it was safe to go back inside.
With Lucy leading, and Roger taking photos (lots and lots of photos), they did a quick walk-through. And they made sure to not disturb anything.
Step 5: They secured their home from further damage.
During the initial survey, they saw that the fire had burned a sizable hole in the roof. They also saw the weather report and knew that a thunderstorm was due later that afternoon.
So, Lucy called a contractor friend from church, and he came by within the hour to nail a tarp over the hole in the roof, to keep water from coming in and doing more damage. Lucy and Roger knew that this was an obligation they had under the terms of their homeowners policy.
In my next article, I’ll finish the story of Lucy and Roger, and you’ll see how previous planning paid off during the claims process and how they got the payout that they knew was fair.