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.
Many of our neighbors are still picking up the pieces after the fires last fall destroyed more than 7,000 homes across the North Bay.
In addition to the tragic loss, many found out that they were underinsured, and didn’t know it.
According to Consumer Reports, 60 percent of all U.S. homes are underinsured, and data shows that two-thirds of all homes damaged by the recent fires were underinsured by more than $50,000.
Let’s look at three common gaps in coverage that contributed to this tragedy after the tragedy.
Gap No. 1:
Not enough coverage on your dwelling.
Your home is insured based upon the cost to rebuild it, not its current market value. That’s a surprise to many people. But it’s true. So, thinking about “how much is my home worth?” is not the proper way to determine the amount of coverage you should have.
You should always base your insurance coverage on how much it will cost to rebuild your home.
And that can get confusing.
How much does it cost to build a new home in your area today?
That’s based on type of construction and market demand. For instance, if lots of people need to build all at once (say, after a big fire), then costs can go up.
You need a proper homeowners insurance review every year to make sure your home could be fully rebuilt after a fire or other catastrophic loss. Guesswork is the primary reason for this gap.
Gap no. 2:
Not enough coverage for your possessions.
People seldom think about how much coverage they have for all their possessions. It’s normal to assume they have enough. But people often have gaps in this area, especially if they own expensive items.
If you have expensive electronics, artwork, firearms, collectibles, jewelry, antiques, or musical instruments… you probably need to talk to your insurance agent to make sure that they are fully covered.
In addition, even if they are covered without a specific policy limit, the combined value of them may exceed your coverage limits.
Gap no. 3:
Not enough coverage to meet new building codes.
Here’s a hidden gap that’s seldom talked about.
Many homes were built years ago. They are beautiful, and all “up to code.”
Except they aren’t. Not by today’s codes anyway.
If many of those homes were built (or rebuilt) today, state and local ordinances would require that they meet current building codes. The codes back then don’t apply when rebuilding today.
Many homeowners get hurt by this at claim time. They don’t have proper coverage for building code upgrades. That coverage is often known as Ordinance & Law Coverage.
Only a local insurance professional who is familiar with local codes can make sure you’ve got enough coverage for this.
It’s critical that you have an annual homeowner insurance review with a local insurance professional. You need someone who is committed to making sure there is not an insurance tragedy after a tragedy.
Bruce Sackrison's Insurance Matters: Apples and oranges: compare auto insurance without going bananas
You’ve seen it everywhere: “click or call to save on your insurance.”
Should you click or call?
How do you compare car insurance rates without going bananas?
1. Jungle of carriers.
According to the Insurance Information Institute, there are more than 2,500 auto insurance companies in the United States.
Hundreds of these companies are licensed to sell you a policy in California. How can you possibly compare them all? There is always “one more quote” that you can get. Who’s got the time?
2. Apples and oranges.
Anyone can quote you a cheap price and “compare” that to your current policy.
They can even say that it’s an “apples to apples” comparison.
But what if it’s “apples to oranges?” There are so many ways that a car insurance quote can be “tweaked” to make it look better than what you have now.
At the end of the day, you must trust someone to know that it’s truly “apples to apples.”
3. Fine print nightmare.
We all know the adage: watch out for the fine print.
So where is the fine print in a car insurance quote in Napa, California? Usually (not always) it’s in the “exclusions” part of your policy. That’s where the “gotchas” often live.
You need someone you can trust to explain the “insurance-y” language.
1. Company stability.
Big doesn’t always mean better or safer. We learned just a decade ago that no one is too big to fail.
So, if bigness alone doesn’t guarantee stability, how can you determine by yourself if a company is stable?
When you choose an insurance company, you are betting on them to pay claims later.
2. Inadequate protection.
Here’s the biggest risk you face when comparing car insurance premiums. You may be tempted to lower your coverage to get a cheaper rate.
That’s not always a bad idea if you are aware of the risk. For instance, raising your deductibles may be a good idea for some people. That can help lower rates.
But many people I talk to don’t have enough liability protection. They haven’t looked at their assets and future earnings potential to see if they have enough protection in case of an at-fault accident.
In addition, some coverage just makes great sense but is not required, such as uninsured motorist coverage.
Numbers can be tweaked to create a great quote, but the quote may expose you to great risk.
Trust is the solution.
You must trust someone. You’ll either trust yourself, an online computer program, a person in a cubicle hundreds of miles away, or a local and experienced agent. Your assets and future earnings are at stake, so your choice matters. Choose wisely.
Call a local agent who lives in your community.
They have “skin in the game” at claim time. Your safety, and their reputation hang on helping you make the best choice.
They will put your interests first.
Santa delivered gifts, but he didn’t insure them.
Santa delivered the presents, but did he insure them?
No, he didn’t. It’s not in his job description, and poor old Saint Nick had a lot on his plate. But thankfully, your insurance agent is ready to help.
Here’s why you should make a call to your agent as soon as the office opens:
Thefts are generally up right after Christmas. Thieves know where the goodies are, especially when they see the boxes out on the curb.
I understand that almost everyone forgets to call their agent immediately after receiving an expensive gift.
The thrill of the gift tends to block out this mundane task. So, I’m asking you… call your agent.
Three things to ask your agent when you call:
1. Do I have enough contents coverage?
This is a good first question. Your agent can answer it best by asking you a few simple questions about what needs to be covered in your home.
2. Do I have replacement cost coverage or actual cash value coverage?
Now we get into the weeds… just a bit. But this is an important question, and I bet some of you have never thought of it.
Why is this question important?
Because actual cash value coverage pays only the cash value of the items lost due to a covered claim. For instance, you may have paid $1,500 for that new TV a few years ago.
Now it’s stolen, and you file a claim. Under actual cash value, you’ll be lucky to get half of that due to depreciation. It pays only what something is worth at the time of the loss.
On the other hand, replacement cost coverage would pay to buy a new TV of similar make and model to replace the one that was lost due to a theft or other covered event. It replaces what you lost.
3. Should I “schedule my expensive gifts?
Only your agent can answer this question properly. Each situation is different, and depends upon the type of insurance policy you have, the value of your gifts, and your unique life circumstances.
What does it mean to schedule a new gift?
It simply means to assign and agree upon a specific value of an item (usually an expensive item) and then insure it for that full amount.
That usually involves an appraisal if it’s artwork, a collectible, or jewelry. Sometimes a receipt is enough to prove its value. Your agent will know.
Scheduled items are usually covered with no deductible. That could be a huge benefit to you.
Another advantage to scheduling an item is that it can provide coverage for “lost or broken” in some cases. Policies can vary, so ask your agent.
I hope you had an enjoyable Christmas with your family and friends.
I’ll see you in January.
May we all look forward to great things next year!
Bruce Sackrison's Insurance Matters: Santa doesn't need towing and rental car reimbursement, but you might
The sun sets early, and it gets cold outside at night. Are you ready in case of an accident or breakdown?
My Christmas present to you this year is to remind you of two optional coverages that you may not have.
Towing and roadside assistance
“It was a dark and stormy night.”
That famous quote from Snoopy (he stole it from another famous writer, but I digress) … is funny, unless the dark and stormy night happens to you.
How many of you are absolutely sure ... 100 percent positive … that you have towing coverage on your auto insurance policy?
A typical tow can easily cost well over $100. That’s for the easy tows over a short distance. And you’d better have the money up-front. It’s not uncommon for a tow to be well over $200.
Optional towing and roadside assistance coverage on your policy can cover all or most of a tow.
Many people assume that this is included automatically on their car insurance policy. But it’s not.
Don’t assume that you have this coverage. Call your agent today and make sure you do. Your agent will love hearing from you (I always love to hear from my customers. Most agents do.) It’s easy for them to check that you have this, and they can also wish you Happy Holidays!
Rental car reimbursement in Napa
This coverage is not automatically included with your auto insurance policy.
That’s a surprise to many people.
It’s terribly disappointing when this fact is discovered after a car accident.
Rental car reimbursement provides, with no deductible, for a rental car in case of an accident or theft. But remember, it doesn’t provide coverage for mechanical breakdowns. It’s for accidents and theft only.
Also, you must have underlying “full coverage” in order to add this endorsement (extra coverage) to your policy.
But it’s still worth it.
A typical stay in the auto body shop after an accident can be up to a week or more.
At this time of year, roads are often wet, darkness starts early, and the number of accidents is up.
If someone hits you, even though they may be at fault, it could be some time before their insurance company starts paying for your rental car.
Yes, even if they are at fault, you are likely going to have to front the money for a rental car.
Do you know if you have this coverage? It’s easy to check with your agent to be sure.
Happy holidays to you!
Before you begin driving to all of your family get-togethers, call your agent. Make sure you know your coverage. They’ll be glad you called. I know I will. And Merry Christmas!
It’s holiday gift-giving time again. It’s also time to remember how to keep those gifts safe.
I’ll share three easy ways to reduce your risk of theft, and two easy ways to make sure your gifts are insured properly while they await their intended recipient.
Three ways to keep Santa’s gifts safe
1. Don’t store gifts in the car.
I know that I touched on this a few weeks ago, but it bears repeating.
Even with the increase in online shopping, you will likely still shop at a real store. You’ll probably use your car to get there.
If your car is broken into, your auto insurance may cover the cost of damage to your vehicle, but it won’t cover the cost of the items inside.
Make sure to not store gifts in your car. Bring them inside as soon as you get home.
2. Be ninja-elf sneaky during shopping trips.
If you are on a shopping expedition, you need ninja-like strategies to keep those gifts safe while you go from store to store.
First, make sure you don’t leave your newly purchased items in plain sight. Put them in the trunk or a locked glove box.
Second, don’t rely on blankets and coats to keep things hidden. Thieves will see the coverup as an invitation and break in to investigate.
Finally, here’s a cool trick. If you’re shopping at multiple stores in the same mall, and you bring items to your car between stores, move your car between trips. Thieves look for shoppers who drop off packages and go back inside the mall.
3. Keep your home looking occupied.
It gets dark earlier at this time of year in Napa. Thieves will watch for lights out.
When your home is dark, especially during the weeks leading up to Christmas, it’s an invitation for “Bad Santa” to break in and look for gifts. They know that the gifts will be boxed and in new condition.
Two easy ways to help insure Santa’s gifts
Despite your best ninja-elf efforts, things happen. So be prepared in case of theft or loss.
1. Keep receipts and get appraisals.
You can’t properly insure what has disputable value. For most common gifts, like electronics, a receipt is usually an adequate way to prove value. Keep all receipts.
Some items, like jewelry, art, and collectibles, often need to be appraised to prove their value. Don’t neglect this step due to the busyness of the season.
2. Schedule coverage for expensive items.
Call your insurance agent as soon as you purchase expensive items, especially if they are jewelry, art, firearms, or collectibles.
Folks forget that there are often dollar limits of coverage on these types of items. These limits vary from company to company, and sometimes even from policy to policy.
Scheduled coverage (often called a “rider,” a “floater,” or an “endorsement”) can provide peace of mind. Often, “scheduling” an expensive item will eliminate deductibles, and extend coverage beyond just loss by theft or fire. It will also eliminate any surprises at claim time.
Talk to your agent this shopping season and let them help you insure your holiday gifts properly.
Do you have Thanksgiving insurance?
Of course you do! It’s called your homeowners or renters insurance.
Are you looking forward to next week’s food, family, friends and football? If so, make sure you answer these two questions before all the guests arrive:
Do you have adequate coverage for the holiday season? Have you thought about how to avoid common Thanksgiving claims?
The first question is best answered with a phone call to your agent.
I’ll help by providing a few things you should ask your agent. Then, I’ll talk about some commonly known, but often overlooked hazards that contribute to the spike in claims on holidays.
Do you have enough Thanksgiving “insurance?”
Of course, there’s no such thing as Thanksgiving insurance. But there are Thanksgiving-related claims each year that are covered by your homeowners or renters insurance.
Fires and liability claims increase during the holidays. We’re stringing small lights everywhere, lighting candles, and cooking with ovens and deep fryers… all with guests in our homes. That’s a recipe for accidents, and accidents need insurance coverage.
If you haven’t had an insurance review recently, talk to your agent, starting with these questions:
1. How much liability coverage do you have? Is it enough?
2. How much dwelling and other structures coverage do you have? Is that enough?
3. Medical payments to others — do you know your limits and what it’s for?
There are more things to cover, of course. But a quick phone call to review these three things may make a big difference if the unthinkable happens.
Do you have safety procedures in place?
It’s just better that we don’t have any claims this Thanksgiving, right?
Let’s recap a few safety tips. Refreshers are good. They can save lives and claims.
1. People risks
Too many cooks in the kitchen can cause mishaps, like accidental cuts, burns from the stove and boiling water injuries. Keep unnecessary people and pets out of the kitchen… especially the kids.
2. Property risks
Too many injuries happen because of broken pavement and broken handrails. This gets compounded by not enough lighting and slippery winter weather. Check out the dangers before company arrives.
3. Food risks
There are three biggies.
First, make sure you ask your guests about food allergies.
Second, cook all foods to proper temperature, and don’t leave leftovers out for too long.
Finally, watch out for underage drinking, or for that matter, too much drinking by any guest. You can be held responsible.
4. Accident risks
Wobbly chairs, unsecured tall furniture, and loose rugs on slippery hardwood floors… these all can be accidents waiting to happen for unsuspecting guests. An ounce of prevention … you know the rest.
And finally, my least favorite and most frightening accident, the frozen turkey in the deep fryer. Google this, and then don’t do it. Always follow all safety instructions when deep frying poultry.
I’m very thankful to have had the privilege to share my thoughts in this column for almost two years. Many of you have told me how much you appreciate the articles. Thank you and thank you to the wonderful team at the Napa Valley Register. May you all have a happy and safe Thanksgiving.
It’s bad-weather season again, and that always reminds me of auto insurance claims. They’re never fun.
As much as I enjoy spending time talking with my customers, I’d rather be talking about happy things going on in your life, and not about a tragedy.
Of course, if you have a claim, call me. It’s what I’m here for.
But read and heed these five tips, and maybe we can reduce your chances of having a claim.
1. Car break-ins: Hide your stuff.
Every time you park your car in public, assume that someone will come by five minutes later looking for goodies you left behind.
Goodies like your laptop, your purse, or your recent purchase from another store.
Hide your stuff.
Hiding things in the trunk is a great idea, or under seats. Better yet, take expensive things with you and don’t leave them in your car at all.
The fringe benefit is a clean car, and that’s not bad either!
2. Parked car damage: Choose your parking like a pro.
Thinking of squeezing into that ridiculously tight spot because it’s closer?
Don’t do it.
Not everyone is as skilled a driver as you, and you may come back to find your car dented, and the other driver gone. They often don’t leave a note, so the claim is on you.
Another idea: clear out that second stall in your garage and use it for your car instead of storage.
Every car you can park off street is a car less likely to get damaged in the middle of the night.
3. Windshield damage: Count more car lengths.
We think of rocks hitting the windshield as “an act of God.”
We feel that it’s not our fault. And interestingly, so does the insurance company. That’s why it’s covered under the “Comprehensive” part of your policy.
But if you drive defensively, you can reduce the chances of this happening.
How? Be aware of what’s on the road.
If you are driving on a gravel road, or if there is debris on the road, stay even farther back than normal from the vehicle in front of you. Let gravity work for you.
Stay back, and let that rock the guy in front of you kicked up fall beneath your wheels instead of smashing into your windshield.
4. Rear-end collisions: Save that text for later.
Distracted driving may catch up with you some day. And that will be a bad day.
Whether it’s texting, or a phone call, or fumbling with the burger you just picked up from the drive-thru... distractions cause rear-end collisions.
Rear-end collisions are almost always preventable. Turn your phone off and deal with it after you stop.
Also, eat in a restaurant, not the driver’s seat. It’s safer, better for your digestion, and your pants will thank you for not dripping mustard on them
5. Back-up accidents: Look again and then look again.
Finally, start a new habit. Look before backing up.
I don’t mean glance in the mirror for a nano-second. I mean, turn your head around and take a good long look behind your vehicle before you put it in gear.
Then look again.
It’s often that second look that saves a claim... or a life.
This is a difficult column for me to write. There are no adequate words to describe the sadness we all share for friends and neighbors affected by the fires.
The Atlas Fire and other fires surrounding us in Napa, as well as fires in neighboring counties, may end up being the worst in memory. We don’t know, and as I write this column, the smoke is still rising.
Please share these seven steps with anyone who has been affected.
And consider saving this article link and referring to it in case you ever find yourself in the same tragic situation.
Step 1: Call your insurance agent
If you have a local agent, call him or her.
If you don’t have a local agent, call your insurance company. But still consider calling a local agent referred to you by a friend.
Why is this the first step?
A local insurance agent will know what special claims procedures may be in place during this large-scale disaster. They can also provide needed emotional support to navigate the difficult process of getting back to financial normal.
Step 2: File your claim right away
When disasters on a large scale happen, the claims system gets overwhelmed.
Even though it’s “all hands-on deck” at the insurance company, everything will take longer. Sure, they will add staff and eventually everyone will receive excellent care. But make sure you are standing in line early.
Step 3: Document everything
Take good notes and lots of pictures. Dates and times matter too. If you have inventory lists of all your belongings, property improvements and valuations… great. But most folks don’t.
So start writing things down now. Don’t wait.
Step 4: Secure your property
Do this only after it is completely safe to return, and only if you are capable of doing so.
Preventing further damage is one of your responsibilities under most policies. But you may need help to do this… don’t be afraid to ask for it.
That’s what neighbors and friends are for.
Step 5: Keep making your payments
Don’t forget to pay your mortgage and your insurance premiums, even if your property is a complete loss. This is one of the most common mistakes folks make after losing everything in a fire.
Step 6: Keep track of additional living expenses
If you’ve taken refuge in a hotel or motel, keep receipts. All of them. Also keep receipts for meals, personal care items, and clothing.
Most policies provide for Additional Living Expenses (ALE) and many policies provide this benefit for a long period of time if necessary. So keep a record of everything.
Step 7: Don’t settle early
In the case of natural disasters, some insurance companies disburse checks quickly to help with immediate needs.
That’s great if they do that. But watch for language accompanying each check, and make sure you are not unknowingly closing the claim by accepting the check.
You don’t have to “settle” right away.
If you are reeling from this tragedy, you’ll need help to navigate the insurance claims process.
Don’t go it alone. There is a community ready to help.