Homeowners/Renters Claims

Be aware that filing a claim may affect your future premiums. If the cost of repair is not much higher than your deductible, it may be more cost-effective in the long run not to file a claim.

The intent of an insurance policy is to protect you from financial loss when disaster strikes. It is the policyholder's obligation to prove the cause and extent of the damage. It is not the insurer's responsibility to act as a general contractor, find contractors who can do repairs, inventory your personal property, or find you temporary lodging; the insurer's obligation is to compensate you for damages to the extent that they are covered by the policy.

File a police report - if the loss is from theft, or your home was vandalized or robbed, the policy requires you to report it promptly to the police.

Take steps to protect property from further damage - make temporary repairs to protect property from further damage. Homeowners policies generally will cover the cost of temporary repairs; keep a record of their cost. Permanent repairs should wait until the insurance adjuster has had a chance to inspect the damage, or the claim may be denied. If possible, take photos or videos of the damage before making any repairs.

Prepare a list of lost or damaged items - it is up to the insured to provide a complete list of the damaged items being claimed. The information required by the company includes details such as the make/model or brand, where and when it was purchased, and its cost in order to determine how much the company will pay.

Keep receipts of additional living expenses - your homeowners or renters policy will generally pay the differences between your before- and after-loss expenses when your residence is uninhabitable because of a covered cause of loss. You will need to document your usual costs (mortgage or rent, utilities, food, heating) and those you incur after a loss; the insurer will pay the difference between them, minus any non-continuing expenses. For example, your usual grocery cost would not continue if you are eating most meals at restaurants while displaced; your insurer would pay the cost that exceeds your usual cost of food.

Checks made out to mortgagee - if you have a mortgage, the check for repairs will generally be made out to both you and your lender. Lenders often will put the money in an escrow account (for large claims) and pay for repairs as work is completed.

Contractor's estimate - you should require from your contractor a detailed estimate with cost, scope of work and materials clearly spelled out. Invoices also must be detailed so the insurer can see that the work being done is in line with the policy coverage. An invoice showing $5,000 "to repair water damage" is not detailed. The estimate or invoice should itemize how many square feet of sheetrock was removed/replaced, how much insulation, how many coats of paint were applied, for example.

Replacement cost - the first payment is on an ACV basis, the cost of repair or replacement less depreciation. Most insurers require repairs to be completed, or replacement items actually purchased, before you are reimbursed for the full replacement cost. Check with your adjuster for how much time you have to replace items and receive reimbursement. Keep your receipts to prove your purchases.

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