Finding Normal After the Disaster: Insurance

Finding Normal After the Disaster: Insurance
 

Navigating insurance before and after disaster

October 1, 2013 by Staci Giordullo and Lisa Renze-Rhodes

Homeowners insurance plays a paramount role in the disaster recovery process. The extent of the coverage your policy offers can make or break the experience. If you lose your house, will insurance pay for your hotel bill? Will it cover the cost of rental furniture? What about a cellphone bill that’s exceeded its limit during this time of crisis? If you don’t know, our highly rated insurance agents recommend finding out sooner rather than later. Review your policy annually, and follow these expert tips from highly rated providers on Angie’s List:

File a claim ASAP

When a storm causes major damage to your home, contact your insurer immediately, says Ken Henry of Henry Insurance Agency in Cincinnati. “If you have a disaster strike in the middle of the night, don’t wait until morning; report it in the middle of the night.”

Prevent further damage

Protect or repair what you can. “Keep all receipts [for materials] to give to your adjuster,” says Bodie Spangler of James Zander & Associates in Dallas. Once you report a claim, an adjuster should make contact and follow up with an on-site visit in a few days.

Document the destruction

“Photograph your home inside and outside,” says Deva Neidinger of Hartselle Insurance in Seminole, Fla. “Cellphones with a camera — that’s perfect. Document every detail for the adjuster.”

Pay the mortgage

“If your home is completely destroyed, keep paying your mortgage to avoid negative credit ratings or default on the loan,” says Herb Monson of Herb Monson Agency in Burnsville, Minn. Check with your insurance agent and bank to see what’s covered and what’s negotiable.

Be patient

Don’t rush to decide what to do next, Neidinger says. “Be diligent, get a second opinion, and have a well-thought-out plan. Before signing any contract, check with the BBB, look on the web, check Angie’s List, ask for referrals. Make sure the contractor you hire is licensed, bonded, insured and preferably local.”

Don’t rush to settle your claim

Policyholders have the right, says Bettye Foy, chief deputy commissioner at the Indiana Department of Insurance, to negotiate for more support from a claim. If discussions with the insurance company don’t go well, homeowners may file a complaint with their state’s insurance department.

Inventory before a disaster

“I recommend clients walk room to room with a video camera and open drawers and closets and say what you see — ‘47 pairs of shoes,’ ‘Grandma’s silver service’, or ‘three juicers and a waffle maker,’” Henry says, then store the list off-site.

Review your coverage

Upgrade your policy to cover cost overruns, says Joshua Lavine, president of Capitol Benefits in Gaithersburg, Md. “It’s important that your policy include additional replacement cost of 25 percent or more on the building,” he says. “Oftentimes after a major disaster, there are unforeseen expenses that drive the cost to rebuild.”

Notify your agent

When making more than $20,000 worth of upgrades or changes to your home, alert your agent, says Kent Shaffer of Indiana Farm Bureau Insurance in Indianapolis. Some changes require specific policy add-ons, he says, such as coverage for basement water damage from flooding.

Consider flood insurance

“Even if you think you won’t need it,” says Steve Weisbart of the Insurance Information Institute. Ask your agent about flood coverage offered only through the National Flood Insurance Program. “People tend to approach flooding problems by thinking if you’re not near a river or ocean, you can’t be hurt,” he says. “However, there can be heavy rainstorms that create floods and cause damage.”

Homeowners living in flood hazard areas should be aware that as of Oct. 1, 2013, as outlined in the 2012 Biggert Waters Flood Insurance Reform Act, rates on subsidized policies will begin to increase at 25 percent annually, until what the industry calls "true risk" is realized. This affects a relatively low part of the population, as FEMA experts say only 20 percent of NFIP policies receive any type of subsidy. Still, the take away for homeowners — or those who may be looking to buy a home in a flood plain — is that the true cost of the policy won't be known for possibly as long as five years, so make sure to ask your insurance agent or real estate professional to determine actual expense.

If you need guidance on who to contact for repairs, members should call the Angie’s List Call Center at 877-648-2448 for help or scheduling appointments.

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