Home Insurance Claims Procedures

A checklist with five boxes, four of which are checked.

Thankfully, only about 6% of insured homes will open a claim in any given year. According to the Insurance Information Institute, the most common home insurance claims are Wind/Hail Damage, Fire/Lightning Damage, Water/Ice Damage, and Theft/Vandalism. Knowing what to do for each type of claim will help the homeowner through the process and ensure that the carrier doesn’t deny the claim due to a mistake made along the way.

According to typical property insurance policy conditions, the acronym PINES is a useful tool homeowners can use to remind themselves what they must do according to typical property policy conditions. And remember that the homeowner may make temporary and necessary repairs but must wait to begin permanent repairs until after they are approved by their insurance company. The National Alliance for Insurance Education and Research uses the following acronym to help agents and clients alike remember what is important during a claims process.

P Protect the property from further damage.
I Inventory the damaged property.
N Notify the insurance company.
E Exhibit the property to the adjuster.
S Submit a sworn statement.

TYPES OF HOMEOWNER INSURANCE COVERAGES

  • Actual Cash Value, or ACV: covers the value of your home and property AFTER depreciation, which figures what the items are worth today, not what they cost brand new.
  • Replacement Cost: covers the ACV of your property WITHOUT depreciation.
  • Extended Replacement Cost/Value: only a few carriers offer this, but it provides inflation cost protection, typically up to 20% above your policy limits.


WIND or HAIL DAMAGE

Per iii.org, this is the most common property damage claim, affecting about 1 in 35 insured homes. The average claim costs $11,695 to repair. These claims can also involve your home’s siding, windows, and gutters.

  1. Document the damage. If possible, include photos that show hail size along with damage caused.
  2. Submit your claim by contacting your insurance agent or carrier.
  3. Reach out to local contractors to collect repair estimates.
  4. Schedule a time to meet with the insurance adjuster.
  5. Have a contractor make necessary repairs.


WATER or ICE DAMAGE

1 in 60 insured homes will suffer some sort of water or ice damage in any given year, costing them on average $11,650 per claim. These claims become more commonplace in colder northern climates, especially in houses that often don’t have adequate ventilation and insulation to prevent ice dams. It is important to review your policies to know what is covered. However, most policies cover sudden and accidental damage that originates inside your home or from storm or weather-related openings.

  1. Move undamaged items to a safe location to prevent additional damage to belongings.
  2. Stop the leak to prevent damage from getting worse.
  3. File a claim right away. The sooner the claim is made, the sooner you will be able to get money for repairs and get back into your home.
  4. Take note of all damage to home and property. This involves taking photos of the affected area accompanied with a list of items damaged. Keeping a detailed list with photos of the contents inside your home will make it easier to identify what was damaged.
  5. Contact water remediation specialists in your area to begin the process of removing the water and drying out your house as soon as possible.

To avoid confusion, don’t use the term “flood insurance” when placing your claim. Flood damage is not covered by a standard home policy. Instead, use the term “water damage” and let the insurance adjuster confirm the source of the damage when they come to investigate the incident.


FIRE or SMOKE DAMAGE

Only 1 in 385 insured homes will suffer this type of loss each year. But these claims cost an average of $77,340, the most of any home insurance claim. Whether it is a total or partial loss due to fire or smoke damage that requires professional cleaning or repair, fires can be a very traumatic experience to go through. Once the immediate danger and concern for the safety of those involved has been taken care of, follow these steps to help with what can be a very tricky claims process.

  1. Contact your agent to file a claim as quickly as possible.
  2. Document your losses with photos, videos of your home, and belongings that were lost or damaged.
  3. Secure Your property from further damage or theft. Board up any openings so water, animals or thieves can’t enter the structure.
  4. Meet with the adjuster and document everything the two of you discuss.
  5. Verify your home insurance coverage by meeting with your insurance agent to go over your policy to know what, exactly, your policy covers and what the limits for each type of coverage are.
  6. Get repair estimates from licensed and insured contractors that specialize in this type of work. Even if the adjuster has a company in mind, seek estimates from others.
  7. Ask if your home insurance also pays for temporary housing or if an advance on the claim payout is possible if the damage will prevent you from returning to your home until repairs are completed.


THEFT or VANDALISM

This only affects 1 in 525 insured homes, costing an average of $4,415 per claim. Your coverage depends on your specific policy, but all such occurrences should follow these steps to help get prompt and timely closure on this traumatic violation of privacy.

  1. Report the crime to police.
  2. If any damage occurred, make emergency repairs as quickly as possible.
  3. Build a list of all missing property and document all damage with photos and videos.
  4. Document the brand/model of each item stolen.
  5. Estimated value of each stolen item.
  6. Share any purchase receipts or information that shows where or when it was purchased.
  7. Contact your insurance agent to begin the claims process.

SHOULD YOU PLACE A CLAIM?

If the damage or loss will cost more than the deductible, it is probably prudent to place a claim. But how much more is a decision you will need to make for yourself. Just remember that any claim on your home insurance policy increases the likelihood that your policy premiums will increase upon renewal. If the damage is minor and you can make repairs yourself, if no one was injured, or if repair costs are less than your deductible, it may not be wise to place a claim.

HOW QUICKLY SHOULD A CLAIM BE PLACED?

In most cases, placing a claim as quickly as possible is the correct course of action. Most carriers require claims to be filed within one year of loss, but this can vary by carrier and by state. Once a claim is filed, most carriers require work to be completed within two years. Make sure to return all documents in a timely manner to expedite the payout process. The insurance carrier is usually required to adhere to certain timelines for each step of the claim. 10 business days to acknowledge the claim and begin paperwork, 30 business days to rule on claim, and 5 business days to make final payment after approval of claim.

Use these home insurance claim procedures to make an already stressful situation from becoming worse. Additional information and support is found at www.mn.gov that includes answers some of the commonly asked questions.

Hopefully, you never have to go through a home insurance claim. But if you do, it will be imperative that your insurance agent walks with you, step-by-step, through the entire process. You should never have to go through any insurance claims process by yourself. If you have any questions about your homeowners insurance and don’t know where to turn, contact Reliable Agency today! We’ll offer the support and guidance you deserve.

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