"Be prepared" is a motto that rings true for homeowners as much as Boy Scouts, especially when it comes to disaster insurance claims. Hurricanes, floods, earthquakes, and tornadoes strike with little warning. The aftermath can be devastating. The time to get your insurance in order is before one of these calamities ravages your house and ruins your possessions.
By doing so you can have everything you need in a safe place and know exactly what steps to take to restore your life to normal as quickly as possible. Keeping detailed records and important policy information ready and accessible can make a big difference in facilitating your disaster insurance claims during an intensely stressful time.
During the Calm Before the Storm
Create a home inventory. Every homeowner should record images of a house and its contents. Photographs, either print or digital, are fine, but insurance consultant Jack Hungelmann favors video because audio descriptions of items can be included. Store a copy of the images off-site, perhaps in a safe-deposit box, in case your home is destroyed in a disaster.
Hungelmann, author of "Insurance for Dummies," suggests using an online backup service like IBackup for storing digital media. If you're reluctant to spend up to $50 or more per month on a backup service, save a copy on a portable data-storage drive, says Kelan J. Vorbach, an insurance representative with John B. Wright Insurance in Manasquan, N.J. Keep the drive in a pre-packed emergency "go bag," which contains the essentials your family needs in case you must flee on short notice.
Check your coverage. Once you have a good inventory of your possessions, review your homeowners insurance, as well as any supplemental disaster policies, to ensure that you're covered for their full value, says Marisa Alonso, a representative with Allstate in Silver Spring, Md.
Be sure you're covered too for the replacement value of your home—the cost to rebuild it—which could run into six or even seven figures. Also find out what provisions the insurer makes for inflated price of materials in post-disaster regions. Vorbach says that he has seen the price of plywood double in some regions that were rebuilding after natural disasters.
Compile a "go-sheet." Create a one-page document with all of your policy and account numbers, as well as the phone numbers of your local agents and the main phone numbers of the insurers, Vorbach suggests. That way, if your local insurance agent isn't able to help you because of his or her own disaster damage, you can try the insurer directly. Also include contact information for entities like your bank and mortgage company, which you may need to reach out to eventually.
Responding Once Disaster Strikes
Contact your insurer. Call your insurance agent as quickly as possible. Big insurance companies often dispatch catastrophe units to handle large-scale disasters. Also ask the insurer for the catastrophe claim number for the event in your region. If there is one be sure to include it with all of your communications. This will help expedite your claim. Brace yourself for reams of paperwork. Vorbach suggests that if you don't have a home inventory to support your claim, ask friends and family members for pictures or videos taken in your home.
Secure the property. After inspecting the damage and taking photographs or video, it's your responsibility to secure a property. That may include putting a waterproof tarp on the roof to prevent further water infiltration, or boarding up doors and windows that have been damaged. If you don't, Hungelmann says, insurers may deny some claims on the basis that it can't be determined what was damaged during the disaster and what was damaged afterward. An inch of water can cause $7,800 in damage.
Leave negotiations to the adjuster. You should monitor an adjuster's negotiations with contractors, but avoid getting in between the two, Hungelmann advises. Instead, let the adjuster work directly with contractors. Alonso, the Allstate rep, adds that it's often a good idea to work with the insurer's approved contractors, especially when the insurer guarantees the work. Otherwise, she warns, homeowners may run the risk of hiring contractors who try to jack up charges after the adjuster has settled on an amount.
Get everything in writing. You may be overwhelmed, says Hungelmann, but it's important to keep a record of all correspondence with the insurance company, the adjuster, contractors, and anyone else involved in your claim. Record dates, times, and details of phone conversations in a log, keep copies of email correspondence, and get all estimates in writing.