With all the extreme weather and related property losses last year, many homeowners learned the hard way about how the insurance claim process doesn’t always work as expected. In disaster situations, a single storm can cause damage and affect the lives of thousands of people. Everyone experiences property losses at the same time, which complicates the situation for homeowners and the insurers.
www.Insure.com, the nation’s most-cited independent insurance website, recently addressed the critical issues that most homeowners and homebuyers don’t often – but should – have to worry about. Here are their top 10 concerns to keep in mind:
1. FEMA only pays for temporary living expenses.
In a disaster like Hurricane Sandy, grants are made available but claims still need to be made through the homeowner’s primary insurance company. Most FEMA payments are meant to help the victims get through the disaster with shelter and temporary assistance, and not meant to actually replace their destroyed homes. Reviewing past building permits in a www.Housefax.com Property History Report is one way to see how a home may have fared through past weather-related disasters.
2. One storm can be categorized as multiple events requiring separate deductibles.
In what seemed like one big storm in Oklahoma last May, some insurers counted multiple tornados as separate incidents. Many homeowners were thus charged with more than one deductible. Homeowners should be aware of this with their own financial planning, and homebuyers reviewing a home’s claim history should be aware of this possibility where it takes more than one “fix” to get the house back in shape after destructive weather damage.
3. There is a 30-day waiting period for flood insurance to kick in.
After all the flooding in 2013, many more people today know that flood insurance must be purchased separately above and beyond a regular home insurance policy. What many people still don’t realize is that such insurance requires a 30-day waiting period to go into effect. Some people actually buy flood insurance when they think a storm is coming, and find out later that their policy hadn’t kicked in when the waters start to rise.
4. Catastrophe claims take a long time.
Most people who experience weather-related property damage file their claims immediately. But since so many are doing so all at once, it tends to gum up the insurance companies’ processes. Patience is the key.
5. Catastrophe adjusters can change frequently so document everything.
During actual disasters, insurance companies are so inundated with claims that they have to hire contractors to augment their adjuster teams. They are not full-time employees and may not be there for the follow-through, so Insure.com recommends that homeowners carefully document everything in case their file changes hands between adjusters.
6. Volunteers can remove items and make it hard to get claims paid.
When well-meaning volunteers jump in to help remove debris from damaged homes, it can create havoc when a homeowner tries to present an inventory of losses to their insurance company. Many claimable damaged items get removed during cleanup and are harder to account for as a result. Try to make a list and photograph damaged items before they’re removed.
7. Extreme weather events are occurring more frequently.
Literally thousands of weather records were broken over the last two years. With more damage and losses than ever, insurance rates are going nowhere but up. People buying homes should do a careful study on the history of the properties they’re considering to better understand the potential risks and insurance costs.
8. Many people are underinsured for storm damage.
Thousands were unable to rebuild after weather-related incidents over the last two years because they didn’t have adequate insurance. It’s recommended that homeowners and prospective homebuyers alike get second opinions on the replacement value of the home so they can make sure that they get the proper coverage.
9. Wildfires are treated like regular fires.
Unlike floods where a broken water pipe in a house can be covered by regular homeowners insurance while external flood-related damage may not be, fires are just fires. Whether started in the kitchen or from an out-of-control forest fire, insurance claims don’t distinguish. The problem with wildfires is that they most often result in total destruction of the homes in their path.
10. Homeowners may need to hire an engineer after a weather disaster.
Weather claims can cause conflicts about what damage was caused by the storm versus what was pre-existing. A homeowner needs an engineer to document that the damage they want covered was caused by the event (and not just existing “settling” of the foundation, for instance, that happened before the tornados ripped through Moore, Okla.)
After any weather-related damage, homeowners should notify their insurers immediately, and document and photograph the damage as much as possible. Prospective homebuyers can do their own “Buyer Aware” diligence by researching past disasters in the area that may have affected the home they are considering buying, and review the Housefax Property History Report to not only corroborate any damage, claims and repairs that were made, but to get a sense of the home’s vulnerability to floods, hail, wind, tornadoes and the statistical likelihood of other extreme weather damage in the area.