The Retirement Corporation of America

Settling a Homeowner's Claim

IT'S YOUR RESPONSIBILITY to do as much as you can to protect your house from being damaged and your property from being stolen in the first place.

For example, if you live where it's cold in the wintertime and go someplace warm until spring but forget to turn off your water pipes, your insurer won't pay for the damage if your pipes freeze. By the same token, don't expect to be paid for damages to your house because of faulty construction or because you didn't take reasonable precautions before a hurricane by boarding up your windows.

Other kinds of losses an insurer may not pay for unless you took precautions:

•  Vandalism or theft if you leave your house vacant for more than 30 days.

•  Possessions ruined by repeated water seepage. If it happens once, you're probably covered under a standard policy but maybe not if you don't fix the problem and it happens again.

•  Damage caused by power failures that affected other people besides you.

•  Losses because you failed to keep up regular kinds of maintenance—like keeping bushes away from your house in an area prone to wildfires.

•  Damage caused by not bolting your house to the foundation in earthquake zones.

Document Damage to Your Property

Take pictures or videotape any damage to your house before cleaning up after a bad storm. And take good close-ups that reveal as much of the damage as possible. It always looks less severe in photos than it actually may have been.

The more proof you have that you weren't the only one affected by a disaster the better. Keep newspapers describing the storm. Videotape the television news coverage. Take pictures of the damage it did to other houses in your neighborhood.

Keep track of the time you and others spend cleaning up. Most insurers reimburse you for the work you have to put in, as well as the cost of hiring outside help.

Once you've nailed down the extent of the damage, file your claim promptly. Don't let your agent discourage you from filing because doing so will make your premiums go up.

Negotiating With Your Insurer

Be patient. The company may pressure you to settle up as soon as possible. There's no reason for you to do that and it could cost you plenty. Here are some other tips:

•  Notify your insurer right away that you intend to file a claim. Don't put any dollar amount on it. Simply say the damage will exceed your deductible. By law, your insurer has to respond in about 15 days.

•  If you can't live in your house, ask the carrier to write you a check immediately for temporary living expenses.

•  You're required to do whatever is necessary to protect your home from further damage from theft or vandalism. That may mean boarding up windows and doors, for example.

•  Don't accept your insurer's first settlement offer. It's likely to be a lowball amount with the company hoping you'll take it and go away.

•  Check with your neighbors to see how much they are being offered for similar damage.

•  Get a couple of estimates from reputable contractors of how much the repairs will cost.

•  Bring in your own independent adjuster to haggle with the insurance company for you. A so-called public adjuster represents your interests.

•  Get copies of any police damage reports.

•  Reconstruct any records documenting your damage that were lost in the disaster. If your home was completely destroyed, get your most recent property assessment from the local court house. Or contact your mortgage holder or a lender who's given you a home equity loan lately. A local Realtor can tell you what similar homes have been selling for.

•  If you've lost receipts or appraisals for valuables, skim the classified ads in newspapers or look at catalogs for the prices of similar items. See if you can persuade stores to give you sample receipts. Revisit appraisers and ask for copies of the appraisals they did for you if they have them.

•  Keep all of your letters from the insurance company and take notes when you're talking to its adjuster, including the adjuster's name and when your conversations took place.

•  Before you accept a final settlement, compare it with your inventory list. Keep appealing your claim higher up in the company if you aren't satisfied with what you are being offered.

•  If time drags on and you still haven't reached a settlement, call the state insurance department. It may not help you much, but at least your complaint will be on the record.

If all else fails and your claim is a big one, consider suing the insurance company. If it's the only way you can come out of a catastrophe financially whole, it may be worth it.