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• What do I do when I have a claim?
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 What do I do when I have a claim?

Answers:

You should take all steps necessary to prevent further damage -- securing property, temporarily boarding windows and roof, drying out carpets and personal property, etc. If the insured does not do this and further damage results, it may not be covered.

You should not undertake any permanent repairs, nor dispose of any damaged property before an adjuster has been able to see the damage. In the case of perishable items (i.e., food) that must be disposed of, first take photographs of that property to substantiate the claim. If you do not comply with this requirement, some damages may not be covered. You should retain all receipts for emergency repairs and for items which might qualify under business interruption or additional living expenses (such as water, ice, rental charges at another location if the business or home is uninhabitable, etc.).

Although the adjuster will contact you as soon as possible, priority will be given to the most severe losses. Also be aware that larger claims will be settled in stages, not all at once. While waiting for the adjuster, there are a number of things you can do:

• You may wish to secure a repair estimate (preferably at least two) for the adjuster to review. This will help the adjuster with the settlement process.
• Take pictures of the damaged property. If you have pictures of the property before the loss, these should be provided to the adjuster.
• Make a list of all damaged property, including a description, age, original cost, place of purchase and estimated replacement cost. Any receipts or canceled checks for these items should also be included.
• When ownership, purchase or accounting records have been destroyed, sometimes it’s possible to reconstruct those records by working with one’s accountant or bookkeeper – suppliers, vendors or others.
• The insurance adjuster will work with you and make helpful suggestions to assist in this process.
• If you have trouble, contact your agent before hiring a “public adjuster”.
• Public Adjusters are important in some cases, but it’s always best to seek help from the free resources available from your agent and the actual insurance company.
• And don’t forget, as a consumer, the Department of Insurance is also a good and free resource.

Under most business peoperty policies and also under most homeowners and dwelling policies, coverage is provided for Business Interruption or Additional Living Expenses. If the home or business is uninhabitable due to a covered peril and you must temporarily relocate, most policies will reimburse for the reasonable expenses incurred over and above your normal costs. For example, it would probably cover all reasonable housing expenses since you will be paying a mortgage payment, but would only cover food expenses over and above what the policyholder normally would pay for food.

It is imperative that you retain all receipts for these expenses in order for them to be considered as a part of the loss. The expenses must be in line with normal living costs and must be a necessary and direct result of the loss.

Most policies limit recovery under Additional Living Expenses to a percentage of the amount of coverage on the home itself and on business insurance policies, to a specified amount of coverage, if the coverage has been requested by the policyholder.

There is no coverage under standard dwelling and homeowners policies for damage to trees by "weather perils" (such as wind). However, if the tree falls and causes damage to some other type of covered property (such as a house or fence), the damage to the house or fence would be covered. Separate windstorm coverage can be purchased as an added endorsement.

Generally, most residential policies do not cover food spoilage resulting from power outages due to the "Power Failure" exclusion. A small number of companies provide some very limited coverage (i.e., $250 - $500) as a coverage enhancement. Aside from this, coverage is generally not available.

Most homeowners policies provide coverage as "sudden and accidental damage from artificially generated electrical current"; however, coverage does not apply to loss of transistors, computer chips and similar items. Therefore, damage from a power surge would not typically be covered for property such as televisions, VCRs, computers or similar items.

After the adjuster has visited the insured, he must complete detailed paperwork on the loss which is subsequently submitted to the carrier for review. After everything has been checked, the carrier will issue the claims draft to the insured. If the adjuster is carrying a heavy claim load, there is often quite a delay in completing the paperwork by the adjuster, since they generally must do this at night, as well as the delay at the company as it deals with (in some extreme cases), thousands of claims to review at one time. Often, you or your insurance agent can check with the adjuster to find out exactly when the paperwork was submitted to the carrier. If the papers have been sent in, the company may also be able to provide a status report.

If the check is for a lower amount than the insured expected, it is usually due to policy terms that require settlement on an actual cash basis with replacement cost being paid at the time repairs or replacement are actually completed. Check with your agent or company.

If the policy indicates that settlement will be on a replacement cost basis, then payment will be made for the actual cost to repair or replace at today's prices, limited only by the total amount of coverage that was purchased. If the adjustment basis is actual cash value, settlement will be made by determining the replacement cost at today's prices and subtracting from that amount a reasonable amount for depreciation, age or obsolescence.

This policy covers only one peril -- damage from flooding (including rising waters, mud slides and certain damages from erosion). Not all flood policies cover both building and contents. Additionally, all flood policies carry a deductible that applies separately to both building and contents losses. There are many types of property that are not covered under a flood policy, including property in the open, certain property in basements, trees, plants and shrubs, driveways, foundations, piers, sidewalks, docks, etc. Also, there are other types of property for which coverage is provided for only a very limited amount (for example, $250 for jewelry, furs, silver, gold, fine arts and similar items). Reimbursement for additional living expenses is not provided under the flood policy.

Replacement coverage is provided under the flood policy for dwellings only if the home is the primary residence of the insured and is insured for at least 80% of its replacement cost (or the maximum available under the program). All other losses are adjusted on an actual cash value basis, including losses to contents, and losses to other items such as carpeting, antennas, awnings, appliances and miscellaneous outdoor equipment.

Unfortunately, many people discover they are not eligible for replacement coverage on their building due to under-insurance. Quite often, they only purchase this coverage at the time they are closing on a home because the lender requires it. Generally, they purchase only enough coverage to satisfy the mortgagee, rarely update this amount and often don't purchase coverage for their contents.