How to Settle a Property Damage Claim

Settling property damage claims with your insurance company may seem to be somewhat simple. You make a claim; the adjuster comes out and you get a settlement check. Easy right? Wrong. When disaster strikes is not the time for trial and error.

Things You'll Need

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Instructions

1. A most important step after a disaster is knowing your insurance policy delimiters. Have a copy of your policy stored in a fire safe or safety deposit box. It is also a good idea to keep purchase receipts from valuables, antiques, electronics, etc. in this same location.

2. At the time of your insurance policy selection be sure that your policy is clearly explained to you and that the coverage is in excess of what you currently own. It is remarkable how quickly replacement costs accumulate. You do not want to be underinsured!

   Note that antiques are an addition to the basic homeowner policy.

   Periodic policy evaluations and if necessary, limit increases are recommended.

   Also, know what the policy deduction is and make sure that it is a realistic amount of money that you can pay if needed.

   Flood and earthquake insurance is also not included in most basic homeowner policies. You need to inquire about these and other riders when deciding upon your policy.

3. When damage occurs, you will want to contact your insurance company as quickly as possible. You may need to call a contractor for emergency services for damage control. It is best to call a contractor that specializes in emergency services and/or that is experienced in insurance billing.

   Insurance companies generally expect to pay a higher cost for emergency services. Your contractor should bill them directly.

4. Many policy holders refrain from reporting damage to their property as they believe that their insurance premiums will increase. In my experience, I would not recommend making multiple claims especially within a narrow time frame. Homeowners may have their policies cancelled. I would recommend making claims on high dollar damages.

5. When you have a claim to report, call your insurance policies claim department. If you do not have the contact information, your insurance agent will be able to direct you.

   Provide them with overall details of your damage and set an appointment for an adjuster to visit your premises. This may happen relatively quickly but be prepared to wait if a state wide emergency is declared.

6. You do not necessarily have to have a contractor at this point.

   The adjustor will most likely take measurements of the damaged area and take notes and pictures. In some instances they may even issue checks for full or partial payment on the claim.

   It is ok to accept these checks but I would not recommend signing anything at this point.

7. Remember that it is the insurance companies business to insure your property. In other words, it is their obligation to pay for your damaged property but it is a business hence they are in it to make money. They will pay minimums unless challenged.

   This is when you may need professional assistance. Public adjusters are experienced at settling claims. They usually charge a percentage of the claim. Sometimes they handle personal property but not always. You can find public adjusters in your local phone book.

   Some contractors settle insurance claims.

   If in settlement you require legal assistance, contact an attorney that has experience in claims negotiation most likely bad faith claims.

Tips & Warnings

• It may be tempting to settle quickly with your insurance company but this may hurt you in the long run. Insurance companies pay overhead at 10% and profit at 10% but only when you have a contractor.

• It may cost you a percentage of your claim to use the services of a public adjuster but they have the experience, the price lists and the estimating software that will ultimately get you a much higher settlement. Their services pay for themselves and save you much time and headache.

• When using a public adjuster or contractor be sure to ask for licensing.

• Do not pay your public adjuster or contractor from your personal funds on insurance settlement jobs. They will be compensated by the insurance company direct.

• If you make change orders on the job, be prepared to sign a change order contract with your contractor and pay for this work from your personal funds.