For many people whose homes have been ravaged by a hurricane or tropical storm, the trauma is soon followed by another major source of stress: dealing with their insurance company to file a claim.
According to the National Oceanic and Atmospheric Administration, by 2021 the U.S. will experience 20 separate weather and climate disasters costing $1 billion, with a total cost of $145 billion. Individual homeowners whose properties are hit by a hurricane can sustain tens of thousands of dollars in damage, or even more, depending on the severity of the storm.
And the remnants of Tropical Storm Hilary were delivered record-breaking rainfall to Southern California this week, flooding roads and causing mudslides, and could also cause flooding in Oregon and Idaho.
Knowing the basics of homeowners insurance and filing a claim can help you avoid some pitfalls when disaster strikes. For example, such insurance typically covers damage from high winds, but some policies do not cover storms. Typically, property owners have separate deductibles for hurricanes, so it pays to check what your policy covers — and, just as importantly, what it doesn’t — before a storm hits, experts say.
“It’s smart to look at it when you renew,” Vince Perri, founder and CEO of Elite Resolutions and a claims adjuster, told CBS MoneyWatch.
Here’s what you need to know about hurricane insurance and how to deal with your insurer after a disaster.
Check your hurricane deductible
The deductible in hurricanes is typically between 2% and 10% of your home’s total value. But in hurricane-prone areas, such as Florida, where Perri is based, he recommends getting a lower deductible because of the risk of high deductibles in the event of a disaster.
“Someone sent me a policy for review and he was going to go for 10%. I told him, ‘Don’t do that, because unfortunately we get hurricanes all the time,'” he said.
For example, a $400,000 home with a 10% deductible could face an out-of-pocket expense of $40,000 if the property were swept away. Opting for a lower deductible can reduce the additional costs, but can lead to financial disaster in the event of serious damage.
“You want a 2% deductible when it comes to hurricanes,” Perri advised.
Document your home before the storm
Once a year, homeowners should walk around their property and take photos to document the condition of their home, Perri recommended. Taking this step will help you after a storm because you can prove to your insurer that the damage was actually caused by the hurricane.
“If there’s a storm, the insurance company may want to say that the damage they’re seeing isn’t a result of the hurricane, it was already there,” he noted. “Having proof can help you tremendously.”
Take photos immediately after a hurricane
After a storm, take photos of the damage as soon as possible to capture the immediate aftermath of the hurricane. According to a provision in homeowners insurance called “Duties After Loss,” this is typically part of a homeowner’s responsibility after a disaster.
Other steps you must take under this clause include filing a claim immediately, protecting the property from further damage and authorizing the insurance company to inspect your property. Check your policy to make sure you understand your obligations in the event of a storm.
Submit your claim quickly and follow up
Some insurance policies require you to file your claim in a timely manner, but most homeowners will probably want to file as soon as possible to expedite payment. Therefore, be sure to check with your insurance company at least every seven days after filing a claim, Perri advises.
After a hurricane or other disaster, “They have hundreds of thousands of insurance claims, so if you don’t follow through, you could be forgotten,” he added. “The squeaky wheel gets the grease.”
You don’t have to accept the initial offer from your insurance company
An insurer will deny a claim, or accept it and make a payment, but it may not be an amount you think is sufficient to repair the damage to your home. In that case you can appeal.
To do that, you can get quotes from contractors and submit them as proof that the proposed payment is too low, or hire a public insurance adjuster who works for you, the homeowner, rather than the insurance company. Public insurance adjusters typically charge a fee of between 5% and 20% of the insurance claim.
“Employ someone to compile these estimates so you can appeal,” Perri said.
If you’re hiring a contractor, make sure the estimate is extremely detailed, right down to the number of coats of paint they’ll use to restore your house to its original condition, he advised. “Documentation is king,” added Perri.
