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Four Things to do and What NOT to do When You Need to File a Homeowner’s Claim

Blue ballpoint pen and a home insurance claim form on a clip board. A blank / empty form is waiting to be filled and signed by a policyholder / insured person.

Homeowner’s insurance is one of those required things no one likes to spend money on, but is vital to protecting what is likely your largest single asset — your home or rental property. Unfortunately, the time may come where whether you like it or not, you need to file a claim.

When that time comes, there are some important steps to take and rules to follow, as well as some key things to avoid when going through this process. Below are a few guidelines as well as a checklist of things that may make the process smoother with your carrier and broker:

1. Document everything before, during and after a claim: This is one of the most important things you can do. At least once a year at a minimum and certainly after any major home projects or investments, take a detailed home inventory of everything in the house. Pay special attention to things like finishes and trim, any high-end appliances, unique furniture or collectibles, special exterior features such as outdoor kitchens and landscape/hardscape, as well as the interior items that would need to be replaced in the event of a loss (think clothes, soft goods, housewares, etc.). It is essential to have an accurate documentation of what is in your property before you make a claim. Videos and photos work best and narrate what the items are.

Then, if you find yourself in the middle of a situation that may result in a claim, take video (if safely possible) during the event. This may be essential when it comes to proving the nature of the claim.

Finally, once the event is over be sure to take as many photos and videos that you safely can documenting the damage or destruction. Documentation is extremely helpful when it comes to processing your claim.

2. Make sure you have copies of all your policies and any important updates in an off-site location. Many people may place copies of their policy in a filing cabinet or fire-safe box in their home. While this is prudent, it’s also equally important to ensure you have access to your policies if you aren’t able to get into your home. Find out if a copy of your policy is accessible via your provider’s web site or app. If not, be sure to download a copy as PDF and add it to your iCloud or other off-site storage.

3. Examine whether this claim is worth it: While it is true the point of homeowner’s insurance is to reimburse you for losses, an important step is to determine if it is even worth it to file a claim. Before filing a claim examine your policy and its deductible and payout schedule. If your deductible is $1,000 and you are filing a claim to replace a $1,500 patio door, it might be more advantageous to simply pay for the damage out of pocket. Why?

First, the time it may take to have the claim processed, repairs ordered and finished is not worth the time and monetary difference if it means aggravation for your family. Second, as with almost any insurance product, the more claims you file, the higher your rate will be each year when you renew. Finally, and most importantly, overuse of insurance and incessant claims could lead to your account being flagged and denied when it comes to renewal.

4. Always use your agent or broker as a resource: If you find yourself in a situation where unfortunately you have losses outside your policy coverage due to something like an act of god provision (flooding for example), still use your agent or broker as a valuable resource. Even if they are unable to help you with coverage, oftentimes those in the loss prevention and risk mitigation industries will have access to resources and information that may help you with costs or needs outside of your policy areas. Your agent or broker is a trusted ally and they are there to assist as much as possible!

Additionally, there are some important things not to do when you need to file a homeowner’s claim:

1. Don’t wait to file your claim!: One of the biggest battles that may come up with your carrier is which repairs are covered and importantly with which provider. You may be tempted to wait to file to see what really needs be done or do some of it yourself but it is essential to get your claim going as soon as possible. While it may feel like you just need to get started with repairs, incurring costs with a random provider and then hoping your insurance company will pay you back will likely be a very large headache, if not impossible. As much as it may pain you to do so, wait until you have spoken with your carrier and have arrangements to begin work with one of their approved providers; this will save you time and money down the road.

2. If you need to do work not covered by your policy, thoroughly vet any potential contractors: There are oftentimes projects or elements that need to be repaired that are not covered by your policy and there is no preferred provider. As you work to hire outside contractors, spend time to check their contractor’s license number and verify its validity with the state and review any potential outstanding claims. If possible, investigate the company with your local Better Business Bureau (BBB) as well to flag any potential complaints.

Referrals from trusted friends, neighbors or colleagues are always the best way to go but sometimes there may not be time to do so or those contacts are unavailable. Vetting your contractor can help protect you as much as possible.

3. Avoid scams: While you may have vetted a contractor as thoroughly as possible or you are working with your carrier’s direct recommendation, it’s always a good idea to be on the lookout for scams. Some red flags to be aware of as you go through the process: Be wary of anyone who wants full payment up front before any work is completed; never work with anyone who is intimidating or bullying you into a project and always demand to see proof of licensing and a secondary photo ID to match the actual contractor to the license number used.

The bottom line is no one likes to file a homeowner’s claim, but there are definitely steps to ease the process. In addition to the above, always check your carrier’s web site for any additional tips or resources to enhance your knowledge base when it comes to protecting such an important asset.

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