The cost of homeowner’s insurance just keeps going up. Americans are paying higher homeowner’s insurance premiums than ever before. A 2021 study by the National Association of Insurance Commissioners shows that homeowner’s insurance premiums rose 3.1 percent in 2018, just after a 1.6 percent increase in 2017.
With homeowners paying historically high premiums, it’s smart to know how to take full advantage of your coverage. The Insurance Information Institute (III) conducted a comprehensive survey in 2016 assessing how informed homeowners are when it comes to the details of their policies.
The survey’s consensus was that although most homeowners are aware of basic coverage, further education is needed for policyholders to receive the full benefits of the policies they pay for.
When policyholders don’t know how to get the most out of a homeowner’s insurance claim, they lose money that rightfully belongs to them. Instead of covering the cost of necessary home repairs, money continues to fill the coffers of the trillion-dollar insurance industry.
When homeowners are informed, they’re empowered to make their homeowner’s insurance policies work for them instead of for the insurance companies.
Here are six tips to help you get the most out of your home insurance claim.
Know Your Policy
Homeowners are frequently unaware of the reach of their homeowner’s insurance coverage. While most homeowners know the basic areas a policy covers, a lot is lost in the details.
For example, most homeowners know that their policy covers items stolen in a home burglary. Yet, according to the III survey, only 57 percent were aware that a home insurance theft policy also extends to items stolen from a vehicle, and only 30 percent knew that homeowner’s insurance would cover losses like the theft of a child’s laptop at school.
Educating yourself on things like your policy’s off-premises theft coverage can save you from a serious headache if someone steals your wallet during vacation or breaks into your storage facility.
Failure to know your policy can cost you serious money. No matter how friendly your insurance agent may seem on the phone, their job is to save money for the insurance company. It’s unlikely your agent will inform you of important coverage details like this.
Policyholder ignorance is concentrated more highly in some areas, especially when it comes to natural disasters. The III study found that 43 percent of homeowners incorrectly assumed that damage from heavy flooding was covered under their standard policy.
However, most standard homeowner’s policies have significant coverage gaps for issues such as:
Damage from sewer back-up
Electronics damaged in lightning surges
Part of being an educated policyholder means knowing the details of your policy. Know the policy limits regarding what is and isn’t covered, and make sure your policy doesn’t leave you under-covered when disaster strikes.
Prepare for Disaster in Advance
Preparation is key when it comes to maximizing your home insurance claim. The two main ways homeowners can ensure they’re adequately prepared to deal with a disaster are to maintain a home inventory and keep updated pictures on hand.
Data from the Triple-I Consumer Poll 2020 shows that 43 percent of homeowners maintain a personal property inventory.
Keeping an updated inventory on hand can be a lifesaver when a serious disaster strikes. It ensures that you don’t forget to include any key items on a personal property claim completed during a chaotic time, and it helps to facilitate the insurance claims process.
Keeping updated photos on file is another way to avoid a denied property damage claim. The ability to provide before and after documentation to your insurer protects you from the damage being dismissed as pre-existing or an issue of wear and tear.
This is one way insurance companies frequently disqualify policyholders from coverage for issues that should be covered. Make a point to regularly update your files with recent pictures, especially when the forecast calls for a significant storm. When you have photo documentation, it’s much harder for a claims adjuster to deny your claim.
Once disaster strikes, having the correct response makes a huge difference to the insurance settlement amount that will eventually come your way.
You’ll need to create a thorough inventory of damaged items. If you already have a personal property inventory on hand, this task is made much easier. When cataloging damaged items, you should include age, price originally paid, and replacement cost.
Your insurance company will send an insurance adjuster, but the smart move is for you to also hire an independent adjuster. The benefit of using a public insurance adjuster is that they won’t have any incentive to give you a lower estimate for the actual cash value of the damages.
If an independent adjuster’s estimates come back significantly higher than those of your insurance company’s claims adjustor, this indicates that your insurance company is trying to save itself some money at your expense.
Make Repairs Promptly
When dealing with damage like a broken window or a leaking roof, it’s crucial to immediately make temporary repairs. Issues like this can quickly cause additional damage. In situations like this, home insurance companies often dismiss claims on the grounds that a homeowner waited too long to make repairs.
When making temporary repairs, you should further protect yourself by getting multiple repair estimates. Document all repair estimates and receipts. You’ll need the repair receipts for reimbursement.
If your insurance company tries to deny payout by challenging the cost of repairs, you can submit the repair estimates as proof that the repair expenses were warranted.
Don’t Accept Denials from the Insurance Company
It’s very common for a home insurance claim to be denied when the issue is something that the policy should cover. There can be many reasons why this happens.
Sometimes, insurance companies try to take advantage of a homeowner’s ignorance by stating that a claim isn’t covered when the issue is just a technicality that could easily be cleared up if the insurance company was straightforward.
Other times, it may seem that an issue isn’t covered due to how the damage is presented in a claim. For example, your mold claim could be denied because mold damage isn’t present in your policy.
However, if the mold was caused by a water leak and plumbing issues, and the resulting water damage is covered, the claim should not be denied. A thorough, clear presentation of the damage and the reasons behind it is essential.
An initial claim denial is no indication that your claim won’t ultimately be approved with correct documentation and submission.
Consult a Lawyer
One of the main reasons home insurance claims are often significantly underpaid is policyholder ignorance. Even if you read the terms of your policy thoroughly, it can be difficult to accurately assess how much your claim should be worth.
Accurately assessing a claim value requires specialized knowledge of contract and insurance law. When the only professionals involved in your claim are those who work for your for-profit insurance company, you leave yourself vulnerable.
Don’t accept a payout hoping that your home insurance company is acting in good faith. A settlement offer isn’t a gamble you should take.
Most bad faith insurance lawyers offer initial free consultations and take payment on a contingency fee basis. This means that an insurance attorney is unlikely to tell you that you have a case or agree to take it on unless they strongly believe your claim is worth a legal battle.
When you have serious damage and high amounts of money at stake, consulting an attorney at The Lanier Law could be an essential step for protecting your finances.