December 28, 2017
If your home or personal belongings were damaged in a natural disaster, you likely have many questions about the homeowners insurance settlement process.
We understand that submitting a claim can be confusing, and that’s why we’ll be there to assist you along the way. Here's our guide to navigating the homeowners insurance claim process.
Upon returning to your home after a fire or natural disaster evacuation, survey the property for damage. Contact your AAA insurance agent to begin the claims process. As the first step in the claims process, AAA will assign a claims adjuster to work with you.
Your claims adjuster will walk you through the claims process, answer questions, and estimate the damage to help you rebuild.
Debris removal will be the first order of business. Your debris must be removed prior to rebuilding. Your AAA homeowners insurance policy provides a set amount of debris removal coverage, often stated as a percentage of the physical loss or damage.
Although your claims adjuster cannot advise you on whether or not to have the government conduct the debris removal, for widespread disasters, local and state governments may create consolidated debris management programs. Participation in such programs may be restricted by a deadline and require affirmative action from policyholders. California is running one such program for debris related to the 2017 wildfires; AAA encourages those affected to review the debris removal program while working with your claims adjuster.
After a loss, work with your insurer or agent to determine the appropriate level of coverage to maintain during the rebuilding process. Be sure to adjust the coverage as necessary once the home is rebuilt.
Keep homeowners insurance coverage in force during the rebuilding process. Talk with your agent or insurance company and decide the appropriate level of insurance to carry for your dwelling while it’s under construction. Remember to reassess your coverage once the house is rebuilt.
It is important to ensure your coverage limits adequately reflect the cost to fully rebuild your completed home.
Also, consider purchasing flood insurance and earthquake insurance. These perils are not covered by most homeowners insurance policies. Talk to your AAA homeowners insurance agent about the best way to insure against the risk of mudflows or landslides, as rain following major fires can add to these risks.
As your claim proceeds, a payment or payments will be issued based on your coverages.
The insurance coverage you purchased will determine if you receive the full replacement cost to rebuild your home and replace its contents, or if the amount you receive will be based on the condition of the property at the time of loss.
You may also have extended replacement costs coverage that protects you in the event that a surge in demand, often following a disaster, results in an increase in costs to rebuild your home.
Many policies also have coverage for building code upgrades to ensure homes are built in compliance with newer building code standards.
A typical homeowners policy has several separate coverages, so you might receive different checks for different coverages. One common type of homeowners insurance policy is structured as follows:
Be sure to have regular communication with your claims adjuster to ensure that your claim is settled efficiently and smoothly.
Your claims adjuster will work with you and your contractor to develop a scope of work (SOW). This is a detailed building plan used to reconstruct your home. The adjuster reviews your previous floor plan, square footage, and interior finish items such as carpet or wood flooring, counter tops, cabinetry, molding, and plumbing.
Homeowners insurance with replacement cost coverage will cover the cost of rebuilding your home with materials of like kind and quality, and are subject to the limits and terms of your insurance policy.
Unfortunately, as the rebuilding process gets underway, unlicensed contractors and scam artists may try to cash in on your misfortune. It is natural for homeowners to be in a hurry to begin making repairs following a natural disaster. However, you will save yourself a lot of time, money, and frustration by taking the time to check the credentials of the businesses and individuals before you hire them to repair your property.
After a major loss there are many questions about routine activities. For instance, should you continue to pay the mortgage, taxes, and insurance? Here are a few helpful tips to keep in mind during your home rebuilding process.
