Filing an Insurance Claim: How to File a Claim For Property Damage

Most home and business owners aren’t experts with property insurance claims.

How could you possibly be an expert if you’ve never filed a claim? Many property owners go their entire lives without making a significant insurance claim!

Filing An Insurance Claim

We’re explaining how to file a property damage insurance claim, including the steps to take, tips for maximizing your claim, and how to ensure your claim gets approved with the best chance for a fair settlement.

How to File a Homeowners Insurance Claim

A standard insurance claim for property damage goes through an eight-step process:

  1. Notify your insurance company
  2.  Meet with the insurance company’s adjuster
  3.  Protect your property and possessions
  4.  Secure temporary accommodations (if necessary)
  5.  Submit an inventory of damaged or destroyed items
  6.  Estimate the total repair and replacement cost
  7.  Repair or replace everything to pre-loss condition
  8.  Move back into your home

We’ll cover the basics of these 8 steps below. For additional information and resources, also see The Claim Process: Guide To How Insurance Claims Work.

Step 1) Notify your insurance company

Start by notifying your insurance company. After noticing a loss, you need to take action to protect your property. Contact your insurance company’s 24/7 claims hotline to begin the claims process.

Even if you don’t file a claim, you may still decide to contact your insurance company. Your insurer can help you decide if filing a claim is worth it. Your insurer can also explain the next steps to take.

Look up your insurance company’s 24/7 claims hotline and speak with a representative. Your insurer can dispatch an adjuster to your house, recommend a 24/7 emergency contractor, and explain how to take the next steps.

Step 2) Meet with the insurance company’s adjuster

The insurance company will send an adjuster to your property to inspect the damages. This adjuster is your representative at the insurance company. This is the person you will be interacting with throughout your claim. Also see valuable tips for dealing with the home insurance adjuster.

Your insurance company’s adjuster is either a salaried employee or independent adjuster working for your insurance company. The adjuster will analyze the damage, assess your policy, and determine what is and isn’t covered. The adjuster will interact with the homeowner and contractors throughout the restoration process.

Step 3) Protect your property and possessions

Depending on the severity of the incident, the insurance company or adjuster may recommend hiring a 24/7 emergency contractor or restoration company immediately. A contractor can arrive any time of day or night to secure the scene. The contractor can setup fans and drying equipment to manage water damage, for example, or haul away fire-damaged materials after a house fire.

Your insurance policy requires you to secure the scene after an incident. If you do not take steps to limit damage to your property, then your insurer could deny part or all of the claim because of a ‘failure to mitigate’. You cannot allow extra damage to occur to your home after an accident. You must take reasonable precautions to prevent further damage – like placing a tarp over the hole in your roof, shutting off water, or setting up fans if safe to do so.

Your insurance company’s adjuster will explain the next steps to take after a disaster or accident. The adjuster might send money to your account immediately. This money can cover your emergency expenses – like the cost of a hotel and the initial cost of the emergency contractor.

Step 4) Secure temporary accommodations (if necessary)

After a serious incident, your home might be unlivable. You may need to move out of your property during repairs.

If you have to move into a hotel, then home insurance should cover your accommodation expenses. Homeowners insurance covers the cost of repairing your property and possessions. It also covers additional living expenses (ALE) if you cannot remain in your home.

After moving out of your home, track all receipts. Your homeowners insurance could cover the cost of a hotel, dining out, renting a car, and any other expenses incurred because of your loss.

Most insurance policies cover your expenses up to a certain limit per day. You might receive compensation up to $125 per night for a hotel, for example, and $75 per day for food.

Step 5) Submit an inventory of damaged or destroyed items

To receive compensation for your damaged or destroyed items, you need to create an inventory. That inventory lists the items that were damaged along with their approximate value.

Some homeowners are extra cautious. They create an inventory of their home’s contents every 6 to 12 months. These homeowners take photographs of every valuable item, keep receipts of everything they ever purchased, and track it all in a spreadsheet. Read about the importance of regularly documenting and taking inventory.

Most homeowners do not have an up-to-date complete home inventory, and that’s okay. Gather your damaged items. Take photographs of the damaged items and estimate the value of each item. You will need to submit all of this information to your insurance company to receive compensation. As part of the process of any property damage insurance claim, the insured needs to complete detailed proof of loss forms.

Insurers provide compensation for items in two ways: actual cash value or replacement value:

Actual Cash Value: With actual cash value, the insurer analyzes the value of your items, then subtracts depreciation. If you bought a $2,000 laptop three years ago, then that laptop may be worth only $500 today with depreciation.

Replacement Value: With replacement value, your insurer compensates you for the cost of replacing your damaged items – not just the value you lost when the item was destroyed. If it costs $1,000 to buy a comparable laptop today, then the insurer gives you $1,000 to replace your laptop. You must actually replace the item to receive compensation. Your insurer will require a receipt, then give compensation based on the replacement value of your item.

Step 6) Estimate the total repair and replacement cost

The next step is to calculate the cost of repairing and replacing your home and its contents. To do this, your insurer will typically recommend contractors in your area. This contractor will analyze the damage, then determine the approximate cost to repair your damages.

For significant repairs, it’s a good idea to get multiple quotes. Calculating the cost of extensive repairs can be difficult. If a contractor makes a mistake during the estimate (say, by under-estimating cost), it could lower your final payout.

Request a quote from reputable local contractors. If you disagree with your insurer’s assessment of damages, then consider contacting a public insurance adjuster or a third party contractor for an estimate. An experienced public adjuster or reputable third-party contractor can give you a better idea of how much everything costs.

To get help from a licensed insurance claim expert that fights for your best interests, talk to an experienced Public Adjuster.

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Note About Total Loss Claims: If your home has significant damage, then it could be declared a total loss. A home that burns down, for example, could be a total loss. With a total loss, you have maxed out your insurance policy. The cost of repairing or replacing your property is more than your policy is worth. Your insurer pays to the limits of your policy, while you cover any remaining costs out of pocket. If you have a $100,000 policy, for example, and a fire caused $150,000 of damage to your property, then your insurer will pay $100,000, while you pay the remaining $50,000 out of pocket. Find more in depth information here about total loss property damage claims.

Step 7) Repair or replace everything to pre-loss condition

Once you have approved a contractor’s estimate, repairs can begin. Repair or replace everything to pre-loss condition. Depending on the damages, this step can take a few days – or a few months.

If you are forced to live outside of your home, be sure to track expenses. Keep receipts for all accommodations and meals. Track any additional costs you incur as a result of your home repairs. Many are surprised by how quickly costs can add up. By tracking everything, you can ensure you receive fair compensation from your insurance company.

Step 8) Move back into your home

After repairs are complete, you’re ready to move back into your home. Your home is safe and ready to be lived in once again.

What Happens If Something Goes Wrong with My Claim?

Not all insurance claims go as smoothly as outlined above. Your insurer could deny your claim or reduce payout. A contractor might go beyond your budget, forcing you to pay money out of pocket.

If something goes wrong with your claim, you have multiple options.

Talk to your Insurer: Sometimes, just talking to your insurer will solve your problem. Ask to speak with your adjuster’s supervisor, for example. Or, contact your insurer’s complaints hotline. Escalating the situation could help resolve your issue – or it could do nothing.

Hire a Public Adjuster: For higher-value insurance claims (over $10,000), it’s generally worth it to hire a public adjuster. A public adjuster works for you, analyzing your claim and negotiating with the insurance company on your behalf. Proven public adjusters often help obtain settlements that are 3 to 4 times higher than the one initially offered by the insurance company.

Speak with an Attorney: Public adjusters aren’t available in all states. In some states, attorneys specialize in insurance disputes and play a similar role to public adjusters. Attorneys can help you navigate the claims process and fight for the compensation legally owed to you. s

Schedule a free consultation with a public adjuster today. Educate yourself on your rights – and prevent an insurer from taking advantage of you.

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If dealing with a claim, include the cause of loss/damage