Property damage insurance claims can become quite complicated. The insurance company will typically require an inspection of the damaged property.
Most homeowners and business owners are unfamiliar with property damage insurance claims. You might have never filed a claim in your life. Even if you have dealt with insurance before, property damage insurance claims can vary widely.
How do insurance claim inspections work? What should you expect during your property damage claim inspection? How should you prepare for an inspection? Let’s find out.
How a Property Damage Insurance Claim Works
Property damage insurance claims come in all different types and sizes.
However, they generally proceed in a similar way:
- You File the Claim: You experience a loss, then file a claim with your insurer. You contact your insurance company, and an insurance agent handles your claim, then assigns a claims number.
- The Insurer Evaluates the Claim: Next, the insurer evaluates the claim. The insurer sends an adjuster to your property to inspect the damage. For a smaller and simpler claim, the insurer might approve the claim with photos or videos of the damage.
- Your Insurer Approves or Denies the Claim: Your insurer approves or denies your insurance claim. The insurer might send you a check to compensate you for the property damage. Or, the insurer might directly pay a local contractor to complete the repairs.
- You Close Your Claim: After the repairs are complete, and you receive payment for your insurance claim, your claim is closed. Your insurer has fulfilled its obligation to make you whole again after the incident.
How Property Damage Insurance Claim Inspections Work
Property damage insurance claim inspections occur at ‘Step 2’. The insurer evaluates your claim, then approves or denies your claim based on the inspection.
For smaller claims, the insurer might not require an inspection. If the claim is worth less than $1,000, for example, or occurred during a simple event (like a routine storm that affected multiple homes in the area), then the insurer might approve your claim with photos, videos, and other evidence of the documented area. An adjuster may not need to physically inspect your property damage.
In most cases, however, the insurer will inspect the property damage before approving or denying your claim.
The insurer will dispatch an adjuster to your property to evaluate the claim. The adjuster’s goal is to analyze the property damage, then pay you the amount legally required for your insurance claim, based on your insurance policy.
Remember: insurance companies are for-profit businesses. Their goal is to make money: not pay out more money than they need to pay. They will pay out the minimum amount they are required to pay based on the terms of the insurance contract – nothing more.
Your insurance company’s adjuster will inspect the damage to verify the damage is legitimate. The adjuster might check for signs of wear and tear, fraud or deliberate damage, for example. The insurer might check for other damage around the property.
Based on the damage and the limits of your homeowners policy, the adjuster will decide on your property damage insurance payout.
What to Expect During an Inspection
There are three types of inspections for property damage insurance claims:
- Contractor Inspections
- Insurance Adjuster Inspections
- Public Adjuster Inspections
Contractor Inspections For Insurance Claims
You might schedule an inspection with a local contractor to determine how much it costs to repair the damage. Many contractors provide free, no-obligations damage estimates. You can check how much it would cost to repair your damaged roof, for example, then decide whether it’s worth it to file a claim.
A good contractor will inspect your property, check the damage, then provide an itemized list and price estimate for repairing the damage. You can approach your insurance company with this estimate and make an insurance claim. Or, if you’d rather work outside of insurance, you can pay the contractor to make repairs directly.
Sometimes, damage is less severe than you anticipated. It might only cost $1,000 to repair the damage, for example. In these cases, it is often not worth it to file an insurance claim because your deductible may be higher than the repair cost.
You might request a contractor inspection before contacting your insurance company. Or, you might request a contractor inspection after. If you disagree with your insurance adjuster’s assessment, for example, then you might request a second opinion from a local contractor.
Insurance Adjuster Inspections For Insurance Claims
If you decide to file a claim, then your insurance company will send an adjuster to your property. Your insurance company’s adjuster is either a salaried employee or independent contract adjuster of the insurance company. The adjuster will inspect the property damage to ensure it’s covered by your homeowners insurance policy.
Some adjusters will estimate the cost of repairing the damage. Other adjusters will ask a contractor to make an estimate. Adjusters may not be qualified to estimate construction or repair costs. However, all adjusters are professionally trained to assess damage.
Public Adjuster Inspections For Insurance Claims
A Public Insurance Adjuster is quite similar to an insurance company adjuster when it comes to experience and duties performed – with one major difference. A Public Adjuster is hired by the insured/policyholder and works to represent their best interests instead of the insurance company. Many Public Adjusters formerly worked as insurance adjusters for insurance companies, before going out on their own to represent policyholders. Public Adjusters have additional experience with analyzing insurance policies and inspecting property damage from a goal and perspective of truly obtaining a fair and adequate claim settlement, so policyholders can fully restore or repair damaged property. When using a Public Adjuster for a property damage claim, it is advantageous to have the Public Adjuster present at the first inspection with the insurance company’s adjuster. This can reduce the likelihood of disagreements, things being overlooked, and the need for scheduling a second inspection.
What Happens During a Property Damage Inspection?
Your insurance company’s adjuster might visit your property one or more times to inspect the damage. An adjuster might inspect the initial damage after the loss, for example, and then revisit your home after repairs are complete to assess repairs.
Things to expect during a property damage inspection include:
Full Inspection of Damaged Property & Items: The adjuster will inspect any property damage in and around your home. The adjuster will verify the damage is legitimate. If you’re making a claim for hail damage to your roof, for example, then the adjuster will inspect the damage to ensure it occurred during the latest hailstorm and not years ago.
Damaged or Destroyed Items: Your adjuster may ask for a list or inventory of damaged items. Give your adjuster this list along with any receipts. Do not throw out damaged items until the adjuster has visited. You may need to take photographs of any items you intend to claim. Consider photographing or videotaping all property damage – including physical damage to your property and any possessions. The more evidence you have, the smoother your claim will be.
Structural Damage: The adjuster will check structural damage on and around your property. The adjuster will look for structural damage to your home, pool, garage, shed, and any other buildings.
Signs of Fraud of Intentional Damage: You cannot burn down your own property and make an insurance claim. During the inspection, the adjuster will look for signs of insurance fraud – like intentional damage or old damage from a previous incident.
For more tips on dealing with an insurance adjuster read the article here.
Other Things to Know About Insurance Claim Inspections for Property Damage
Insurance claim inspections for property damage can be complicated. Other things to know about inspections include:
Make Temporary Repairs & Control the Scene: We covered that it is best to avoid removing damaged items until the inspection. That’s true. However, you must still make temporary repairs and secure the scene. If your home is flooding from a burst pipe, for example, then you shouldn’t simply shrug your shoulders and watch water fill the house. You need to secure the scene, turn off the water, and make temporary repairs (if safe to do so). Most insurers tell you to contact an emergency restoration company immediately.
Track Additional Living Expenses: If forced from your home due to property damage, track your additional living expenses. Your homeowners insurance covers additional living expenses (ALE) incurred if you are unable to remain in your home. That means meals, accommodations, and other costs are covered. Keep receipts from any hotels, restaurants, rental car companies, and more.
Consider Replacement Cost and Actual Cash Value: Homeowners insurance policies cover possessions in two different ways. Some cover the actual cash value of your items, which is the value of the item minus its depreciation. Higher-end homeowners insurance policies cover replacement value, which is the amount needed to replace the item without depreciation.
Remember Policy Limits: Your homeowners insurance policy has specific policy limits. If your home was worth $400,000, for example, and burned down in a fire, but you only have a $200,000 home insurance policy, then you will receive $200,000 from your insurance company. Your insurance company won’t pay more than the value of your policy.
Coverage for Improvements: Many homeowners are surprised to find insurance has reduced their claim because they made significant improvements to the house. You might have added a deck or renovated your bathroom, for example, without informing your insurer of the changes. If your insurer isn’t aware of the changes, then you will not receive compensation.
Conclusion: Contact a Public Adjuster or Contractor for a Second Opinion
During an inspection, an insurance adjuster is doing his or her job. Many insurance adjusters are reputable, honest people. They inspect the damage, assess your claim, and provide a report.
However, your adjuster is also an employee of your insurance company, and adjusters want to keep their employers happy. The adjuster’s focus may be to cover the bare minimum amount legally required – nothing more.
If you are unhappy with an insurance company’s inspection for property damage, talk to an experienced Public Adjuster for a second opinion.