Floods are one of the risks of home ownership, and the damage they do can be costly. In the wake of Hurricane Harvey last year, Texas residents filed over 80,000 claims, resulting in 670k in insurance payouts. A working knowledge of how to file a claim should this tragedy strike you is valuable, and can be helpful in an already trying time.
What Flood Insurance Does
Flood insurance covers the cost to rebuild or the actual value of your home, whichever is less, in the event of a flood. Dependent on the extent of coverage you purchase, the policy will include:
- Your home and its foundation
- Electrical and plumbing systems
- HVAC equipment such as air conditioning, furnaces, and water heaters
- Kitchen appliances
- Permanently installed carpet over unfinished floor
- Permanently installed wallboard, paneling, bookcases, and cabinets
- Window blinds
- Detached garages
- Debris Removal
- Water Heaters
- Living expenses while relocated
Flood insurance can also cover personal property such as:
- Clothing, furniture, and electronic equipment
- Window AC equipment
- Portable microwaves and dishwashers
- Carpeting not covered by your building policy
- Freezer and frozen food
Why Flood Insurance is Important
One of the key reasons flood insurance is vital is because homeowners and renters insurance do not cover it. To assume that flood coverage is part of a homeowners policy has caused heartbreak for many a person.
Of all natural disasters that occur within the United States, floods are the most frequent. Statistically, homeowners are likely to deal with flood damage at some point in their lives. Low and medium risk areas account for 25 percent of flood-related damage claims. If you live in a high-risk flood area, the risks are even greater. During the life of a 30-year mortgage, there’s a 25 percent chance of experiencing a flood.
Before Filing a Claim
Deciding whether to make a claim is an important step in the process. Insurance rates usually go up when you file a claim, as much as 20 percent after the first claim. On average, homeowners only file a claim once every ten years. Don’t make the claim until you’re sure the damage is worth it.
If the damage is minor or cosmetic, consider paying out of pocket. If this is your first claim and the damage is severe, make the claim. Just be aware of the increase in premium.
Should you need to make an insurance claim, you may find a considerable to do list awaiting you. If you approach it methodically, however, it can take a lot of stress off the process.
The first piece of advice is to act quickly. If you need to file a flood insurance claim, it is likely your neighbors for a wide area around you are as well. They’re going through the same process you are. The longer you wait to file, the farther down the line your claim will be.
Contact your flood insurance provider. They will be able to go over your coverage with you, what kind of time limit you have to make a claim, and how long it will take to process the claim. If living expenses while you’re dislocated are part of your policy, your agent will be able to explain what your coverage includes for it.
Take extensive photos of the damage, if possible. If you can take them with a smart phone, you should do so. The photos will probably include a time stamp and geo location data that the insurance agency will find helpful and useful. You’ll want to take these pictures ASAP, as the damage can look less serious as time goes on. After water has receded, it can be hard for an adjuster to gauge how bad the damage really is.
It’s risky to make repairs before an adjuster can inspect, but at times temporary repairs need to occur to avoid more damage. Make sure to talk with your agent right away for the best course of action.
Throughout the process, make sure to keep detailed paperwork. Making an inventory list, especially of your damaged items, is important. Include item details, value, dates of purchase, and any other relevant info. Keep all receipts linked to your claim as well. Keep hard copy of all communications with your agent. You should hold onto all repair documents as well. The more complete your records are, the better your claim.
Filing Your Claim
Once you have completed the above steps, it’s time to file the claim. Once you file your claim, your agent will likely send out an adjuster to assess the extent of the damage. Have thorough documents ready for them.
Survey your house before the adjuster arrives. Study the foundation, attic, and basement. You’ll be able to point out potentially damaged areas the adjuster might miss otherwise.
After the inspection, your insurer will more than likely need a proof of loss document. Insurers normally need this within 60 days of the event so again, time is of the essence. Sometimes they will permit an extension, but you must get permission in writing.
After review of your claim, your insurer will either deny your claim or make a payout offer. Make sure to get a copy of the adjuster’s report at the time of the inspection. You’ll need this if you disagree with your insurer’s decision.
Should you disagree with your insurer’s offer, consider hiring your own adjuster. A lot of times, a public adjuster will inspect your damages for free to see if your claim is valid. If the claim has merit, they charge a percentage fee of your claim total, usually around 10 percent. It might seem like a lot, but it’s far better than getting little or nothing from an insurer.
You also get the benefit of them being able to handle communication with you agency on your behalf. This allows you to focus on rebuilding and repairing your home. You can find a certified adjuster through the National Association of Public Insurance Adjusters.
After the Claim Process
After completion of the claims process, it’s time to repair and rebuild. Your insurer will probably give you a list of contractors, but you are not required to use it. Always make sure to use a licensed contractor that specializes in flood damage. After any natural disaster, there can be predatory scammers that take advantage of it. Using a certified, ethical contractor of good repute is a great way to avoid falling victim to this risk.