With Hurricane season around the corner, the Atlantic season starting June 1st and the Eastern Pacific hurricane season beginning May 15th, it is time to start preparing for what this hurricane season may bring. Hurricane Sandy, the deadliest and most destructive hurricane of the 2012 Atlantic hurricane season, made headlines around the world after killing 286 people and causing tens of billions of dollars in damage. But what failed to make headlines was how people recovered from the destruction left behind by Sandy and how homeowners dug themselves out of their financial mess. Here are eight tips on how you can get the most out of your homeowners insurance after a hurricane.
1. Know Your Home’s Replacement Cost
Insurance experts recommend that every few years, you ask your insurer or broker for a customized estimate of your home’s replacement cost. It is also recommended that you buy full replacement-cost coverage, an “extended coverage” rider which can add up to 30% on top of your replacement-value limit to cover the surge in labor and material prices that often follows natural disasters. It is also recommended that homeowners look into purchasing an ordinance or law endorsement rider, which pays the extra costs of rebuilding your home to comply with current local building codes.
2. Know exactly what your homeowner’s insurance policy covers
The standard homeowners insurance policy doesn’t include coverage for flooding. It is important that homeowners understand exactly what their insurance covers, and what it doesn’t. If your home is subject to natural disasters not covered by your standard policy, such as earthquakes or hurricanes, then you should talk to your insurance agent about filling the gap with separate policies, typically sponsored by state government agencies.
3. Be Persistant with your insurance company
The bigger your loss, the more trouble you can expect from your insurance company to get your claim paid. Research shows that about 41% of claimants with losses higher than $30,000 got into at least one dispute with their insurance company over disagreements over damages, disputes about coverage, slow payouts, etc. Insurance experts recommend that homeowners use a smart phone to take photos of the damage and report the loss verbally as soon as possible. If your insurance company has an app where consumers can file claims, use it! If after filing a claim, the adjuster says your policy doesn’t cover a certain loss, ask to see the limit in writing. If you get a damage estimate or settlement that you think is too low, ask your contractor for help in persuading the adjuster that a higher estimate is needed to fix the damage or present a second opinion from another contractor to your adjuster. Still disagree? Consider hiring a public adjuster at napia.com
4. Factor in living expenses
Additional living expenses coverage (ALE) reimburses the insured for the cost of maintaining a comparable standard of living following a covered lost that exceeds the insured’s normal living expenses prior to the loss. This is a percentage of your coverage’s limit. If you can’t live in your home due to a covered loss in your policy, the insurer will reimburse you for certain expenses you rack up while you’re living away from home. Ask your adjuster if you need to file and keep receipts to collect payment.
5. Seek Financial Relief Programs
Many Hurricane Sandy victims found some sort of financial aid from relief funding programs. Do your research and keep an eye on the news for relief programs that you may qualify for. You may be able to recover money from losses that weren’t covered by your standard homeowners policy or help pay any other unexpected costs caused by the natural disaster. In some cases, even the IRS can help by providing tax deductions for individuals who suffered a major loss. Of course, you have to fill out extra paperwork and keep good records, but hey, it’s a tax break!
6. Keep your insurance documents in a safe place
Keeping your insurance documents together and in a safe place is important. It is also important to be mindful of where this “safe place” is. Many Hurricane Sandy victims kept their insurance documents safely stored in their basements that got flooded. Store your documents in a waterproof safe. It is also important to keep a list of all your possessions along with your insurance papers. You can make an inventory using the “Know Your Stuff” app available for free from the Insurance Information Institute, or download an app from your insurance carrier if they offer it. You can take photos of each item with your cell-phone camera and the storage cloud will properly store them, safe from any natural disaster.
7. Cash is king
It’s important to note that insurance claims or settlements aren’t always paid quickly. This is why it’s important to keep cash on hand at all times to purchase materials or hire any contractors before your insurance pays, that is unless you want to max out your credit cards. Experts suggest building an emergency savings funds that is equal to six months’ pay to handle any unexpected costs life may throw your way.
8. Stay Positive
Recovering from a major financial disaster, such as property loss, can be one of the toughest challenges in life. If you ever find yourself in such an unfortunate situation, keep your head up and stay positive. With proper planning, proper insurance coverage, persistence, and patience, you’ll be able to rebuild your home and be back on your feet in no time.
And here’s another tip, many insurance companies offer discounts to customers who buy multiple policies from them, such as a home and auto insurance. Talk to your insurance agent to see if you qualify today!