The cost of homeowners insurance continues to rise. Americans are paying higher than ever home insurance premiums. A 2021 study by the National Association of Insurance Commissioners shows that homeowners insurance premiums increased 3.1% in 2018, just after a 1.6% increase in 2017.
With homeowners paying historically high premiums, it’s smart to know how to get the most out of your coverage. The Insurance Information Institute (III) conducted an extensive survey in 2016 to assess how informed homeowners are when it comes to the details of their policies.
The consensus from the survey was that while most homeowners are aware of basic coverage, more education is needed for policyholders to receive the full benefits of the policies they pay for.
When policyholders don’t know how to get the most out of a homeowner’s insurance claim, they lose money that is rightfully theirs. Rather than cover the cost of needed home repairs, the money continues to fill the coffers of the trillion-dollar insurance industry.
When homeowners are informed, they are empowered to make their homeowners insurance policies work for them instead of the insurance companies.
Here are six tips to help you get the most out of your home insurance claim.
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know your policy
Homeowners are often unaware of the extent of their homeowners insurance coverage. While most homeowners know the basic areas a policy covers, a lot gets lost in the details.
For example, most homeowners know that their policy covers items stolen in a home break-in. however, according to survey iii, only 57% knew that a homeowners insurance theft policy also applies to items stolen from a vehicle, and only 30% knew that homeowners insurance would cover losses such as theft of a child’s laptop at school.
Learning about things like your policy’s off-premises theft coverage can save you from a serious headache if someone steals your wallet on vacation or breaks into your storage facility.
not knowing your policy can cost you a lot of money. No matter how friendly your insurance agent may seem on the phone, your job is to save money for the insurance company. Your agent is unlikely to tell you important coverage details like this.
The ignorance of the insured is more concentrated in some areas, especially when it comes to natural disasters. Study III found that 43 percent of homeowners incorrectly assumed that damage from heavy flooding was covered by their standard policy.
However, most standard homeowners policies have significant coverage gaps for issues like:
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floods
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earthquakes
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sinks
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slides
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mudslides
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damage due to sewer overflow
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electronics damaged by electric shock
Part of being an educated policyholder means knowing the details of your policy. know your policy limits on what is and isn’t covered, and make sure your policy doesn’t leave you without coverage when a disaster strikes.
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prepare for disaster ahead of time
Preparation is key when it comes to maximizing your home insurance claim. The two main ways homeowners can ensure they are adequately prepared for a disaster are by keeping a home inventory and keeping up-to-date photos on hand.
data from the 2020 triple-i consumer survey shows that 43% of homeowners maintain personal property inventory.
Keeping an up-to-date inventory on hand can be a lifesaver when a serious disaster strikes. It ensures that you don’t forget to include any key items in a completed personal property claim during a chaotic time, and helps make the insurance claims process easier.
Keeping up-to-date photos on file is another way to avoid a denied property damage claim. The ability to provide pre and post documentation to your insurer protects you from having the damage written off as pre-existing or a wear and tear issue.
This is one of the ways insurance companies frequently disqualify policyholders from coverage for problems that should be covered. Be sure to regularly update your files with recent imagery, especially when the forecast calls for a major storm. When you have photographic documentation, it is much more difficult for a claims adjuster to deny your claim.
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document everything
Once disaster strikes, having the right answer makes a big difference in the amount of insurance settlement you’ll eventually be presented with.
You will need to create a comprehensive inventory of damaged items. If you already have an inventory of personal property on hand, this task becomes much easier. When listing damaged items, you must include age, price originally paid, and replacement cost.
Your insurance company will send you an insurance adjuster, but it’s smart for you to hire an independent adjuster as well. The benefit of using a public insurance adjuster is that they will have no incentive to give you a lower estimate of the actual cash value of the damages.
If an independent adjuster’s estimates come out significantly higher than those of your insurance company’s claims adjuster, it indicates that your insurance company is trying to save some money at your expense.
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make repairs immediately
When it comes to damage like a broken window or a leaky roof, making temporary repairs right away is critical. issues like this can quickly cause additional damage. In situations like this, homeowners insurance companies often dismiss claims on the grounds that the homeowner waited too long to make repairs.
When performing temporary repairs, you should further protect yourself by obtaining multiple repair estimates. Document all repair estimates and receipts. you will need the repair receipts for reimbursement.
If your insurance company attempts to deny payment by disputing the cost of repairs, you can submit repair estimates as proof that the repair costs were justified.
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do not accept denials from the insurance company
It is very common for a home insurance claim to be denied when the problem is something the policy should cover. there can be many reasons why this happens.
Sometimes insurance companies try to prey on a homeowner’s ignorance by claiming a claim isn’t covered when the issue is just a technicality that could be easily resolved if the insurance company were upfront.
Other times, it may appear that a problem is not covered because of how the damage is presented on a claim. For example, your mold claim could be denied because the mold damage is not listed on your policy.
However, if the mold was caused by a water leak and plumbing problems, and the resulting water damage is covered, the claim should not be denied. a complete and clear presentation of the damage and the reasons behind it is essential.
An initial claim denial does not indicate that your claim will ultimately not be approved with the correct documentation and submission.
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consult an attorney
One of the main reasons home insurance claims are often grossly underpaid is policyholder ignorance. Even if you read the terms of your policy carefully, it can be difficult to accurately assess how much your claim should be worth.
Accurately assessing the value of a claim requires specialized knowledge of contract and insurance law. When the only professionals involved in your claim are those who work for your for-profit insurance company, you make yourself vulnerable.
Don’t accept a payment hoping that your home insurance company is acting in good faith. a settlement offer is not a bet you should make.
Most bad faith insurance attorneys offer free initial consultations and accept payment on a contingency fee basis. This means that an insurance attorney is unlikely to tell you that you have a case or agree to take it on unless you strongly believe your claim is worth a legal battle.
When you have serious damages and large amounts of money at stake, consulting an attorney at Lanier Law could be an essential step in protecting your finances.
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