How to Protect Your Investment When You File a Home Insurance Claim

Your home is likely the largest investment you’ve ever made in your life. You rely on it for all kinds of reasons. It’s your family’s shelter, the place where you come home after work each day, and the place where you make memories that will last a lifetime. That alone makes your home an invaluable investment and one that you want to be able to rebuild if it were damaged.

Your home is also an important financial investment. Many homeowners expect the value of their homes to climb over the years. They hope that home equity can contribute to their retirement funds, becoming a source of wealth in their later years through the process of drawing down home equity or selling their home and downsizing to realize some of the gains they’ve made through homeownership. It’s undeniable that homeownership is an important path to wealth, and you need to know that your home will still be standing to realize that wealth.

Protecting your investment is about protecting your family. This guide will show you how to protect your investment when you have to file a home insurance claim. It will explain how to:

• Prepare your home insurance claim paperwork and evidence.

• Get help filing a large or complicated insurance claim.

• Choose the right home insurance the first time you buy a home.

Tips for Preparing Your Home Insurance Claim

When your home has experienced significant loss, one of the first things you should do is inform your insurance provider of the loss and that you are about to make a claim. Once that process begins, you will have to prepare some paperwork and evidence to back up your claim. Here’s what you will need to do:

#1 Create a Schedule of Loss

A schedule of loss is a document that outlines all of your lost belongings. It can be created by you, the homeowner, your insurer, or a third-party assessor. Your insurance adjuster will guide you on which option they are going with. Creating it yourself can feel overwhelming, but it allows you to make sure that all of your belongings are represented and that the insurer gets a more accurate representation of the extent of your losses. Do not rush this process, it can take time to recall all the items in your home that were damaged. Consider supporting your list with evidence of ownership, and evidence of value such as receipts or links to re-purchase the item.

#2 Photograph and Video Damage to Your Home

Having video or photographic evidence of a loss is always a good idea in case disputes come up about the extent of a loss after work has begun to restore your home. In the case of a fire, wait for clearance from the fire department to re-enter your home. Once it is safe, take videos and photographs of the structural damage to your home and visibly damaged belongings.

#3 Keep and Organize Receipts for Additional Living Expenses

A smaller but important part of your claim covers Additional Living Expenses, such as renting a temporary accommodation for your family, costs for storage and moving, money spent on additional mileage, transportation, or food beyond your normal expenditure as a result of displacement from your home.

Keep all of your receipts for expenses like these as the insurer will need to review these before reimbursing any funds. If the insurer sends you an advance payment, you will have to submit receipts to show that the funds were spent on coverable expenses before they will send additional funds.

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Who Can Help When You File a Home Insurance Claim?

After a fire has damaged or destroyed your home, who do you turn to for help? In the immediate aftermath, you may look to family, friends, and non-profit organizations to make sure that you and your family have shelter, clothes, and resources to meet your needs.

Even as you look after your family’s most urgent needs, it is not long before you have to inform your insurance company of the loss and start the process of filing a claim. Filing a home insurance claim after a fire is no small matter. A small fire can result in tens of thousands of dollars of damage, and a major fire may mean that you have to rebuild your home from the ground up, along with replacing all of your belongings.

Filing an insurance claim worth hundreds of thousands of dollars is too much to take on yourself. The language of insurance policies is complicated, and your responsibilities can feel overwhelming. There are professionals who can help, but understanding who they are and what they can do is critical.

What Is an Insurance Adjuster?

An insurance adjuster is a professional who will be assigned to your claim early on in the process. They will assess the damage done to your property, including the structure of your home and the contents lost or damaged in the fire.

However, it is important to understand that the insurance adjuster does not represent your interests. Many insurance adjusters are employed by the insurance company. An independent insurance adjuster may work for themselves or a third-party firm, but the insurance company pays their cheques.

It is their job to facilitate the creation of a Scope of Work for the repairs or construction that need to be done by contractors and to evaluate the lost contents that you are claiming. Based on this information, they will assess the value of the loss.

There are also companies known as the public adjusters. This is a company you can hire, where they do work for you, and they are paid by you. You can also receive help from an insurance claims lawyer.

Public Adjuster vs. Insurance Claims Lawyer

Who should you seek help from between these two options? Insurance claims lawyers offer many of the same services as a public adjuster and then some. Firms like Virani Law will simplify complex legal language involved in your home insurance claim, help you understand your coverage, and assist with managing the paperwork that you need to file.

However, they can do much more than that. One of the more valuable parts of an insurance claims lawyer’s services is how they negotiate with the insurance company. When an insurance company uses pressure tactics to reduce the amount they have to pay you, an insurance claims lawyer understands how to push back and secure a fair settlement for you. They can also review the insurer’s position to determine whether their position is backed by the policy, or whether their position is based on an incorrect interpretation of the policy.

Insurance companies are increasingly worried about large payouts for natural disasters like wildfires, and events like these lead to complications when you try to file your claim. Not only can an insurance lawyer help secure a fair payment, but they can also push when there are unfair delays. They work in your best interests.

Getting the right help can make a considerable difference when you have a large sum of money on the line. Talk to the right person for help with your home insurance claim.

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Choosing the Right Home Insurance for First-Time Buyers

As a first-time homebuyer, finding the right home insurance can feel overwhelming, but it’s a crucial step in protecting your biggest investment. Home insurance is more than just a safety net. It’s peace of mind, shielding you from unexpected events like natural disasters, theft, or property damage. It’s also peace of mind for your mortgage lender, who has likely required that you get home insurance.

While the requirement from your mortgage lender can feel like another box to tick, simply getting the cheapest available home insurance is often a costly mistake in the event of a disaster.

Not all policies are created equal, and strictly trying to save on premiums can cost you if you ever have to make a claim. Understanding how insurance coverage works and its relationship to the premiums you pay can help you make more informed decisions before you have to make a claim.

How Home Insurance Premiums Work

There are many factors that go into the insurance premiums that you pay on a monthly or annual basis. Some of these factors include:

• The quality of your coverage. As a general rule, the better and more extensive your insurance coverage, the higher your premiums will be.

• The size and condition of your home. Older homes may be more likely to become damaged.

• The location of your home. If you are located in an area that is susceptible to natural disasters like wildfires or flooding, you may have to pay more in premiums. Local crime rates may also be a factor when insuring for theft and vandalism.

• The claims history of the property. If there is a history of claims made on the property, even if they were made by previous homeowners, you can wind up paying more for your insurance.

How Deductibles Work

A deductible is the amount you agree to pay out of pocket before your home insurance kicks in to cover a claim. For example, if your deductible is $1,000 and a covered incident causes $5,000 in damages, your insurance will pay $4,000 while you cover the first $1,000. Deductibles were created to prevent homeowners from claiming every single minor loss and to mitigate the amount that the insurer has to pay. Typically you do not have to pay the deductible out of pocket, but if you are proceeding with opening a claim, the deductible amount will be deducted from any funds paid out from the policy.

Higher deductibles often result in lower premiums, but that may translate into higher upfront costs when you have to make a claim. It’s important to choose a deductible that balances affordability with your financial ability to handle unexpected out-of-pocket expenses.

When you’re choosing a home insurance policy, consider the size of your emergency fund and how much you can pay in the event of a loss.

There are ways you can save on your home insurance coverage, but getting the cheapest policy may not be the smartest idea. Talk to your insurer about home improvements that you can make to reduce risks and lower your premiums.

Protecting your home starts with the insurance policy you choose, but it can also extend to knowing how to make a claim and when to get help with one.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.