3 major home insurance mistakes to avoid

Contents
  1. 20 Mistakes to Avoid When Filing a Home Insurance Claim
  2. 1. Filing lots of claims for small incidents. 
  3. 2. Waiting to notify your insurance company
  4. 3. Cleaning up before your insurance company’s adjuster arrives 
  5. Record the brands and models of damaged items
  6. 5. Not keeping your own list of what’s been destroyed or damaged — including photographs.
  7. 6. Waiting to repair immediate structural hazards
  8. 7. Paying too much for a temporary repair job 
  9. 8. Not keeping receipts for the most expensive appliances and items in your home 
  10. 9. Not keeping receipts from your temporary housing/living costs while your home is being repaired
  11. This can be summed up in one basic phrase: don’t sell yourself short. 
  12. 11. Forgetting or not writing down your claim reference number 
  13. 12. Not making copies of everything you send to your insurance company
  14. If you think your insurance company missed something, have them come back
  15. It’s important to understand how your policy will pay out before an emergency
  16. 15. Not doing thorough research on local contractors AND 16.  Not getting estimates from multiple contractors 
  17. 17. Not knowing you can hire an independent adjuster
  18. 18. Not looking at the “exclusions” section of your contract beforehand
  19. 19. Not filling out claims forms accurately or thoroughly 
  20. 20.Not returning claims forms quickly 
  21. Major DIY mistakes that can affect insurance | Coverage.com
  22. 1. Failing to get the right permits—or any permits at all
  23. 2. Working in an unsafe environment
  24. 3. Measuring Once
  25. 4. Using the wrong tools and materials
  26. How to Prevent DIY Disasters
  27. The takeaway
  28. 3 major home insurance mistakes to avoid
  29. Avoid these 3 home insurance mistakes
  30. 1. Not having enough insurance coverage 
  31. 2. Not having the appropriate coverage in advance 
  32. 3. Not having natural disaster insurance 
  33. Avoid these 4 big home insurance mistakes
  34. Skipping flood insurance
  35. Not securing coverage in time
  36. Choosing a deductible you can’t afford
  37. Not having enough coverage
  38. More from NerdWallet:
  39. These Are The Worst Home Insurance Claim Mistakes
  40. Home Insurance Claim Mistake No. 1: Failing to Read Your Policy
  41. Home Insurance Claim Mistake No. 2: Not Having the Right Coverage
  42. Home Insurance Claim Mistake No. 3: Not Having a Home Inventory
  43. Home Insurance Claim Mistake No. 4: Failing to Maintain Your Property
  44. Home Insurance Claim Mistake No. 5: Poor Communication
  45. Home Insurance Claim Mistake No. 6: Waiting
  46. Home Insurance Claim Mistake No. 7: Trying to Tackle a Big Claim Alone
  47. Home Insurance Claim Mistake No. 8: Not Documenting the Damage
  48. Home Insurance Claim Mistake No. 9: Cleaning Up Too Fast
  49. Home Insurance Claim Mistake No. 10: Filing Too Many Claims

20 Mistakes to Avoid When Filing a Home Insurance Claim

3 major home insurance mistakes to avoid

So, you need to file a home insurance claim. Your house — whether it’s one you’ve invested in, one that your family has lived in for countless years, or it’s a shiny, brand-spanking-new home you just built — has taken some major damage. It could be the result of an accident, natural disaster, or crime. Maybe an earthquake hit, or a tree fell on your roof. 

Regardless of the cause, your next step is filing a claim so you can get reimbursed for any damages covered by your homeowner’s insurance. It sounds a long and daunting process. But if you know what to avoid, it could actually be quick and easy. 

1. Filing lots of claims for small incidents. 

Know whether you should file a claim — or cut your losses.

Something a lot of people don’t realize is their premiums could go up as a result of filing many claims. Is the cost of repairs under $10,000? Have you already filed any home insurance claims in the last few years? If so, take a second to think: is this situation really something you need to contact your insurance company about, or can you solve it on your own? 

2. Waiting to notify your insurance company

As soon as you realize that you need to file a claim, you should contact your home insurance company. Whether it’s through a 24-hour hotline, a mobile app, or even speaking to a representative in person, you need to do it immediately. The sooner the company can send someone over to survey the damage and make some estimates, the sooner your home will get fixed. 

Also, if your home was damaged as a result of a large natural cause an earthquake, a flood or a tornado, there’s a good chance somebody else’s house was too. Don’t wait until everybody in the area is trying to file a claim at the same time. It’ll take ten times longer. Instead, be smart and just call ahead as soon as filing a claim makes your to-do list.

3. Cleaning up before your insurance company’s adjuster arrives 

Think of it this way: your home is now a crime scene.

That might sound dramatic, but that’s exactly how you should treat your home and the items in it, no matter how dirty, damaged or flat-out broken they are.

It might go against common sense, but cleaning up before the adjuster (the insurance representative who surveys your property and makes an estimate) arrives is a big mistake.

The adjuster needs to accurately total the damage so you can get a full reimbursement. If you start tidying up, you might lose out on money that’ll help make your home brand new again.

Record the brands and models of damaged items

Again, you’re going to want to leave these things exactly as they are, even if they’re broken beyond repair. If the adjuster can’t properly inspect them, you can’t get reimbursed for those damages.

Plus, you’re going to want a list of brand names and, if you can manage it, model numbers of the items you lost. That way you get reimbursed for the proper value of your item, instead of generic, low-end appliances.

I know you just watched Tidying Up With Marie Kondo on Netflix, but be strong.

5. Not keeping your own list of what’s been destroyed or damaged — including photographs.

It’s important to keep your own list so that if the insurance company misses anything, you can follow up with them. Adjusting is a stressful job — employees have to account for all kinds of damage in a short period of time.

If they’re focused on a broken wall or roof, it might be easy for an adjuster to miss something small. This is especially true in cases where a natural disaster affects your entire area. The insurance company might be working overtime to resolve multiple claims.

If there’s anything you want to add to the claim, make sure you write down what it is, when you bought it, and how much it cost.

Also, photographs are the best evidence. If you need to prove that something was damaged, a couple of good photos will solve the problem a lot more quickly than any other approach. 

6. Waiting to repair immediate structural hazards

When you’re starting repairs on your home, it’s important to have priorities. A broken roof or a wall with a hole in it should be your first targets no matter what, even if you’re really partial to the TV in your flooded basement. Make sure you let the insurance company know about big hazards, and then contact local contractors who can fix them.

The entire process of filing a claim can take time, but tackling the major problems first can save you a lot of headaches. 

7. Paying too much for a temporary repair job 

Even though you should prioritize immediate hazards, don’t spend too much money on a quick repair if it’s only a short-term fix. If you spend too much on temporary repairs, you could reach the payout limits of your contract long before you get to necessary, long-term renovations. Save the big bucks for construction that you’ll be happy with years down the road.

8. Not keeping receipts for the most expensive appliances and items in your home 

The biggest appliances in your house probably add up to a lot of money: your dishwasher, washing machine, dryer, refrigerator, and TV are all serious investments.

In the case of a natural disaster or other incident, where one or more of those items is broken, you could be looking at a loss of thousands of dollars.

That’s why it’s a good idea to keep the receipts for your most expensive appliances when you buy them. 

When it comes time to file a claim, having those receipts will make getting reimbursed for those items a lot easier. You’ll be able to immediately show your insurance company when those items were purchased and how much they were worth. 

9. Not keeping receipts from your temporary housing/living costs while your home is being repaired

If your home suffers catastrophic damage and becomes unlivable, most insurance policies will cover some or all of your living expenses while your house is being repaired.

This could include temporary housing, food, household goods, and even some medical expenses (check your specific policy to make sure).

So if you want to be reimbursed for those costs, make sure to keep any receipts from your hotel, restaurants, and groceries while you wait for construction to finish.

This can be summed up in one basic phrase: don’t sell yourself short. 

Even if you overestimate the reimbursement, your insurance company will negotiate until you get to the right price for your possessions and property. If something is truly broken, don’t be afraid to submit it with your claim. In this case, overestimating slightly is probably better than underestimating.

And if you’re offered a lower value than you think is fair, it may be worth it to do some negotiation of your own. You’ll have to come up with proof in the form of receipts, photos or other evidence, but it may be worth it. 

11. Forgetting or not writing down your claim reference number 

After the initial conversation you have when filing a claim, the reference number your company gives you will be the most important information you take away. Having that number will let you quickly access the progress on your case and any information related to it. Not having that number, on the other hand, will probably just give you a headache.

12. Not making copies of everything you send to your insurance company

Just holding on to your reference number, staying organized with any communications you send to your insurance provider will pay dividends in the long run.

If they lose something or if you forget whether or not you’ve already sent them a couple of receipts or emails, you can look at your records for an easy fix.

Keep track of who you talk to, what you talk about and which documents you send them.

If you think your insurance company missed something, have them come back

A lot of people might not know this, but in most cases, you’re not tightly bound to the initial estimate. If you feel that the costs don’t tally up, or that there’s something the adjuster missed, you can schedule a second visit to claim an additional amount of money. It might feel intimidating to ask an adjuster to come a second time, but it could pay off in the long run. 

Also, if you feel shortchanged and suspect something is deeply wrong, remember that you can always speak with a lawyer or a public adjuster. Many offer free consultations. Furthermore, some may only ask for payment if they win additional funds from your insurance company. In some states (Florida is one example) the laws actually favor policyholders over companies themselves.

It’s important to understand how your policy will pay out before an emergency

Actual Cash Value (ACV) and Replacement Cost (RC) are the two most common kinds of property insurance policies, but they couldn’t be more different.

If you have a Replacement Cost policy, your insurance provider will pay for the original cost of any broken items.

In other words, if you bought a $1000 dishwasher last year, but your home flooded and now it’s broken, your insurance company will reimburse you for $1000. 

If you have an Actual Cash Value policy, your provider will pay you an amount that takes into account cost depreciation. So if that dishwasher was worth $1000 last year, but now it’s only worth $700 after a year of use, your insurance company will reimburse you for $700. 

Knowing which policy you have is essential.

15. Not doing thorough research on local contractors AND 16.  Not getting estimates from multiple contractors 

These two mistakes go together. Your insurance company will ly recommend a contractor to take care of repairs on your home. It’s probably a good choice, but it doesn’t hurt to do a little research.

Call a few contractors in your area, get their rates, tell them about the job, and find out who gets the best reviews.

Then, if you think the contractor your company recommended is still the best choice, you’ll know you’ve made an informed decision.

17. Not knowing you can hire an independent adjuster

Not everybody will need to think about hiring an independent adjuster. But in this case, knowledge is power.

If you’re unsure whether the adjuster sent by your insurance company will give you a fair estimate, you can hire an independent, state-licensed adjuster.

It’ll cost you: they’ll take a small percentage of your insurance settlement as payment. But they’re not obligated to lower costs for your insurance company, so they may give you a better estimate.

Again, you might not need to do this, but it’s good to know you have the option.

18. Not looking at the “exclusions” section of your contract beforehand

Before you actually call your insurance company and begin the claim process, take a second look at your contract. Under a section labeled “Exclusions,” or something similar, you’ll find all the costs your homeowner’s insurance doesn’t cover. If you already know what doesn’t fall under your contract, you can avoid trying to rely on coverage you don’t have. 

19. Not filling out claims forms accurately or thoroughly 

It’s tempting to just speed your way through claims forms. They’re boring, and it doesn’t take very much brainpower to fill them out. But they’re a necessary part of the process.

And it pays dividends to complete them with care. The more thoroughly you document any damages to your property, the more ly you are to get reimbursed for it.

If you go light on the details, your claim might get undervalued.   

20. Not returning claims forms quickly 

So, you just spent a couple of hours filling out paperwork your insurance company sent over. Now, your only goal is probably to eat, sleep, or do anything not insurance-related.

But a better move would be to just go to your email (or your local post office) and send those forms as quickly as possible.

The sooner you get those forms out, the sooner you’ll receive the money you need to fix your property.

Источник: https://www.agilerates.com/20-home-insurance-claim-mistakes-to-avoid/

Major DIY mistakes that can affect insurance | Coverage.com

3 major home insurance mistakes to avoid

Owning a home is a very rewarding experience for most people. Homeowners have the ultimate freedom to decorate, landscape and remodel without needing approval from anyone else. But sometimes, a well-intentioned remodel can have negative impacts on insurance.

A survey from Trulia found that home remodeling is on the rise. Roughly 90 percent of homeowners have plans to remodel their home at some point in time. To save money, many people try to complete renovations and remodeling on their own, rather than hiring a professional.

DIY home projects can be a good option. However, DIY projects are often much more complicated than they appear on TV and in magazines. If you make a mistake, it can come with consequences, such as a higher insurance premium. 

In this article, we’ll lay out some of the most common DIY mistakes that can affect your insurance and explain how to avoid them.

1. Failing to get the right permits—or any permits at all

When you hire a professional contractor, they are legally required to obtain work permits from your local government. When you’re doing a DIY project yourself, the same standard applies.

Permits are required for DIY home projects for a few reasons. A permit protects the person doing the work against fines or penalties as it ensures you’re not breaking codes or laws, and it tells your city who is liable if a repair results in some type of loss. Most importantly, permits are usually required by a homeowner’s insurance company.

When you’re doing a DIY job, updating plumbing or electrical work, there’s an increased risk for home insurance claims if you make a mistake. 

Without a permit and licensed contractor, the insurer considers that the homeowner is being negligent, and insurers never pay out claims resulting from negligence. Your coverage could even get cancelled. 

If you fail to get a permit for your DIY project, and you have to file a home insurance claim due to a mistake, it could be extremely costly. Not only will you have to pay out-of-pocket for the loss, but filing a claim can cause your insurance premium to increase significantly.

2. Working in an unsafe environment

If you have minimal experience as a DIY contractor, you may not be taking the necessary safety precautions. According to the CDC, 500,000 people are treated every year for ladder injuries. Other safety hazards, failing to wear hardhats, safety goggles, or failing to protect yourself from paint fumes, can hurt you or others in your household.

From an insurance standpoint, it’s important to have the right type of coverage before starting a DIY home project. “Another consideration is your liability protection if friends or family (who aren’t covered under your policy) help you work on a DIY project.

If someone gets hurt, you may be responsible for their medical bills or get involved in a lawsuit.

Make sure you have enough liability included with your home insurance or have a separate personal umbrella liability policy to protect your finances,” says financial advisor Laura Adams.

If you have to file a home insurance claim following a loss, an increase in cost of home insurance is not the only thing you should keep in mind. If you get injured while working on a DIY project, it could also affect your health insurance premium if the project results in chronic problems or expensive medical bills.  

3. Measuring Once

Any professional DIY-er knows this rule of thumb—measure twice, cut once. But in an attempt to save time, many people fail to follow this rule when it comes to home projects.

When you’re hanging drywall, putting in walls, floors, cabinets, or pipes, it’s always best to err on the side of taking longer to complete the project.

Remodeling with this idea in mind can save you from making serious mistakes.

Being accurate is especially important if you’ve failed to plan or measure something essential, a load bearing wall or modifications to your roof. If you install an important feature with the wrong dimensions, it can lead to a number of issues, and you guessed it—additional homeowners insurance claims.

For example, say you replace your roof, and a few shingles don’t quite sit flush with the frame of the house. After a major rainstorm, you may notice there is water damage and mold in the attic space. You can file a home insurance claim for the water damage, but when the insurance company finds out you made a mistake with the roof repair, your claim may ly be denied.

4. Using the wrong tools and materials

Another common DIY home project mistake is not using the correct tools and materials for the job. Unless you contact the original home builder, it can be tricky to determine exactly which materials were used for things the roof and ceiling.

Generally, using the wrong tools or materials isn’t the end of the world—assuming the job is done correctly. However, the materials you use (or don’t use) could have an impact on the value of your home, in addition to overall quality and consistency of repairs, which could cause your insurance premium to change.

Here’s an example. Say you decide to replace your metal roof because it’s getting older, but you want to cut costs and opt to use a plastic material instead. Metal roofs are considered very durable, so it’s cheaper to insure a home with a metal roof than it is to insure a home with a plastic roof.

If your insurance company finds out that you’ve swapped your metal roof for a plastic one, it could cause your insurance premium to increase. In that case, it ends up being cheaper to invest the money in a new metal roof to avoid the rate hike. Combining new and existing materials can have a similar effect.

How to Prevent DIY Disasters

It can be fun to take on DIY projects, but we’re not all HGTV-qualified. Before you embark on a DIY home project, it’s important to take preventative measures to avoid disasters. The first order of business should be to contact your insurance company.

Laura Adams suggests, “Before you start a substantial do-it-yourself home project, it’s critical to communicate with your insurance company or representative about your plans. You may need to adjust your amount of homeowners coverage or even get an additional type of insurance for the duration of the project.”

Here are some ways that you can prevent a DIY home project disaster:

  • Hire a contractor, or consult with a professional before starting the work
  • Research your planned project carefully
  • Practice the skills you’ll need to do the job right
  • Prioritize safety by investing in the right equipment and protective gear
  • Consult with your insurance company about your planned work

The takeaway

  • DIY home projects can be fun and affordable, but they come with risks
  • If you make a mistake, you might have to file a home insurance claim, which will increase your rate
  • Before you start a DIY project, know the common mistakes and take the necessary steps to avoid them

Regular home maintenance and repairs are one of the hidden costs of homeownership, so going the DIY route often seems the cheapest option. But even the smallest error could result in losing far more money than what it would have cost to hire a professional to begin with.Before you jump on the DIY bandwagon, make sure you know what the common project errors are and how they can potentially affect your insurance rate. When in doubt, hire a professional.

Источник: https://www.coverage.com/insurance/home/diy-mistakes/

3 major home insurance mistakes to avoid

3 major home insurance mistakes to avoid

As of October 2020, the U.S. unemployment rate was 6.9%, according to the Bureau of Labor Statistics (BLS). In April 2020, the unemployment rate reached 14.7%, its highest level since the Great Depression. The Federal Reserve forecasts the unemployment rate will not improve significantly until 2021.

Due to COVID-19, unemployment has become one of the most critical economic issues facing the country. As a homeowner, you may be trying to find ways to save money. Revisiting your home insurance policy to make sure you’re getting the best deal and that your home is properly covered makes good sense.

Avoid these 3 home insurance mistakes

Your home is your largest financial investment. Yet it is vulnerable if left unprotected from theft and vandalism, fire, a natural disaster, injuries suffered while on the property, or some other mishap. Many people think things this will never happen — until it does.

That’s why it’s important to visit Credible to explore your home insurance options and avoid these three main home insurance mistakes.

  1. Not having enough insurance coverage
  2. Not having the appropriate coverage in advance 
  3. Not having natural disaster insurance

1. Not having enough insurance coverage 

Underinsuring your home can be a costly mistake. Many homeowners only have enough coverage to cover their mortgage. But if your mortgage or the equity in your home is only worth 75% of your home’s value, you may only receive that amount if it’s destroyed. That may not cover rebuilding.

wise, you may have a policy that only covers the current value of your home. But, your home’s current value may not cover the actual cost to rebuild at today’s prices. That’s why it’s important to know what it will cost to rebuild and get coverage close to that amount.

This is also true concerning your personal belongings.

Comparing multiple insurance quotes can potentially save you hundreds of dollars per year. And, it’s so easy to get a free quote in minutes through Credible’s partners here.

Generally, there are two types of coverage—replacement cost and actual cash value.

  1. Replacement cost value. Un actual cash value insurance, when a tragedy happens, replacement cost insurance will replace your belongings at their current value.  For instance, if a fire damages your computer, and the cost to replace it today is $1,200, you are paid $1,200, even though you may have paid $1,000 two years ago.
  2. Actual cash value. Actual cash value insurance will reimburse you for the cash value of your personal belongings. However, your belongings are not worth as much as they were when you bought them because of depreciation, so you are paid the actual cash value at the time the tragedy occurs, not what you paid for them. 

DO YOU NEED HOMEOWNERS INSURANCE?

2. Not having the appropriate coverage in advance 

Unfortunately, it’s not uncommon to discover that your homeowner’s insurance policy doesn’t cover natural disasters, or only part of the damage is covered. Worse yet, the type of damage you suffer is excluded from your policy.

Most standard policies have hazard coverage, which covers the physical loss and damage to your property and possessions, and liability courage, which covers injuries to people while on your property, slipping on your front steps.

According to the Insurance Information Institute, standard coverage may also include damage from:

  • Explosions
  • Riots and civil unrest, vandalism and malicious mischief
  • Theft and vandalism
  • Volcanos
  • Windstorms and hail
  • Damage from an aircraft or vehicle
  • Fire and smoke damage
  • Falling objects
  • Lightning strikes
  • In-home water damage (from within the home only)
  • Snow, ice storms and sleet

You may also want to cover personal possessions expensive jewelry, musical instruments, cameras, or electronics that may be stolen or damaged. Or coverage for living outside your home while it’s being rebuilt. If someone slips on your front steps, you’ll want to have enough coverage to pay their medical bills.

Having enough insurance is vital. Having the appropriate insurance coverage is just as important. To ensure your insurance is suitable for your circumstances, visit Credible to check out plans, providers, and costs.

HOW TO FIND THE BEST MORTGAGE RATES AND FASTEST CLOSINGS

3. Not having natural disaster insurance 

Depending on where you live, you may need flood, earthquake, or region-specific insurance to ensure you have adequate home insurance in the case of a natural disaster. These coverages are not generally standard with most homeowners insurance policies.

Flood insurance is a federal program that accepts everyone who needs coverage, so it’s not hard to get. If you live in earthquake-prone areas, your insurance carrier may also require earthquake coverage to qualify for a mortgage.

Extra flood and earthquake insurance can cost from about $70 to $250 per month on top of your homeowner’s policy, depending on the value of your home and location, according to FEMA.

If you live in an area prone to bad weather or natural disasters, visit Credible to compare home insurance companies and plans.

If you're searching for a new policy, renewing your current policy, or investigating your options as a new homeowner, you may also want to consider if you want coverage not typically standard on most homeowners’ policies. Add-ons to your policy may cover things termites or other pests, mold, sewer backups, or damage due to lack of maintenance on the residence.

Not sure what type of policy or how much homeowners insurance you need, or to make sure you avoid any mistakes when signing up for a new policy, check out Credible today to explore all of your home insurance options.

RECORD-LOW MORTGAGE RATES WON'T LAST — REFINANCE BEFORE IT'S TOO LATE

Источник: https://www.foxbusiness.com/money/major-home-insurance-mistakes-to-avoid

Avoid these 4 big home insurance mistakes

3 major home insurance mistakes to avoid

For homeowners in coastal states, the 2020 hurricane season could mean financial disaster. Named storms are rolling in at a record pace, with as many as 25 expected in the Atlantic this season — twice the average number. After battering the Louisiana coast in late August, Hurricane Laura alone may account for as much as $12 billion in insured losses.

Even if you think you’re prepared, you may discover that your homeowners insurance doesn’t fully cover damage from a hurricane. To make sure you’re protected, avoid these four costly pitfalls.

Skipping flood insurance

Flood insurance is optional, and only 15% of American households buy it, says Mark Friedlander, spokesperson for the Insurance Information Institute.

But when a hurricane or storm hits, flooding causes more residential losses than high winds, according to a 2019 report from the U.S. Congressional Budget Office. That means most homeowners, even those with hurricane or wind coverage, aren’t insured for the most severe storm threat they face.

“The biggest error people make is they think it won’t happen to them,” says Patty Templeton-Jones, president of Florida-based insurer Wright Flood.

Almost nobody is immune. Flooding has affected 99% of U.S. counties since 1996, according to the Federal Emergency Management Agency. And even a little floodwater can be highly destructive; FEMA says an inch can cause as much as $25,000 in damage.

See: Major flooding in the South is a cautionary tale for all homeowners

Flood insurance typically comes from the National Flood Insurance Program via one of its authorized providers, and coverage is sold separately for the structure and contents of the home.

Not securing coverage in time

When a hurricane is on its way, it may be too late to add coverage to your homeowners policy.

“Don’t wait until the storm is coming,” warns Friedlander. “Most insurers will put a moratorium in place once a storm watch or warning is issued by the weather service, so you can’t make any changes to your policy.”

You’ll typically need to buy flood insurance at least 30 days in advance. Some states may also impose a waiting period if you purchase a policy for wind damage. Although most standard homeowners policies cover windstorm damage, owners without a mortgage can sometimes opt out.

See: What homeowners should know about the fine print in their insurance policies

If you don’t have windstorm coverage, or if you are among the 9% of U.S. homeowners who don’t have property insurance at all, insurers generally allow you to add it so long as there is no active hurricane watch.

Choosing a deductible you can’t afford

Many homeowners don’t pay a flat dollar amount per hurricane insurance claim as they would for a fire or theft. Instead, they pay a percentage of their home’s insured value before the insurer kicks in. The amount can range from 1% to 10%.

This means if your home is insured for $300,000 and you chose a 5% hurricane deductible, you could be responsible for up to $15,000 before the insurance company starts paying.

Also see: Two things that are most ly wrecking your retirement savings

Since a large deductible generally means a lower insurance premium, you may be tempted to accept a high percentage and hope you never need to file a claim. That can be a mistake, says Lynne McChristian, director of the Office of Risk Management and Insurance Research at the University of Illinois at Urbana-Champaign.

“People should never take a higher deductible than they can afford,” she says. “The amount you save in premiums is insignificant compared to the amount you would get at claim time.”

To avoid a potentially massive financial hit, make sure you’re comfortable with your hurricane deductible and the insured value of your home.

Not having enough coverage

The purpose of insurance is to ensure you can cover your costs after a disaster. But if you aren’t careful, you could come up short as expenses pile up in the wake of a hurricane.

“One big issue is underinsurance,” says Jessica Hanna, spokesperson for the American Property Casualty Insurance Association. “That only seems to come to light after a major storm.”

You may need to extend your coverage to account for high construction costs and demand for contractors after a hurricane. Also consider whether you have enough coverage to replace your personal belongings and pay the costs of living elsewhere while rebuilding.

Read more: This ‘incredibly powerful’ home-insurance policy will make payouts even if your property isn’t damaged

To make sure your coverage is adequate, Hanna recommends telling your insurer about recent home improvements and keeping an inventory of your home’s contents.

“This is a good time to do an insurance checkup with your insurer,” she says. “Smartphones make it so easy now — take pictures, take videos, store it in a cloud.”

More from NerdWallet:

  • Losing Employee Life Insurance Due to Job Loss: What’s Next?
  • How to Get Cash From Your Life Insurance Policy
  • What to Do if You Can’t Pay for Insurance Due to Coronavirus

Источник: https://www.marketwatch.com/story/avoid-this-4-big-home-insurance-mistakes-2020-09-21

These Are The Worst Home Insurance Claim Mistakes

3 major home insurance mistakes to avoid

Editorial Note: Forbes may earn a commission on sales made from partner links on this page, but that doesn't affect our editors' opinions or evaluations.

Since home insurance can be a complicated thing, it’s no surprise that filing a claim on your homeowners insurance can be, too—especially if you have extensive damage or a complex claim. But you can avoid some of the worst home insurance claim mistakes.

Your odds of filing a claim in 2020 might seem higher than ever. The eastern United States is heading into the peak of hurricane season, and the western U.S. has already started its annual fight against wildfires and whatever else Mother Nature throws in its path.

Nearly 6% of insured homeowners filed a claim in 2018, according to the most recent data from the Insurance Information Institute. About 98% of those claims were related to property damage (including theft).

If you suffer a loss and have to file a claim, there are a few things you can do on your end to help make the process run as smoothly as possible. Here are some common home insurance claims to avoid.

Home Insurance Claim Mistake No. 1: Failing to Read Your Policy

You could be forgiven for not reading your home insurance policy. After all, insurance policies can be impossible to read. But that doesn’t let you off the hook. At the very least, understand what the coverages in your policy mean, says Charlie Wendland, head of claims at Branch, an online insurance startup.

For example, some policyholders assume that “water backup” coverage is the same as flood insurance. It isn’t.

“Water backup is very specific to only limit coverage to damage caused due to a backup of a sewer drain or a sump pump,” he says. Misunderstanding (or failing to read) your policy can lead to disappointment and almost always results in a poor customer experience during the claims process, says Wendland.

Home Insurance Claim Mistake No. 2: Not Having the Right Coverage

“One of the worst mistakes a homeowner can make happens before a loss occurs,” says Gina Clausen Lozer, a partner at the law firm Berger Singerman. “It’s not having the right coverage.”

If you don’t have the right insurance, you could find yourself in a significant financial hole. A thoughtful conversation with an insurance agent can help you avoid these errors.

For example, if your policy has only actual cash value coverage for your possessions, and you’re expecting to be paid replacement cost, you’ll be very disappointed.

Some homeowners assume that damage from hurricane wind and flood water is covered by their home insurance policies. But that assumption could be a costly mistake.

Insurance companies in hurricane-prone regions might exclude wind damage, and flood damage is generally excluded from a standard home insurance policy.

A good hurricane insurance plan might actually be made up of three separate policies to ensure you have the right coverage in place.

The bottom line is that a policy’s exclusions can come back to bite you, especially if you live in an area that’s affected by natural disasters.

Home Insurance Claim Mistake No. 3: Not Having a Home Inventory

Another claim mistake that starts long before you have any damage: Not having a home inventory. This complete list of your possessions will be especially crucial if you have extensive damage. If you have to work from memory, you’re ly to forget some items and fail to include them in your claim.

Sure, you’ll remember your living room furniture. But will you remember all your kitchenware and items stored in drawers and closets? A home inventory will make your claim easier and faster.

Home Insurance Claim Mistake No. 4: Failing to Maintain Your Property

Home insurance is for unexpected damage, not problems that could have been dealt with.

Neglecting to maintain your home can lead to problems that won’t be covered by home insurance. For example, damage from a water pipe that suddenly bursts is covered. But a roof leak that you don’t fix could be denied because you didn’t take action to stop damage.

“Not noticing and reporting a potential claim, a slow leak, can lead to a claim denial,” says Sarah Loy, an agent with American National Insurance in Las Vegas.

Home Insurance Claim Mistake No. 5: Poor Communication

Most home insurance claim mistakes are the result of poor communication, according to Tim Barziza, a senior vice president at Chubb. “When filing a claim, homeowners can oftentimes be unclear when describing the damage to their property,” he says.

Poorly communicated claims by the homeowner typically result in delays, says Barziza, which can bog down the entire claims process. He recommends homeowners be as clear as possible about the damage when reporting the claim.

Home Insurance Claim Mistake No. 6: Waiting

Tim Felks, head of property claims at Farmers Insurance, says another mistake is waiting to file a claim. “Damage doesn’t get better with time,” he says. “Reporting a claim as soon as possible can help get repairs going sooner, lessening the time the insured is dealing with the repair process.”

You may have up to one year to file a claim (it depends on the state). But Felks says there’s no benefit to waiting. If your house gets hit by a tornado or singed by a wildfire, don’t wait.

Home Insurance Claim Mistake No. 7: Trying to Tackle a Big Claim Alone

Large and expensive claims can be very complex and take months to resolve. In the meantime, you can be dealing with multiple insurance adjusters and stacks of paperwork.

If you have extensive house damage, you may want to hire a public claims adjuster early in the process. This is someone who works on your behalf to deal with the insurance company’s adjusters, make sure you have the right documents and to meet deadlines.

A typical fee for a public insurance adjuster is 20% of the insurance settlement. Since they’ll help you get what you’re entitled to and lower your stress, it can be well worth it.

Home Insurance Claim Mistake No. 8: Not Documenting the Damage

A failure to document damage is the No. 1 error Jason Christiansen sees in claims. “It’s not taking pictures—documentation at the moment the damage is discovered,” says Christiansen, the co-CEO of Young Alfred, a home insurance site.

Photos are your friend when you’re filing a claim. Ideally, you’ll have “before” and “after” photos that show the extent of the damage to your home.

“This can go a long way in processing the payout,” says Christiansen.

Home Insurance Claim Mistake No. 9: Cleaning Up Too Fast

After an accident, you might be in a rush to clean up the mess. But cleaning up too fast can be a big financial mistake.

Homeowners sometimes throw away items that were damaged in a fire or flood before the total damage is documented. And they discard receipts that they need to support a claim. If you’re filing a claim for a damaged item, keep it until you have sufficient documentation that it’s been damaged, such as photos or repair estimates.

It’s important to keep a thorough paper trail during a claim. Not doing so could be a serious home insurance claim mistake.

Home Insurance Claim Mistake No. 10: Filing Too Many Claims

Insurers will take a look at your claims history when setting your rates. Homeowners and auto insurance claims submitted in the past seven years can be found by insurers in what’s called the Comprehensive Loss Underwriting Exchange (CLUE) database. The more home insurance claims in your history, the more expensive your home insurance premiums will ly be.

That’s because insurers correlate claims to a higher risk of filing more claims in the future. Risky customers get higher premiums. So, if you can, it may be better in the long run pay for small repairs yourself rather than filing an insurance claim.

Источник: https://www.forbes.com/advisor/homeowners-insurance/claim-mistakes/

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