Catastrophe… Now what?

This helpful guide is intended to give you easy to understand instructions for disaster recovery. Disastrous property losses can be overwhelming on so many levels. Seeing the news reports of Samaritan’s Purse sifting through remains of homes in the Black Forest Fires to recover sentimental momentos is an image not easily forgotten. When a fire or tornado ravishes our community, it’s truly tragic.

It can help to have some simple instructions and tips in one place to get moving in the right direction.

How do I report my Insurance Claim?

  1. Report your claim to your insurance company by calling or emailing the claims number on their website. Our office can assist in looking this number up for you. In the case of a complete loss, you may not have quick access to your policy number. The claims department should be able to locate this for you when you provide them your address and personal information.
  2. An adjuster will be assigned to you by the claim handler who takes your call. This adjuster will contact you within a few days to set an appointment to inspect your property damage. Keep their name and direct contact number in a safe place. If you are mobile, you may consider adding them to your phone contacts for quick reference. Depending on the structure of your insurance company, you will likely have multiple conversations with your adjuster over the next few months. Sometimes it is easier to delete a phone contact later than to locate a scrap of paper with the adjuster’s name and phone number when you are not in your daily routines.
  3. In the event of a total loss, many insurance companies will have measures in place for temporary housing under a “loss of use” rider. Be sure to confirm your benefits regarding temporary housing while on the initial call. If you do have this coverage, be sure to save all receipts from your relocation expenses for reimbursement later.

After I file my insurance claim, what should I expect?

Your assigned adjuster will perform an onsite inspection of your property damage. We consider ourselves to be your advocate and when requested can make ourselves available to be present at the time of the adjuster’s inspection and measurements. Please call to let us know when your adjuster will be there if we can serve you in this way. Let your adjuster know we will be present to inspect the damages with them.

Prior to meeting with your adjuster, we have the option of using an open ended contingency contract.  This assures the adjuster that he is meeting with someone that has been authorized by the insured to be present at the meeting and is mutually working with the client to restore the property. Our contingency contract is very similar to the type of contract real estate agents use. It is contingent upon the approval of repairs by the insurance company to be binding. In the case of a catastrophic loss, approval of a claim would be expected, but this allows us to serve you in this capacity. Depending on the level of damages, we will discuss how we can best serve you, from roof replacement to other restoration needs.

It is important to note that in general the insurance company initially determines the scope and cost of the job, not the contractor. This is why contingency contracts are helpful. The price and scope of covered repairs can be adjusted later through negotiation as necessary. The adjuster will provide the initial blue print to the scope of repairs.

The adjuster came out, now what?

Within several weeks, you will receive a breakdown from your insurance adjuster listing the items on your home to be replaced and/or repaired in what is called a Claim Summary. This spreadsheet is either mailed to the latest address on file or uploaded into your online account set up for this claim. USAA uploads their claim summaries into the member profile.

It will be important to provide a copy of this to your project manager or our office via fax or email, so that we can review the data to ensure that an adequate settlement is reached. Depending on the experience and scheduling demands on the adjuster, there may be details the adjuster has overlooked. They are extremely busy following a catastrophic storm, and sometimes new adjusters are hired to fill in. If there are missing items on the claim summary, it will be noted and negotiated. The insurance company will most likely fund these added repairs through a supplement. Each tradesman involved in your rebuilding process will need a copy of the adjuster’s initial claim summary.

Our office assists in this process to make it easier for you and your family in this trying time. We are very experienced in this process and understand the claims policies and procedures for the different insurance companies, making the process go more smoothly for everyone involved.

When should I Expect My Insurance Payments?

Insurance plans are written two different ways. They will usually be either Actual Cash Value Plans or Replacement Cost Coverage Plans. Some people chose to save money on their premiums by electing to have an actual cash value policy. If you have an Actual Cash Value insurance policy, you will receive one check or direct deposit around the same time of your Claim Summary. This payment will equal the adjuster’s figure for restoring your home based on his or her calculations, minus the depreciation for the age of the home and minus the amount of your deductible.

Here is an over simplified example for clarification. For this example, let’s look at the roofing portion of a claim only. The amounts of depreciation will vary based on the life expectancy of each part of your home.  Let’s say your roof is made up of 30 year shingles that are 15 years old (50 % depreciation) with a $1,000 deductible. If the price of your new roof is $10,000, your insurance company will pay roughly half of the replacement cost and then withhold the amount of your deductible ($5,000-1,000). The only payment you would receive would be about $4,000 (plus any negotiated supplements for omitted items.)You would be responsible for paying balance out of pocket. This could be catastrophic in itself when you are considering the impact of depreciating every part of the home in a full loss claim. Actual Cash Value policies are risky to say the least.

Hopefully you have elected a Replacement Cost Value insurance policy instead. You would then receive your funding in two separate payments. You would still receive the initial Actual Cash Value check with the adjuster’s claim summary to get the work started. However, when the repairs are completed, you can request a second check from your insurance company for the balance of what has been determined to be your total Replacement Cost. This final payment is referred to as the Recoverable Depreciation.

To keep our same scenario above, if you had no other changes to the claim summary, this recoverable depreciation payment would be for $5,000, or the amount they withheld for the depreciation of the aging roof. You are still responsible for your deductible.

What if my claim summary does not adequately cover the cost of the repairs?

If this adjuster’s summary does not adequately cover the expense of a quality roof replacement, we will negotiate to get what you deserve. This is when having a seasoned insurance restoration contractor who understands the insurance process is vital. This back and forth process may take weeks or in some cases months, depending on availability of your adjuster. It is important to be patient during this process. The insurance companies have certain steps or layers of resistance they go through as a rule. We will be diligent on our end to reach out to the adjuster. By the end of negotiations, we are usually very successful in obtaining supplements to cover everything that should legitimately be included in your claim.

What if my mortgage company is listed on the insurance check?

The checks from the insurance company are generally written to both you (the policyholder) and your lien holder (mortgage company) if applicable. It must be endorsed by both parties. It does make sense when you consider that your mortgage company has a vested interest in your completing the repairs. However, it isn’t always convenient.

It takes time for the mortgage company to endorse the check and return it to you, so do NOT hold on to this check. Send it off immediately to the lien holder for endorsement. Mortgage companies almost always have paperwork that will need to be completed before releasing an endorsed check back to you. It is helpful to call the mortgage company directly to secure the documents from them and take care of any requirements they have. Quite often we complete and have notarized lien waivers given to us from our clients as part of this documentation process. You will want to ask about scheduling inspections of completed repairs as the contractors cannot do this for you.  In the case of a large claim, some mortgage companies set up a schedule of draws and escrow the insurance funds.

It is helpful to know that many banks hold insurance checks for up to 10 days before releasing funds. Please don’t assume that the funds will be available the same day you deposit them into your account. It is better to ask the bank representative when the funds will be available to you.

Will an insurance supplement slow down the progress of my repairs?

You may be one of the fortunate ones whose adjuster adequately funds the project from the beginning. If so, as soon as you have received and processed your first check from the insurance company, you could begin the rebuilding process.

If it is apparent that critical components and repairs have been omitted from the adjuster’s initial estimate, it is in your best interest to take the time to have them issue a supplemental payment to cover the additional scope of work. This may be a simple process that could be finalized within a few days. However, if a larger, more involved supplement is needed, this process could delay the recovery process. We have helped clients who came to us a full year after the Black Forest Fire and had been unable to resolve her supplement. We follow up diligently to avoid any unnecessary delays. At times a phone call from the insured can speed the process up dramatically, but we consider it our privilege to assist in this part of the process when the situation demands it.

How do I recover the depreciation withheld by my insurance company?

At the completion of the job, we will notify your insurance company in writing of the repairs we have completed and request the final payment be sent to you. If you have completed some of the repairs yourself, we can instruct you or assist you in recovering that depreciation as well. Our office makes the necessary follow up calls to confirm the depreciation is released by check or direct deposit. Depending on the number of claims being processed by your insurance company, this can be a quick turnaround or can take several weeks. We are flexible with our clients to allow for the receipt of these funds before collecting a final payment for our efforts.

Any tips to making this process go more smoothly?

This can be a very confusing process, especially if it is your first claim, but we will be here to help you along the way to make sure your interests are not overlooked by your insurance company or an overworked, well-meaning adjuster. Feel free to call us about any part of the insurance process or to discuss specific repairs to your home.

If possible before a disaster occurs, take time now to read over your policy to make sure you have the type of policy that will meet your needs. The Replacement Cost Value policy is the most comprehensive coverage in which your depreciation is recovered. Make sure your deductible is set at an amount that you can fund in the event of a claim. Your agent can usually email you a copy of your insurance policy if your records are no longer available due to a catastrophic event.

Take a deep breath and know that you will get through this. Integrity Roofing and Painting will do whatever we can to assist you in the repairs and correspondence with your insurance company. We have helped others who have gone through these types of losses and will be here for you if you need us.