Financial Education
Hope for the best ... plan for the worst
No one wants to think about being the victim of a natural disaster. But as recent hurricanes have shown, prior preparation is the difference between recovering rapidly, and suffering serious consequences.
The calm before the storm
Make a detailed and accurate list of your items. Photos or a video help because they give you tangible proof in case your insurance company disputes your claim. The burden of proof is on the insured, not the insurance company, to prove what you own, so take the time to do it thoroughly. And don't limit your inventory to expensive items such as electronics and jewelry-also include your clothing, furniture, tools, and other items that your policy covers. It may seem like a chore at first, but in the event of damage or loss you'll be glad you did.
For "high-ticket" items such as antique furniture, expensive jewelry, or even valuable sports memorabilia, you should have a professional appraiser examine the piece to determine it's worth. The Appraiser Association of America, Inc., located online at www.appraisersassoc.org, is a non-profit organization that can help you in determine the worth of your collectibles.
Keep your policy information (including policy number and the policy itself), list of valuables, photos and other information in a secure and accessible location. And an old shoebox shoved under the bed will not work-most home improvement stores carry small, fireproof safes that range in price from $60 for a portable, up to $300 or more for wall- or floor-mounted models. You will need all of this information to file a claim, and having it all ready to go can make the process easier in your time of need.
After the storm
It is often difficult to focus on what needs to be done after an event such as a tornado, hurricane, flood, or fire-the sadness and sense of loss can be overwhelming. If you do find yourself the victim of a disaster, the first thing you should do is survey and document the damage.
Take photographs, a detailed inventory of what is damaged, and then create a folder containing all of this information. Keep track of conversations with any insurance company officials and agents, and make sure to record the day and time, along with the name, phone number and job title of everyone with whom you speak.
Also, if you have to buy materials to secure your property, make sure to keep receipts for those items. The materials you use to board up windows or cover holes in your roof are covered in many policies.
Dealing with the insurance company
Filing the claim can be the most difficult step of all, but if you have your list, photographs and policy information, things should be much easier.
If your policy covers temporary housing, have that information and receipts ready, as well as information about any food that was spoiled due to electrical outages. The key thing to remember is the limits on such coverage: Some policies contain a limit on how many days they will cover for hotel or apartment rental, and most have a limit on the dollar amount for food spoilage.
To make the process go faster, have a list of reputable contractors who can make repairs. Some insurance companies will give approval to start the work right over the phone, so having the necessary contractor information beforehand speeds up the process.
Keep in mind is that insurance companies usually start with the most severe cases first, so patience is the key. If you have to wait to file your claim, double check to see if there is anything that needs to be added. Even if you're the first in line, it won't mean anything if you have to go back and collect the information you need.
All of the steps listed in this article may seem like things that can either wait, or are too time-consuming. Once a disaster strikes, however, you will be glad you took the time to prepare.
Tips to save money
There are some individuals who prey on victims of natural disasters. Awareness of some commons rip-offs can help keep these predators at bay.
When dealing with contractors:
- Do not rush to sign a contract for repairs. There may be contractors willing to do the work immediately, but getting the right price is more important. Your insurance settlement is limited and you need to ensure that you can make all of the needed repairs.
- Get estimates from several companies first. If an offer sounds too good to be true, it probably is. By comparing quotes from several companies you can pick the one with the best price and the best results.
- Research the contractors you use and make sure they are reputable. Check references and your local Better Business Bureau to see if there are any complaints about the contractor's past work.
- Do not pay a large deposit or down payment for repairs. Once they have your money, there is no way to ensure the job is completed.
- Be careful when hiring someone else to handle your claim, especially any adjuster who goes door-to-door after a disaster. These adjusters can take a significant portion of your overall settlement (some time up to 15%), leaving you too little money to complete repairs and replace items.
- Try to work with the insurance company yourself. Make sure to ask any and all questions you have, and have the company-provided adjuster explain anything that you don't understand. If it gets to be too much for you to handle, or if you feel lost, you can then hire a third party to assist in the process.
- When hiring a lawyer, make sure that they have experience dealing with insurance companies. Also, check their record of success and watch out for expensive fees-some lawyers will take up to 30% of your settlement as payment.
RSS Feed