Winter 2018 Volume 14, Number 4 | |||||
What Happens if I have a Homeowners Claim?After a disaster, you want to get back to normal as soon as possible, and your insurance company wants that too! You may get multiple checks from your insurer as you make temporary repairs, permanent repairs and replace damaged belongings. Here's what you need to know about claims payments. The Initial Payment Isn't Final
In most instances, an adjuster will inspect the damage to your home and offer you a certain sum of money for repairs, based on the terms and limits of your homeowners policy. The first check you get from your insurance company is often an advance against the total settlement amount, not the final payment. You May Receive Multiple Checks
When both the structure of your home and your personal belongings are damaged, you generally receive two separate checks from your insurance company, one for each category of damage. If your home is uninhabitable, you'll also receive a check for the additional living expenses (ALE) you incur if you can't live in your home while it is being repaired. Your Insurance Company May Pay Your Contractor Directly
Some contractors may ask you to sign a "direction to pay" form that allows your insurance company to pay the firm directly. Read it carefully to be sure you don't assign your entire claim over to the contractor. When in doubt, call your agent before signing. Your ALE Check Should Be Made out to You
Your check for additional living expenses (ALE) has nothing to do with repairs to your home. So, make sure this check is made out to you alone and not your lender. The ALE check covers your expenses for hotels, car rental, meals out and other expenses you may incur while your home is being fixed. Your Personal Belongings Valuation will be Calculated on Cash Value
You'll have to submit a list of your damaged belongings to your insurance company (having a home inventory on hand will make this a lot easier). Even if you have a replacement value policy, the first check you receive from your insurer will be based on the cash value of the items, which is the depreciated amount based on the age of the item. Once you have determined the exact replacement cost and actually replaced your items, you will get the difference. If you decide not to replace an item, you will get only actual cash value (depreciated) amount for it. |
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