6 Things You Must Know About Your Insurance Claim
1) FIND A REPUTABLE CONTRACTOR YOU CAN TRUST
How do you find a reputable contractor you can trust? We highly recommend dealing with a local business and reading their online reviews. Perhaps the most important thing to consider is how well the contractor communicates? If they don’t communicate well with you while they’re trying to sell you a roof, imagine how difficult it might be if any problems arise. Are they professional? Are they on time for their appointment(s)? Do they have a corporate process to streamline your project? Do they offer pictures of your roof damage or simply tell you there is damage? Did they inspect your entire property? Do they have insurance in case someone gets hurt during the project? Also, it may seem simple but, do you like them? Keep in mind, you will work with this contractor for an extended period of time so it is important you like who you’re dealing with.
2) DO I NEED MULTIPLE ESTIMATES?
It is a very common misperception that policyholders need to solicit multiple bids or estimates for their restoration project. Chances are, either your insurance agent or your adjuster has advised you to solicit multiple bids from multiple contractors. If you invite 100 different contractors to estimate your project you will most likely receive 100 different amounts. Bottom line, the only estimate that truly matters is supplied by your insurance company. Your insurance company will inspect your property and will initially determine the scope of work necessary to return your property to pre-storm condition. The insurance company’s initial scope of work ultimately determines the price for the project through software called Xactimate. Xactimate is the industry standard pricing software that insurance carriers typically utilize to document damage and determine pricing for your restoration project. An experienced restoration contractor should be intimately familiar with this software.
It is absolutely imperative that you share your claim documents with your contractor so they can review the scope of work to determine if there are any missing items. If you and your contractor disagree with the insurance company’s first offer, a process known as supplementing will properly align the claim documents with the scope of work necessary to restore your property to pre-storm condition. If you do not share your claim documents with your contractor you are almost assuredly costing yourself additional scope of work the carrier is entitled to cover.
If you find a contractor to complete the work for less than your insurance company’s estimate then the insurance company will happily realign their estimate to match your lower price. The insurance company is always excited to save money!
3) PROPERTY INSPECTION
A reputable contractor will perform an inspection of your entire property and provide photos. Their inspection should obviously include the roof but they should also inspect your windows, window screens, siding, exterior doors, garage doors, HVAC units, gutters and downspouts, fence, pool equipment, grill, exterior lighting fixtures, and personal property such as chairs, umbrellas, etc. You are paying your insurance company for coverage on all of these items so you may as well reap the full benefit of your policy, after all, that’s why you pay them a premium every month.
4) HOW TO FILE A CLAIM
Have you ever filed a claim? If not, it can be intimidating not knowing what to expect. A professional contractor will properly prepare you with the necessary information and should even offer to help you on the call. When you file a claim, you must know the type of loss as well as the date of loss. These two variables will greatly affect the success of your claim, so you must discuss these items with your contractor to make sure you answer your carrier’s questions properly.
The type of loss you claim should align with the type of damage you have on your property. In other words, you don’t want to file a water loss because you have an interior leak. Chances are, you should file a hail or wind claim because that is the issue that caused the leak. If you mistakenly file a water claim, the carrier may decide to only repair your roof at the leak location as opposed to replacing your entire roof. Keep in mind, insurance companies make money by accepting premiums and minimizing losses.
The date of loss is just as important. Believe it or not, insurance companies have an active database for every catastrophic event that occurs on your property. If you don’t have the proper date of loss, the insurance company may very well deny your coverage. It may also limit the type of damage you’re eligible to claim. Bottom line, a professional restoration contractor will have the dates you need to use and should help you avoid any issues when filing your claim.
5) WHAT TO EXPECT AFTER YOU FILE A CLAIM
Shortly after you file your claim you will be contacted by an adjuster. The adjuster is a representative from your insurance company who will schedule a time with you to inspect your property to determine whether or not the damage justifies coverage. A reputable contractor will want to meet with your adjuster at the time of their inspection to discuss the damage and advocate for you.
Assuming the adjuster agrees with your contractor’s assessment, you will receive a set of claim documents which ultimately defines the scope of work. These documents are literally the bible for your entire claim and you should definitely share them with your contractor. Otherwise, your contractor will not be able to effectively advocate for you and it will cause a fracture in your experience.
Once your contractor receives the insurance company’s claim documents, they should compare their own inspection notes with the scope of work as defined by your insurance company. These estimates rarely match and a supplement is almost always necessary to properly align the differences between the two estimates. A reputable contractor will advocate for you to ensure your entire property is repaired to pre-storm condition. Your insurance company provides their initial estimate hoping you will work with an unsophisticated contractor who is willing to accept their initial proposal.
Keep in mind, insurance companies are designed to make money. They make their money by collecting premiums and minimizing losses. It is in your best interest to work with your contractor and collectively review their initial estimate to make sure all the necessary items have been properly documented in the claim documents.
6) HOW DOES THE MONEY WORK?
This is perhaps the most confusing component of any insurance claim. There will be a minimum of two checks with every insurance claim, assuming the property owner has an RCV policy and plans to complete the repairs.
The first check you will receive is known as the ACV check. The Actual Cash Value (ACV) represents your compensation for the damaged items to your property in their current/damaged status. Essentially, the insurance company has compensated you for your loss and you are not required to do any repairs beyond this point. If you decide to repair your property you are eligible to receive the depreciation value.
The second check represents the depreciated value for each item that was included in your claim. At the time of your adjuster meeting, your adjuster assessed the amount of wear and tear to your property and quantified that as a percentage value of depreciation. In other words, an old roof will have more depreciation than a roof that is only a few years old. Most likely, the majority of the items included in your claim will have a depreciation value. The good news is that you are eligible to receive all the depreciation after you have completed your repairs. Requesting depreciation requires specific documentation from your contractor and may be subject to inspection before your insurance company will release the funds.
If you have a mortgage on your property, the insurance company will most likely include your lien holder’s name on your checks. There are many different mortgage companies in the market and each has their own process for disbursing money. Sometimes mortgage companies can cause significant delays. It is best to communicate with your lender so you and your contractor fully understand what their specific process requires.
If your contractor supplemented your claim there will be additional checks. Most likely there will only be one supplement check, assuming your insurance company and contractor easily agreed upon the amended scope of work necessary to complete your repairs. However, if your insurance company is not agreeable to your contractor’s supplement request(s) there may be multiple small checks which represent “small” victories won by your contractor to your benefit.
Collectively, the ACV check + the depreciation is referred to as the Reclaimed Cash Value (RCV). The supplement check(s) are included in the revised claim total and are therefore a component of the RCV total. Every time a supplement check is approved it will trigger a new set of claim documents since the scope of work has been amended.
It is important for you to understand that your deductible is not included in any of the insurance company’s checks. It is considered a component of the RCV of the claim but it is your responsibility to fund the deductible component. The amount of your deductible is determined by your policy and was established at the time you signed your policy documents.
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