Insurance was designed to move the risk of loss from the owner of property to a pool of owners that could sustain and support one another during a time of catastrophic loss. Historically, it began as a means for people to pool money together in the rare instance that one in the group would experience a loss they could not themselves cover.
Today, insurance is a multi-billion dollar industry that has become both necessary and often disliked by the consumer. Still, when a loss occurs, we have to turn to our investments in our insurance policies to attempt to make us “whole” again.
If you are or have experienced a catastrophic event such as hurricane, rain, wind, tornado, or fire damage chances are you need to submit a claim for both real and personal property. This task is daunting at best. It also comes at a time when you may be experiencing both physical and emotional trauma that can limit or greatly diminish your capacity to do and provide all the necessary information needed by your insurance provider so you can be appropriately compensated.
This is a shortened version of the before and after of a catastrophic event time line you may find helpful.
Before the event:
If you are fortunate enough to have some evacuation time, there are a few things you can do to make the insurance claims process easier on yourself and your agent/adjuster.
• Take pictures of each room in your house, with close ups of above average value items such as heirloom items, antique furniture, upper scale brand names and specific brand named items that are not common across the country. Make sure you take pictures in each room from each direction (four corners) to insure that any and all items might be seen and later remembered. The biggest mistake a homeowner makes is doing an inventory that only has the larger furniture items and they find themselves receiving a pay out that doesn’t come close to the maximum of their policy or near what their actual loss is. These pictures are great prompts in a time when you won’t remember what you owned, but only that everyone got out safe and okay.
• Store these pictures in one of the many “cloud” venues; icloud, dropbox, one drive, etc. Its no longer necessary to print out pictures and store them in a safe deposit box as we did “back in the day” though if you have, that’s great as long as your bank hasn’t also experienced the same event. (We found during Hurricane Harvey, a large commercial bank that many would have used as their safe deposit box location flooded and has no intention of rebuilding in that same location. This is a location that has been there over 25 years but is no more. You can see the disadvantage of the old school safe deposit box.)
• Evacuate with the irreplaceable: photo albums, scrapbooks, boxes of photos, all deeds, titles, stock certificates, legal documents including wills, trusts, identification, heirloom linens and original artwork. Diplomas, framed diplomas, licenses, professional license documentation, and any briefcases.
• Evacuate with all essential living items: a go bag for each family member including 5-7 days of clothing (tops, bottoms, underclothing, shoes, boots), hygiene items such as toothbrush, toothpaste, shampoo, soap, blow dryer and hair brush. All medications; RX and regular OTC meds that you might need. This expense can add up fast and take up a large percentage of what FEMA might distribute per household.
• Your pet in a carrier with leash and bowls/food/meds that they may need. DO NOT LEAVE THEM BEHIND to fend for themselves until you can return. This is becoming a huge problem and thus in many states has become a criminal offense.
• Any textbooks, school work and homework your children may need. You might be surprised how quickly schools reopen for regular hours and having these with you will insure your children’s routine returns to some form of normalcy. If you see then fall behind in school it will not only stress them further but also add to your stress. Grab their backpacks.
• Grab at least one cell phone with both car and wall charger. If you have time, grab at least one lap top. Don’t mess with any desk top computers but if you have time (2-3 days to prep) back your desktop data to the cloud as well. If all family members have cell phones, chances are this is the first thing grabbed, but if you are in a hurry (an hour or less as was the case for many in Hurricane Harvey) you just might be surprised what you won’t even think about.
You didn’t have time to evacuate a car load with family but only what’s on your back:
• First, take stock in the fact that you made the right decision to leave and protect your family. You are out, safe and hopefully hearing regular updates about shelters. Make 211 your go-to resource in the beginning if you can get through. Many cities have experienced such a flux of calls that 211 became a no-go.
• Second, don’t worry about your faith, religion or philosophy, your neighborhood churches, synagogues, etc. are some of the best sources of supplies, shelter and help. Use them. Don’t worry that you will be grilled over your affiliation or belief system. They are not open and helping to convert anyone, they are simply there to help. Go to them, any and all that are answering their phones. Many have now set up hotlines to get an assist number for help after the storm/event such as clean up, mucking and tear down crews. They also are great about loading up on infant and child items, hygiene and water/snacks. They can and do often provide shelter, taking in people who can’t get to the Red Cross shelters that are usually in a central city location, many people may not be able to get to them. Use your resources in your own back yard.
• Try to grab your cell phones, chargers, purses and wallets.
• Get out and get safe.
• Reach out, ask for help.
Now it’s time to start to recover:
Its time for that dirty word: Insurance.
Hopefully you have homeowners, flood or renters insurance. It is the one place where recovery is going to seem the most likely. But it can be a huge hassle, especially if you’ve never had a large claim.
Here’s some things to expect:
Your agent will be of minimal help. They can start the claim for you but you will then be paired with either a company adjuster, independent adjuster or in the case of a large catastrophic claim in an area that has been designated a disaster area, a FEMA adjuster. In some cases you may work with all three types of adjusters.
Special Note: In times of major disasters, many people may walk through heavily effected areas claiming to be with FEMA or other government agencies, insurance companies and contractors (more about contractors later.) Ask for identification! Take pictures of their driver’s license, their adjuster license or official government badges and ID. Well trained professionals will understand your need to verify their identity. A simple business card will not do.
You will be dealing with the adjusters assigned to you under several possible policies; homeowners, flood, renters or tenant, homeowner/tenant endorsements and auto policies.
• If you don’t have your policies, this is the place your agent will be of the most help. Get the DEC page (that’s what they’ll call it) of each policy. It will give you the limits of each type of coverage.
• Start taking pictures of your loss as soon as it is safe to return to your home or find your auto. WHEN IT IS SAFE.
Take those pictures BEFORE you start any removal or demolition. Then take them throughout the demolition process, and the stacks of possessions and demo materials you’ve hauled to the curb. A recommendation is to daily upload those phone/camera photos to a back up source or directly to the cloud account you are using. Just in case. Things happen and the time to find out the photos were lost is not after the demo is hauled away but rather at the end of the night when you can probably take more the next day. Photos are priceless in an insurance claim. When you list items, seeing open kitchen cabinets with mud soaked plastic containers and boxes of wet Ziploc bags help the adjuster get a clear picture of the degree of loss.
• Open cabinets and drawers in the kitchen, baths, dressers and desks.
• Open storage cabinets in the garage, closets throughout the house and built ins.
• Strip the bed and take pictures of the mattresses.
• Find the best/darkest water lines on the walls to show the height the water reached.
• Open any freezers and refrigerators to show contents if they are still upright. If they are leaning or downed, just a picture of the displaced appliance is enough to show total loss.
• Don’t forget the pantry and spice cabinets.
• Medicine cabinets. Vanity drawers. We have hundreds of dollars of miscellaneous items that are lost in a flood, wind or tornado event. A few pictures of these areas show the adjuster you have lost more than a couch and chair set but all the things that we buy to live our normal daily lives.
I’LL SAY IT AGAIN, BEFORE YOU START ANY REMOVAL OR DEMOLITION. Many insurance companies are good about accepting loss claims with minimal pictures that are not clear what the loss contains but showing the full extent of the loss as early into the loss is the best defense in getting the maximum reimbursement you are due.
• Find out the process and form YOUR insurance company uses or find an Insurance Inventory Specialist who can walk you through the process. Often the first claim made and the focus of your loss is your home; get it remediated fast and start the rebuild. Personal property is often put on the back burner and many homeowners don’t watch the deadline for claims filing and miss out on their second largest insurance loss pay out. Check with your insurance company but this date is often a year from the first date of loss (ie. A year from the date water entered your home or the date the hurricane hit landfall. Each company may use a different determining “first date” timeline, so check early on.)
• After dark there is little you can do to rebuild your home. Use this time to go to your pre-event drop box photos and use an inventory prompt sheet to remind you of every thing you owned. Make checks by the items you had or can see in the pictures. Make notes on ages of items and brands if you remember. Look at the pictures you’ve been snapping on the phone during the clean out. Start your inventory sheets now.
• Ask your agent if you can use a simple WORD form, PDF you create or are provided by your Insurance Inventory Specialist or an excel spreadsheet. Some insurance companies have online data entry software they want you to use. Farmer’s Insurance is one that DOES use an online inventory tool and they will NOT accept a spreadsheet or PDF list you create. State Farm accepted an excel spreadsheet with image notations and a link to your dropbox file you share with your adjuster. Remember, the adjuster is the one who will determine what and how much of a loss you experienced so give them access to as much information as you can. But make sure you find out and use the form they will accept.
• Expect that the inventory can take some time to create so start immediately. With help, you can complete your personal property loss in 7-10 days and file your claim early on.
• Once your inventory is filed you can expect to get a “settlement statement” stating how much your insurance is going to pay on the inventory you provided. Look this over carefully and if necessary ask if you can amend or add to your inventory. Some companies allow you to make a claim on large furniture for one or two rooms and complete the inventory later. Others insist that the list/inventory is complete for the claim to be processed and will not allow ANY changes, additions or adjustments be made. This is essential if you feel you had a complete loss but your pay out is not the total of your personal property portion of your insurance.
• CAUTION: We mention several times about maximum payout on your policy. You are entitled to the maximum payout of your loss. You are not entitled to the maximum your policy states if you did not experience a loss of that amount. Do NOT try to get to that number with bogus items you did not own. This is insurance fraud and will cause you life changing problems you don’t need. Be honest and fair. Adjusters are trained to look for red flags for fraud. Just list what you know you owned, be fair and honest and things generally work out fine.
• IMPORTANT: In terms of maximum pay out of a total loss, just because you are adding things to your inventory list, do not stop when you reach the maximum. If you have loss that exceeds your maximum you still want to list them. The insurance company may use a depreciation formula to determine the value of your items and you could get caught short if you short change yourself.
For example: A family owned a large four bedroom, three bath home in an upper middle class neighborhood. They had a maximum personal property loss of $100,000 but as the list was created, they had an inventory in excess of $210,000. With the 22% depreciation they took on some larger items, had they not included the entire inventory, they might have received less than the $100,000. They clearly had a total first floor loss and even at the maximum pay out they would not find themselves completely made whole again. It is very important; be honest but be thorough.
• Before they pay out on this claim, they will expect signatures of the insurance policy holder and/or homeowner. Have all parties sign the form (usually requiring a notary) and over night it back to the address they provide.
• ASK FOR YOUR CLAIM TO BE EXPEDITED AND ANY PAYMENT EITHER DIRECT DEPOSITED OR ANY CHECK OVER NIGHTED BACK TO YOU.
These funds are designed to rebuy your furniture and start over. This is the one area that many, while working so hard with mortgage companies and general contractors and adjusters, forget to do. Make this a priority. Use the funds sparingly but use it for what you need. Things are things and if you need funds to live on for a while, if you file this claim early you will find the stress of rebuilding to be greatly reduced.
A personal property inventory and pay out is a great source of survival. I’ll repeat this because its so important, these funds are often forgotten or little effort is put into this portion of your claim but the average 3 bedroom, 2 bath home will experience a loss in excess of $100,000. The average policy for a home of this size maxes out at $100,000. This ISN’T free money. You’ve been paying your premiums for years and today you need it. But in the fury of rebuildling your home, this valuable asset is often forgotten.
This post deals with your personal property. Your insurance claim for your home structure itself is another matter and dealing with that process will be dealt with in another post. Attached is a prompt sheet for personal property claims. Use it. It will spark so many reminders and get you on track for a quick and often surprisingly easy process.
You are already overwhelmed. You have a lot ahead of you. Follow these few posts to help make this time a little less stressful. That’s our goal.
This information is provided by:
AJC Consulting – Leslie Culver, Houston, TX
(832) 985-2626 email: firstname.lastname@example.org