How Does The Homeowners Insurance Claim Payment Process Work? Related Information:
When you have gone through all the appropriate channels of reporting any damage to your home due to a burglary or other reason, the insurance company will send an adjuster to appraise the damage. This person will write up a report and contact several contractors that do the repairs you need to obtain a quote of how much the repairs would cost. If you have lost any furniture, appliances or clothing, the cost of these items will also be added in. If you have replacement value, you will get the value of what you paid for them. If you don’t have replacement costs on the contents of your house, the adjuster will consult market value books regarding each piece and this is the cost that will be assigned to each of these items. If you have had to make other living arrangements or have incurred other costs, you need to have the receipts of these so that the insurance agent can add them to the final total and reimburse you for any out of pocket expenses.
When the final cost is determined, your insurance agent will contact you with an amount that the insurance company is willing to pay. The amount of your deductible will be subtracted from this total amount. Sometimes the company will give you a check as an advance on the final payment to help you with any difficulties you have while you are waiting to get everything settled. You may have to make a deposit on an apartment and buy new clothing and furniture. The first check is not the total amount – just something to tide you over. In the case of partial damages you may be offered an on the spot settlement and get the check for the total amount right away. Then if you discover other damages at a later date, you can reopen the claim and get paid for those. Of course an adjuster will have to come in to inspect these damages and do an assessment.
When both the structure of the dwelling and the contents have been damaged you should expect to receive two checks – one for the house and one for your personal effects. You will also receive a separate check for living expenses while you are unable to remain in your home. This makes a total of four possible checks you could receive for one claim. If you have a mortgage, the check you receive for the structural damage will be made out to both you and the lender. This is to ensure that you make the necessary payment to the lender because lenders require that their names be listed in any homeowner’s insurance policy. If the home is totally destroyed the money will go to paying off the mortgage and you will receive the remainder if it is greater than the amount you owe. If repairs are to be done, the lender will put the check in an escrow account any pay for the damages from this account.
If your home is totally destroyed, you also have the option to rebuild. You can rebuild in the same location of choose a different one. Instead of issuing you a check, the insurance company can pay the cost of having the home rebuilt. You are guaranteed the amount for rebuilding that is specified in your policy. Any costs over that amount will be your responsibility. The company will only pay to rebuild your home the way it was before it was destroyed.
It is important for you not to file frivolous claims against your homeowner’s policy. If the company sees that you are constantly filing claims, they have reason to cancel your policy, making it difficult for you to get a policy with another company. If you figure that the amount of damage is not up to the amount of the deductible on your policy, then it doesn’t make any sense to file a claim. Even if the company does not pay out any money, the record of the claim will still be in your file.