For the unfamiliar, the insurance claim process is quite confusing. Here, we bring a scenario involving a homeowner’s wish to have a claim processed along with the most common questions posed to the professionals. It is our hope that through the dissipation of these along with the answers, the topic will become clearer and the process will not be seen as daunting.
How would a leading insurance carrier handle a home claim in regard to payment?
A: We’re providing an example of some of the top companies here. In the event a claim is brought about home damage, the company would seek a repair estimate. Immediately upon receiving the estimate, the company would issue a payment check. In certain instances, where extra living expenses or temporary repair work is necessary for safety purposes, the insurance might even make advance payment of the emergency situation.
It is common to see the claimant’s mortgage company written on the payment check. Why is this so?
A: This practice is mandated by the government in regard to a large loss. The reason behind this is simple enough: due to the insurable interest that the mortgage company has in having the home repaired, payment is issued to them. In order for the insured to receive the funding, he or she must be in contact with the mortgage company.
The estimated cost of repairs were higher than the actual payment, why is this so?
A: In cases like this, the reasoning behind this follows the fact that the homeowner must first pay his or her out-of-pocket deductible before any payment from the insurance company is forthcoming. The deductible is then subtracted from the remaining balance of payment.
What are the variables that the insurance companies use to determine if a house needs repairs over rebuilding?
A: The insurance carrier first consults with a professional engineer or building specialist in regard to the risk factor involved in repair work over building safety. If there is a significant risk to the structure, the insurance company will decide to rebuild the home instead of repairing it.
In the event a home is deemed necessary for rebuilding, does it have to be rebuilt in precisely the same way as it was before incurring damages?
A: If the insured wishes to add any changes to the building, he or she can do so. The insurance company pays for the home to be restored and the policyholder pays for any additional costs for any upgrades.
In the event a home is deemed not inhabitable, what does the insurance company do for the insured homeowner?
A: If the damaged home is classified as uninhabitable, the insurance company will likely assist the homeowner’s family relocate to a comfortable hotel. Should the home repairs become drawn out, the insurance company will help move the family to temporary housing that has similar amenities to the pre-damaged home.
Will the policyholder be denied coverage for temporary living over time?
A: The policyholder can expect to be covered for temporary housing for the full duration of repair work on the damaged home. This applies even if the homeowner’s policy term has expired.
What does an insurance company do in regard to protecting the contents of a home during the duration it takes to repair a home?
A: Transportation, as well as storage costs are taken care of by the insurance company during the repair time frame.
These and any other questions regarding the homeowners claim process should be directed to an experienced independent agency.