When Should I File a Claim?

For the average American, property - homes and cars - is the most important and valuable asset. Everyone is motivated to protect those assets both for sentimental and financial purposes. In the event of a loss, most folks consider leaning on insurance coverage for support. But the mystery of reporting a loss often clouds the picture: Who do I talk to? Will my rates increase? Will my insurance drop me? Will they pay for this?

Let’s dispel some of the mystery so that you can feel informed about when to file a claim in the event of a loss. Since auto losses are more clear cut, and outside of our expertise, we put that to the side for now, but also encourage you to find some resources in the event of an auto loss. 

When it comes down to property claims, a loss event triggers questions in a few distinct areas:

• Who do I talk to?

• Will my insurance cover it?

• Will my insurance pay enough?

Who Do I Talk To? 

After experiencing a loss, you should consider finding an outside opinion to provide input on the loss scope, and whether there may be potential coverage. Calling your insurance agent or carrier right away seems intuitive, but remember that they also have an interest in your property, and cannot give an unbiased opinion on your loss. In some circumstances, you may accidentally ‘make a claim’ to your insurance by speaking to them, without knowing it. 

After consulting with an outside party, you can retain a representative, like a public adjuster, to file the claim on your behalf, or call your insurance company directly. Filing through an agent is possible, but it may slow the process down, and the agent will not be the person handling your claim. 

Will My Insurance Cover It?

Coverage is based on the terms of your insurance policy and the specific perils listed as covered. 

Your insurance policy will list both specific types of perils covered, as well as the type of damage covered. For most policies, Water, Fire, Wind and Hail are common perils covered. The type of damage covered is often defined as “sudden”, “direct”, “accidental”, and “physical”. Excluded damages are often conditions that form over a period of time, and defined as “deterioration” or “wear and tear” in insurance policies. If you are unsure about what your policy covers, sign up for a free policy review.

For example, siding that is blown off your home exterior during high storm winds would likely be covered under the peril “Wind” and the damage would be considered “sudden and accidental”. On the flip side, cracked or broken siding that is the result of lawn equipment going by would not fall under a covered peril, and would be considered ‘loss over time’ and therefore, not covered.

Will My Insurance Pay Enough? 

Once again, your specific insurance policy will dictate the bounds by which your insurance carrier will pay for your loss. 

Most policies are “Replacement Cost” policies. (Replacement Cost Value = RCV) This means the insurance carrier will pay the full cost to restore your loss. Oftentimes, the insurance estimate will detail an initial amount of compensation, referred to as “Actual Cash Value.” (ACV) This amount factors in depreciation and will be the initial compensation for your claim. Remaining funds, including depreciation, will be released after your property restoration is complete.

If your policy is an ACV policy, the insurance carrier will only make the base value payment, and not pay the value associated with depreciation.

How much they pay is determined by ‘adjusting’ your loss. The insurance carrier will assign an adjuster to estimate the cost to restore your loss. They will use local or regional pricing to create an estimate that reflects your loss location. The insurance carrier can miss some of the scope of your damage or undervalue the scope of damage they agree to. Make sure you are providing access for them to investigate, and document everything you can.

For example, the insurance company may agree that your ceiling has a leak, and that the effects of the leak are covered under the policy. They may pay for a patch of drywall - but this patch does not reflect the true cost to do the work, like laying ground cover, setting up scaffolding, and painting over the new patch - or even replacing additional drywall which may be necessary. 

Making a Claim with Your Insurance

Consider getting an outside expert involved in your claim, like a public adjuster, to help advise whether your loss might be covered and guide you through the claim process. They will ensure that coverage is allocated, and that the insurance company pays enough for you to truly restore your loss. Fill out a contact form here to get help on your property loss.