The following is taken from our
Agency's Catastrophe Guide that is used following a hurricane strike. The
information is made available here to all...
And remember that all
dwellings/buildings are eligible for federal flood insurance. Call an agent if
you are concerned about flooding.
"WHAT'S COVERED?"
14 Questions Clients Frequently Ask
Following A Disaster
Here are some suggested responses to consumers’ 14 most
frequently asked questions following a natural disaster. Keep in mind that these
are general responses; each situation is different, and seldom are two policies
identical.
1. I’ve reported my claim,
now what should I do?
Take all necessary steps – securing property, temporarily boarding windows and
roof, and drying carpets and personal property, for example – to prevent further
damage. If you don’t, and additional damage results, it may not be covered. Your
exact responsibilities are stated in your policy – page 9 of 18 of HO 00 03
(4/91) and page 13 of 22 of HO 00 03 (10/2000) – in the section titled Your
Duties After Loss.
If you have water in your house, you should remove the water and dry everything
as quickly as possible. Professional Water Removal services can be found in the
Yellow Pages under “Carpet and Rug Cleaners”.
Don’t begin any permanent repairs or dispose of any damaged property before an
adjuster sees the damage. In the case of perishable items (such as food) that
must be disposed of, first take photographs to substantiate your claim.
Otherwise, some damages may not be covered.
Be sure to keep all receipts for emergency repairs and for items that might
qualify for additional living expenses (water, ice, or lodging charges if your
home is uninhabitable, for example).
Expenses incurred due to an evacuation are not covered.
Please be patient.
2. Is there anything I can do to speed the
claims process?
An adjuster will contact you as soon as possible, but priority will be given to
the most severe losses. Larger claims likely will be settled in stages, not all
at once.
While waiting for the adjuster:
• Take pictures of the damaged property and gather any pictures showing the
property before the loss.
• Get repair estimates (preferably at least two), if possible, for the adjuster
to review.
• List all damaged personal property, including each item’s description, age,
original cost, place of purchase, and estimated replacement cost. Include any
receipts or canceled checks for these items.
3. What if my home is so damaged that I cannot
stay in it?
Most homeowners and dwelling forms provide coverage for additional living
expenses or loss of use (Coverage D in your policy.). Most policies will
reimburse you for “any necessary increase” over and above your normal living
costs (such as lodging, for example, since it is over and above your mortgage or
rent payment) if your home is “not fit to live in” as a result of a covered
peril and you must temporarily relocate. But most policies will reimburse you
for only those food expenses over and above what you would normally pay for
food. “Not fit to live in” does NOT include being without electrical power.
You must keep all receipts in order for the expenses to be considered a part of
the loss. The expenses must be in line with normal living expenses and must be a
necessary and direct result of the loss.
If you are prohibited from using your home by Civil Authority after the
disaster, the policy will pay your additional living expenses up to 2 weeks.
Page 3 of 18 of HO 00 03 (4/91) and page 5 of 22 of HO 00 03 (10/2000).
Most policies limit recovery under “additional living expenses” to 10 % percent
of the amount of coverage on the home itself. (Note: A Tapco H0 – 8 policy
provides only $1000 coverage for additional living expenses. Other policies,
like a DP-1, give the 10% coverage, but this payment reduces the Coverage A
limit. Safeco provides Loss of Use up to 12 months with no dollar limit.)
4. What coverage is there for trees that are
down?
Standard dwelling and homeowner policies don’t provide coverage for damage to
trees by wind.
(See page 4 of 18 of H0 00 03 (4/91). But if a tree falls and damages other
insured property, such as a house or a fence, the cost to remove the trees is
covered, usually up to $500 regardless of the number of fallen trees. See Debris
Removal section on page 4 of 18 of HO 00 03 (4/91)
The new 2000 edition of the homeowners policy provides $1,000 ($500 max per
tree). This new form also extends coverage to downed trees blocking driveways or
ramps used by handicapped persons. See page 5 of 22 of HO 00 03 (10/2000) and HO
00 03(10/2006)
Travelers , on policy form HV-3 (pg 6 of 27), eliminates the $500 limit per
tree, thus providing Tree Removal coverage for all downed trees. On Travelers
policies with the High Value Home Endorsement 57000 (11/2005), the $1000 limit
is removed (pg 2 of 9) and thus the policy provides Tree Removal coverage for
all trees with a $500 limit per tree.
The SCWHUA policy provides NO coverage for trees. The NFIP flood policy provides
NO coverage for trees
5. Power was out for 5 days and the food in my
refrigerator / freezer spoiled. Is it covered?
Most residential policies contain”power failure” exclusion and don’t cover food
spoilage that results from power outages. (See pages 8 of 18 and 9 of 18 of H0
00 03 (4/91) and pg 12 of 22 of HO 00 03 (10/2000). However, some companies
provide this coverage if you purchased the appropriate endorsement. Safeco
policies with option BD, Home Freezer Contents Coverage, and Capital Preferred
policies with HO-04 98 (Refrigerated Personal Property) provide $500. Travelers
policies with H0 3 (6/91) provide the food spoilage coverage up to $500 and
those with the High Value Home Endorsement provide $750. Travelers policies with
form HV-3 (10/2006) provide $5,000 coverage and those with for HO-3 (10/2006)
provide $500 coverage. Beazley Lloyds policy has $1,000 coverage.
6. When power finally came back on, a power
surge damaged some of my electrical equipment. Is this damage covered?
Most homeowner’s policies provide coverage under “sudden and accidental damage
from
artificially generated electrical current.” But coverage doesn’t apply to loss
of “tubes, transistors, electrical components or circuitry”, computer chips, and
similar items. Therefore, damage from a power surge would not be covered for
such property as televisions, VCR’s, computers, or similar items. It is best to
unplug such items before the power goes off (before you evacuate) or while the
power is off, then plug them back in after the power is restored.
7. The adjuster was here last week and I still
have not gotten my check. How long is this going to take?
Following the visit with you, the adjuster must complete very detailed paperwork
on the loss and submit it to the carrier for review. If the adjuster has a heavy
claim load, which is normal after a disaster, there is often a delay in
completing the paperwork (since adjusters generally do their paperwork in the
evenings, after the interviews and inspections). There’s also a delay at the
insurance company as it reviews the many claims coming in at once.
Be sure to obtain the adjuster’s telephone numbers and/or email address and also
the phone number/email address of your insurance company’s claim department so
you can check the status of your claim.
Ask your insurance agent to check with the adjuster to find out exactly when the
paperwork was submitted to the carrier. If the paperwork has been received, the
carrier may able to provide a status report as to when it will issue the claims
draft to you. (Note: Some companies may allow you to check your claim status on
their website. Your agent can help you with this.)
In communicating with your adjuster or agent, email is the most efficient
method.
8. I’ve just received my claim check and it’s
not enough.
If the check is for an amount lower than you expected, it’s usually because of
policy terms that require settlement on an actual cash basis, to be followed by
a separate payment for replacement costs when repairs or replacement are
completed. You will need to provide the adjuster with proof that repairs have
been made or copies of receipts for replacement of personal items. Remember also
that your policy deductible has been applied. Check with your agent or company.
9. What’s the difference between actual cash
value and replacement cost coverage?
If the policy indicates that the settlement will be on a replacement cost basis,
then payment will be made for the actual cost, at today’s prices, to repair or
replace, limited only by the amount of coverage that was purchased
If the adjustment basis is actual cash value, settlement will be made by
determining the replacement cost at today’s prices, less a reasonable amount for
depreciation, age, or obsolescence.
Some policies provide coverage for the home on an “extended replacement cost”
basis, in which case the carrier pays whatever it costs to repair or rebuild the
home, up to a certain per cent above the policy limits.
10. Why is my mortgage company shown on my
claim check?
Claim checks must be made payable to the named insured and to the mortgage
company, if there is one listed on the policy, in order to protect the interest
of all parties. Your contract with the mortgage company requires this be done.
You insurance policy does not address the issue.
We make 2 suggestions:
(1) Make sure the correct mortgagee is listed on your policy. Mortgages are
transferred and sold and mortgage companies are bought and merged and your
insurance agent may not have been notified.
(2) Contact your mortgage company prior to a disaster to make sure you
understand their procedure for handling a claim check.
11. I have a flood policy through NFIP. What
does it cover?
This policy covers only one peril: damage from flooding (including rising
waters, mudslides and certain damages from erosion). The surge or wall of water
associated with a hurricane is considered flooding. Not all flood policies cover
building and contents. And all flood policies carry a separate deductible for
building losses and loss of contents
The flood policy also provides $30,000 coverage for Increased Cost of
Construction. This coverage is helpful if building codes require your home to be
built differently when reconstructed. However this coverage applies if the home
has been previously flooded and a claim made.
Only one building may be insured under a flood policy. Thus any building on your
premises not attached to the dwelling is not insured. Exception, a detached
garage is covered but only if used for storing vehicles.
Types of property that are NOT covered under a flood policy:
• Property in the open
• Certain property in basements
• Trees, plants, shrubs
• Driveways
• Foundations
• Sidewalks
• Piers
• Docks
• Walkways, decks located outside the perimeter, exterior walls of the building.
For some types of property – jewelry, furs, silver, gold, fine arts, and similar
items – only a limited amount of coverage ($250, for example) is provided.
Coverage on items below the elevated floor is extremely limited.
Reimbursement for additional living expenses is not provided under a flood
policy.
Replacement coverage is provided under a flood policy for dwellings only if the
home is your primary residence and if it’s insured for at least 80 percent of
its replacement cost (or the maximum available under the NFIP program,
$250,000).
All other losses are adjusted on an actual cash value basis, including losses to
contents and to other items such as carpeting, antennas, awnings, appliances,
and miscellaneous outdoor equipment.
Unfortunately, many people discover only after a flood that they aren’t eligible
for replacement coverage on their home because they were underinsured. This is
frequently the case when homebuyers purchase only enough flood coverage at time
of closing to satisfy the mortgage lender and then don’t update this amount or
purchase additional coverage for their contents.
12. I have a separate wind and hail policy
with South Carolina Wind and Hail Underwriting Association (SCWHUA). What does
it cover?
This policy covers 2 perils: physical loss to property caused by wind and by
hail (pg 5 of 15). Not all SCWHUA policies cover building and contents and loss
of use and Increased Cost of Construction. And, all SCWHUA policies carry a
separate deductible for Building losses, losses to Contents, and Loss of Use
losses (page 11 of 15).
The property deductibles are 1 %, 2 %, 3%, 4%, 5% or 10% of the amount of
insurance. The loss of use deductible vary from 10 days to 55 days depending on
the building deductible (page 4 of 15).
Other Structures not listed on the policy are insured up to 10 % of coverage A.
This payment REDUCES the coverage A limit.
Replacement cost coverage on the dwelling is applicable if a premium has been
charged and the dwelling is the principle residence for the insured and the
dwelling is insured for at least 80% of its full replacement cost. Form WHP 10
is attached to the policy.
All other losses are adjusted on an actual cash basis.
Increased Cost of Construction (ICC) is available only for a dwelling and pays
for the increased cost to bring the home in compliance with newer construction
standards.
One caution – The SCWHUA policy does not provide for loss caused by “wind driven
rain”. The SCWHUA policy “will not pay for loss …to the interior of any
dwelling…caused by rain… whether driven by wind or not, unless the direct force
of wind…damages the dwelling…, causing an opening in a roof or wall and the
rain…enters through this opening.” And when the standard wind/hail exclusion
form is attached to the homeowners policy, the form excludes a “loss caused
directly or indirectly from windstorm or hail”. Thus the homeowners/dwelling
fire policy will NOT insure for wind driven rain (an indirect situation). This
type event usually only occurs when a strong (hurricane) wind is blowing the
rain almost perpendicular to the dwelling and the rain enters through openings
around windows, under doors, through vents, etc.
Types of property NOT covered include: (page 5 of 15)
• Pilings
• Boardwalks
• Dune walks
• Trees
• Fences
13. What is my storm deductible?
Different companies have different type deductibles that apply to the storm
loss. The deductible may be referred to by such terms as “wind & hail”
deductible, “hurricane” deductible, “tropical cyclone” deductible, or “named
storm” deductible. This distinction is important. For example, if Tropical Storm
Allison causes damage to the home, there would be a higher deductible if the
policy deductible is “wind & hail” or “ named storm” deductible. The All Other
Perils deductible would probably apply to policy with a “hurricane” deductible.
Read the endorsement stating the terms of your deductible carefully. For
example, a “hurricane” deductible may apply when a Hurricane Warning has been
posted for the area and yet the storm may never gain hurricane status.
These deductibles refer to a percent that is usually a percent of the amount of
insurance on the dwelling or building. Sometimes, the deductible applies only to
Coverage A. Sometimes, it applies to both building and contents. Obviously, it
is important to read the endorsement that is attached to the particular policy.
14. What should I know about the Loss
Assessment coverage on my HO-6, Condominium Unit Owners Policy?
The Loss Assessment coverage will pay your share of any loss assessment charged
against you by the condo regime or association as a result of a loss that is
caused by a peril covered by your HO-6 policy. Most companies provide automatic
$1,000 coverage. In many cases, you can increase the basic loss assessment limit
on your policy to a higher amount.
The important thing to note is that most insurance companies place a $1,000
limit on any assessment that results from a deductible in the insurance
purchased by the regime or association of property owners. This limit usually
cannot be increased. Thus, if your condo regime has purchased a property policy
with a high wind deductible, for example, and you are assessment $5,000 after a
hurricane loss as your share of the high deductible, your policy will only pay
$1,000.
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