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Frequently asked Questions 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
Q: I’ve reported my claim, now what
should I do?
A: 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.
Particularly in cases of fire and/or water damage, you should call a professional cleaning service just as quickly as possible. The services listed to the right provide 24 hour service. The quicker the cleanup can be started, the better the chances of saving your property and minimizing the damages. Make the call. These experts deal with insurance adjusters all the time so they do know the correct procedures to follow.
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
Q: Is there anything I can do to speed
the claims process?
A: 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.
Q:What if my home is so damaged that I
cannot stay in it?
A: 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.)
Q: What coverage is there for trees that
A: 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
Q: Power was out for 5 days and the food
in my refrigerator / freezer spoiled. Is it covered?
A: 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.
Q: When power finally came back on, a
power surge damaged some of my electrical equipment. Is this damage
A: 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.
Q:The adjuster was here last week and I
still have not gotten my check. How long is this going to take?
A: 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.
Q: I’ve just received my claim check and
it’s not enough.
A: 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.
Q: What’s the difference between actual
cash value and replacement cost coverage?
A: 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.
Q: Why is my mortgage company shown on
my claim check?
A: 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.
Q: I have a flood policy through NFIP.
What does it cover?
A: 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 usually only 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
• 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.
Q: I have a separate wind and hail
policy with South Carolina Wind and Hail Underwriting Association
(SCWHUA). What does it cover?
A: 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. The dwelling must have been built after 1950 and you must have flood insurance covering the dwelling. 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)
• Dune walks
Q: What is my storm deductible?
A: 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.
Q: What should I know about the Loss
Assessment coverage on my HO-6, Condominium Unit Owners Policy?
A: 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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