An insurance claim is made when you have suffered a loss or sustained some damage to an object or property that is covered by your insurance. It will compensate you for any money you have had to spend in putting things right.
Common Insurance Terms
Many terms are used by insurance companies that may seem confusing, especially if this is the first time that you have had to make an insurance claim.
If you read your insurance documents, then you will probably find that there is a glossary that explains all of these terms. Your insurance document is also the best place to look to find out what your deductibles are and the amount that they are worth. You should also be able to find out whether these deductibles apply to your claim as there may be occasions where they are waived.
When you have a better idea of how an insurance company deals with your claim, it can make you feel more confident when dealing with the company. You may also feel more empowered to make sure that you get the payout that you deserve from your insurance company.
Claiming On Home And Contents Insurance
The actual process will be different for every claim, but some things will happen in the majority of cases. If you need repairs to your property, then you will need to get estimates for these repairs, and you are probably going to have to meet with a loss adjuster. These steps can seem confusing but doing some research into what you can expect can make you feel more in control.
One of the most important things to look out for is if there is any miscommunication between you and the insurance company. You should always check any documents that you receive thoroughly for any mistakes and notify the insurance company immediately if you spot a mistake.
When your claim has been dealt with you will be informed of the amount that the insurance company will pay you and how this will be paid. The amount of money that you will receive will largely depend on the cover that you chose when you first took your policy out and so it is worth checking if there is a maximum amount that will be paid.
When you take your home insurance out, you will be given a choice about how you want the value of the claim to be decided. This can have a significant impact on the amount of money that you will receive when you claim but also affects the cost of the premiums. Generally speaking, there are usually two options that are available to you.
Actual Cash Value Settlements
If you have chosen a cash value settlement, then it is almost certain that you will get back much less than you paid for the item. This happens because you will only get paid for what the item is worth now and items for the home can depreciate very quickly.
If your building is insured for an actual cash settlement, then you may face some problems if you do not get back the full amount that it would cost to make repairs or even rebuild in the worst case scenario.
Replacement Cost Settlements
Replacement cost settlements can provide you with an amount that is more likely to cover your expenses. As long as the coverage that you have with your insurance is enough to cover the cost of the damages, then you should receive enough money to put everything back to the way it was before the incident occurred. You will probably pay higher premiums for this type of cover, but it is often worth paying more for the extra cover that you do get.
In most cases, replacement cost settlements will be the best option, but there are some downsides that you will need to be aware of. The company may only pay you half of the money that you need to purchase the item and then pay you the rest when you can produce a receipt. Even though you will get the money back, this does mean that you will have to pay out some of your money initially. The insurance company may also only give you the option of making a purchase at certain outlets with whom they have an agreement. This is not the case with every company though, and so it is worth checking this out before you take a policy out.
What If You Are Underinsured?
If you are underinsured, then you may find yourself having to meet a lot of the costs yourself, and this can cause real financial difficulty. You should check the amount of your cover on a regular basis and consider increasing your premiums to get a higher cover amount if necessary.
Preparing And Filing A Claim
When it is time to prepare and file your claim, it is important that you have all the relevant information that you will need to hand. This can save time later down the line as if the insurance company has to contact you for more information then this can delay your claim being paid.
Filing If You Have To Evacuate
You may not want to think about what would happen if your home became unhabitable and you needed to evacuate. However, there is always the chance that this could happen and so you need to think about what you would do in this situation, including how you would file your insurance claim.
Hiring A Contractor For Your Claim
When you are hiring a contractor for your claim, you will need to do your research to find a company that is fair and reliable. Unfortunately, some companies think that they can make some extra money because it will be an insurance company that is paying their bill. If you contact your insurance company, then they may have a list of approved contractors that work in your area.