After enduring the recent twenty-four hours of near hurricane winds, many home owners are making repairs to their homes. Many are reporting storm damage claims to their insurance companies. Anyone who has made an insurance claim to repair their home knows that it can be ordeal. But you can make the process easier if you know what to do.
When making an insurance claim, the Maryland Insurance Administration recommends that you contact your insurance agent or company immediately to report damage. Prepare a detailed inventory of all damaged or destroyed property, to provide to the adjuster and for your records. It is recommended that you take pictures or video of the damage for documentation and to help the insurance company’s investigation. If emergency repairs are required, keep all receipts. It’s important to only make necessary repairs, and to contact your insurance company before making permanent repairs. You can view the Maryland Insurance Commissioner’s video on “Filing a Weather-Related Claim” for additional information and tips about your homeowners insurance (youtu.be/XywD4mdU1q8).
Before you make a claim, check with your insurance company about your deductible, policy coverage, and how they will pay-out the claim. If total cost of the repair is approximately, or slightly more than, your deductible, making a claim may not be worth the trouble. Your homeowners policy may also limit repairs to only the damaged areas, resulting in mismatched roof or siding. If your mortgage company has to endorse the insurance check, contact the mortgage company to engage the process and expect a delay in reimbursement or contractor payment.
Making an insurance claim may also have consequences on your insurance premiums and future applications. Much like credit reports that help creditors make decisions about extending credit, there are reports that provide the same to insurers. These reports help underwrite insurance policies. The “CLUE” report is a history of your insurance claims for the last seven years. A CLUE report can exist for you personally, as well as your home. Although the CLUE report has taken the public spotlight over the last decade, the A-PLUS property loss report is also popular with insurers.
Much like checking your credit report annually, the Maryland Insurance Administration recommends that you annually review your CLUE and A-PLUS reports. The reports contain a detailed history of insurance claims for you and your property, as well as details about damage to your home. Knowing what is contained in the reports may help you understand how an insurance company views your and your home’s insurance risk. This can affect your insurance policy acceptance, limitations, and/or premiums. And like credit reports, you can dispute any errors on the CLUE and A-PLUS reports. The MIA website offers a list of contacts to help you obtain these reports (insurance.maryland.gov/Consumer/Pages/CreditandPropertyLossHistoryReports.aspx).
It’s not uncommon to hear from contractors after the storm (verify contractor license).
The MIA issued a consumer advisory regarding what contractors can and cannot do:
What contractors can do:
-Prepare an estimate of the loss.
-Discuss the estimate with their customer.
-Answer questions the insurance company has about the estimates.
What contractors cannot do, unless they are licensed as a public adjuster by the Maryland Insurance Administration:
-Investigate, appraise, evaluate, give advice or assist their customer in adjusting a claim.
-Prepare the insurance claim for their customer.
-Negotiate the claim with the insurance company on their customer’s behalf.
-Advise their customer on the insurance policy’s coverage.
-Advertise or provide written materials that they can negotiate or investigate a claim on their customer’s behalf.
If the hassle of filing a claim is too much for you, you might consider hiring a Public Adjuster. The MIA describes the Public Adjuster as, “…an insurance claim adjuster who, for compensation, acts as an advocate for the policyholder in appraising and negotiating a first party property insurance claim under a property and casualty policy that insures the policyholder’s real or personal property…” The Public Adjuster must be licensed by the MIA and enter into a contract with the policy holder, as well as provide disclosures. Although a convenience, your insurance company is not obligated to accept the Public Adjuster’s claim.
The MIA states that a Public Adjuster must:
-be licensed by the Maryland Insurance Administration;
-prior to entering a contract with the policyholder, provide the policyholder with an explanation of the types of adjusters involved in the claims process and the insured’s rights to communicate directly with the insurer or its agents about settlement of the claims process and obtain the policyholder’s signature on the form;
-keep financial and business records and establish a separate escrow account for the policyholder’s proceeds.
-provide the policyholder with a written contract disclosing:
- the terms of the contract;
- the right to rescind or cancel the contract within 3 business days of signing;
- that out-of-pocket expenses incurred by the Public Adjuster and approved by the insured will be reimbursed out of the insurance proceeds;
- any compensation the Public Adjuster is to receive for services; and
- the disclosure of any direct or indirect financial interest that the Public Adjuster or any immediate family member has with any other party who is involved in any aspect of the claim, including but not limited to the ownership of, or any compensation expected to be received from, any construction firm, salvage firm, building appraisal firm, motor vehicle repair shop, or any other firm that provides estimates for work or performs any work in conjunction with damages caused by the insured loss on which the public adjuster is engaged; and
- the insured’s rights under the Maryland Consumer Protection Act.
By Dan Krell
Copyright © 2018
Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.