How to protect yourself from a home insurance claim
By Jason D. Singer
For most people, their most valuable and important asset is their home. Our homes give us security, protection and a place to live. Most of our equity is in our home which is also our largest investment and expense. We have to ensure that it is fully protected in the event of a devastating loss. Here are some suggestions to protect yourself:
- Review your insurance needs with your insurance broker
When shopping for insurance a broker or agent should review your needs and likely attend at your property to get a full appreciation of what is to be insured. Not all coverages are the same and the lowest price is not always the best price. For example, a policy that only insures for actual cash value will only pay you the depreciated value of a loss as opposed to a policy that pays replacement cost which will cover the cost to replace (old for old vs. new for old). Jewelry and artwork may not be covered fully under most policies and an additional rider may need to be purchased. Tenants insurance costs very little but can be tremendously valuable. A broker can also help find the best rates for your unique situation.
- Document and inventory your home and contents
Most people have no idea exactly what they have in the houses. Who can remember when they bought an item or how much they paid for it? After a loss an insurer is going to request this information. There are many ways to inventory your possessions before a loss. Take photos or videos of your home and belongings with commentary. There are also many apps that can help in creating a photo library or inventory. Save invoices or receipts on the cloud or off site.
- Obtain a copy of the declarations pages and policy
Most people will just assume that they have proper insurance coverage. Very few people actually review their coverages or the fine print of an insurance policy. Ask for a copy of the declarations pages and the policy. You should be receiving one when you get your insurance. Pay attention to any errors and ask that they be corrected. Ask to review the policy with your insurance broker. If you are not sure or have questions, ask questions, as assuming you have coverage that you do not have can be a costly mistake.
- Notify your insurer if there is a change in your situation
Insurance coverage can be denied if there has been a “material change in risk” to the property. This means that there has been some significant change that the insurance company is not aware of. For example, if you set up rental unit, go on a lengthy vacation or significantly renovate your home, you should notify your insurance company or your broker. Send the information by email to document it. If you are unsure if a change is material, ask about it. Not all changes are important, but it can be difficult to know in advance which ones are important and which are not.
- Take active steps to protect your home
A home that is well maintained and protected is less likely to be subjected to a loss. Inspect and maintain the furnace, roof, and areas where water may enter the home to prevent losses. Have working smoke and carbon monoxide alarms and sprinklers. Install an alarm system. Install backwater valves and backup sump pumps. An emergency generator can also reduce the risk of loss. Clear ice and snow from your property and replace broken lights.
Should you be the victim of an insurance loss, it is important to document everything that happens. Take multiple photos, with time stamps of the loss (if safely possible) and the damage. Notify your insurance as quickly as possible. Take steps to limit the damage and protect your home. Document everything and obtain written estimates.
If you have questions or are unsure what do, contact Singer Katz. We have a great deal of expertise with property insurance claims.