Filing and settling a home insurance claim can be a challenging process. If you are able to take some time to prepare for unexpected loss or damage to your house or the contents within them, the process could be less frustrating.
Below are some considerations to keep in mind before, during, and after making an insurance claim.
Pre-Insurance Claim
In assessing your insurance claim, your insurance company may ask for photographs, receipts, and other documentation as evidence of items claimed to be lost or damaged.
It would be prudent to proactively create a list of items you would want to make a claim for should an unfortunate situation occur. In your list, provide as much description as possible. For example, identify the model number and purchase price of cameras, electronics, and watches.
With high-value or important items, take photographs and/or obtain appraisals to provide further documentation. For jewellery such as diamonds, make note of the cut, colour, clarity and carat (4C’s).
Keep this list in a safe place outside of your home, such as in a safety deposit box.
Another reason insurers deny insurance claims is that the loss or damage is outside of your insurance coverage. Review your insurance coverage to see if it would cover the items in your list, and whether the insured amount is adequate. For example, a typical home policy covers “jewellery” up to a specified limit (e.g., $6000). If the worth of your valuables exceeds your basic coverage amount, you would be well advised to obtain a specific rider or increased coverage for such items.
A loophole that insurance companies will look for is whether there was actual occupancy of the insured premises. For example, in the case of a flood, if someone is not living on the premises, it could be considered a breach of the insurance policy and the insurer will not cover the loss.
Upon Loss or Damage
An insurance company may reduce the amount of your claim if you do not take remedial action. Where it is safe to do so, exercise caution to avoid further loss or damage. For example, if there is a flood, you would be well advised to engage a plumber to take emergency action to stop the water source; and remove items not yet affected by the flood to prevent further water damage.
Where and when it is safe to do so, take photos of the damage as a result of a flood, sewer backup, fire, criminal activity, or other situation.
Contact your insurance company as soon as you can to notify them of the loss or damage. They will provide direction based on the facts of the situation.
Making a Home Insurance Claim
Complete your insurance company’s proof of loss form carefully and submit it as soon as practically possible.
In assisting clients in completing the proof of loss form, I have noticed claimants put in arbitrary amounts for lost items. It is very important that the amounts claimed be accurate as possible. In this regard, it is recommended you retain receipts to support the amount being claimed.
Before repairing damaged items, obtain estimates. Be reasonable in which party you seek to effect repairs and the extent of the repairs to be made. An insurance company may challenge your claim amount such as where you authorize repairs that may be viewed as extensive or overboard.
When Insurer Denies Claim
Insurance companies may reduce or deny your insurance claim. Their decision does not mean you will not be able to recover any losses or damages. You should ask the insurer to explain the reasons for their decision. Do not accept their initial conclusion at face value. You still have an opportunity to negotiate with them.
If you do not agree with your insurer’s conclusions when they have discounted your claim or denied it outright, you could sue your insurer for denying your claim.
If you decide to sue, keep in mind the time limit you have to file your lawsuit. The general two-year limitation period may not apply. In other words, you may need to start your lawsuit sooner. For example, in the case of fire loss, you have one year to sue from the date of the loss or damage. In my experience, unless it is a straightforward case, it often takes more than a year to negotiate a resolution with your insurer. It would be prudent to speak with a lawyer to discuss starting a lawsuit before the time limit.
Handling a home insurance claim on your own may be daunting. For over 30 years, Douglas Strelshik has been helping homeowners with their insurance claims. He can assess whether an insurance company’s denial of coverage and amount of any settlement offers are reasonable. Contact Douglas at 647.348.5422 to discuss your specific case.
