10 Things You Should Know When Filing a Property Damage Insurance Claim
Massachusetts businesses pay 100’s of millions (if not billions) in insurance premiums each year. Of that amount, roughly 70% is paid back out to claims. If you want your claim to be part of that group, here are 10 key things you can do help when filing an insurance claim:
- Contact Your Insurance Company by Phone ASAP: All policies have deadlines by which you must file the actual estimate of damages and formal claim (typically 2yrs in Massachusetts), but Notice of the damages is different. Notice puts the insurance company on notice that some damage has occurred and it gives the insurer an opportunity to inspect, take photos, and investigate. Now, during this ‘notice’ you need not (and should not) give an opinion about how the damage occurred / what caused it. Everything you say will be recorded by the insurance claims handler and can be used to deny your claim. You are not a claims investigator, public adjuster or an attorney, so leave those ‘why’ issues to the professionals if the insurance company denies your claim.
- Keep RECORDS, RECORDS, RECORDS: Take tons (an enormous amount) of photos – there is no such thing as too many damage photos when it comes to insurance claims. Today many people take video which can provide a better sense of the damage. Even taking photos of the area around your property can be helpful in the long run to show just how bad the devasation was in your neighborhood. Gather all the documents you need (copy of your policy, declarations pages, get news clippings if it was a bad storm or tornado or earth quake, get a newspaper with weather information for the day the damage occurred. Also, make a list of all the items and stuff you lost or were destroyed. There are free software programs and apps out there to help with this. One of these apps is available here: https://knowyourstuff.org/ and you can find other options to keep records of your lost / destroyed stuff here: https://www.libertymutual.com/liberty-mutual-mobile/home-inventory-app
- Keep RECEIPTS, RECEIPTS, RECEIPTS: Any damage-related repairs you make or things you purchase to prevent further damage could be reimbursable under your policy. Keep those receipts—including receipts for hotel stays, building materials, food you replace or buy, laundry costs, anything you pay for that you would not have had to pay for but for the damage that occurred. You can use apps to scan receipts and keep track of expenses, but you should still keep the originals. One app called Expensity is available for Android https://play.google.com/store/apps/details?id=org.me.mobiexpensifyg&hl=en and Shoe Boxed Receipts is a good option for iphones https://itunes.apple.com/us/app/shoeboxed-receipt-tracker/id322143854?mt=8
- BE PROACTIVE & STAY INFORMED: You need to be your own advocate. Your insurance company will provide claim forms and instruct you on filling them out, but you may also be pre-certified for medical services like MRIs, disaster expenses, hotel stays, emergency funds, etc. that can avoid running into coverage issues later. For this reason, you should ALWAYS READ YOUR OWN POLICY. It’s practically written in another language, but it can still help you understand what may or may not be covered. And do NOT ignore ‘Endorsements’ – these change the language of the base policy and can provide coverage for something explicitly not covered under the language of the base policy. Also, often insurance adjusters do not understand your insurance policy or may not realize or grasp the impact of endorsements or other changes to the base policy which you may have paid a premium for. Denials of coverage often run into this issue and you should be diligent in making sure it has not happened to you – you paid for it, you should get the coverage
- PREVENT FURTHER DAMAGE: Just because a storm has destroyed half your house does not mean you can sit idly by while the next day’s rain destroys the other half or the rest of your belongings. Although this may seem like an extreme example, the point is that you must take reasonable steps to keep further damage from occurring. If you do not, the insurer may deny the claims you make for damages that occurred post-damage event.
- Inspect then Repair: Although you must prevent further damage, you should also not make any repairs to the property until an insurance investigator / appraiser has inspected it. Once you start making repairs you may destroy evidence of damage or evidence of the cause of the damage (such as if it were a fire). So you should only make those repairs that are necessary to prevent further damage. Doing anything more could cause problems with getting coverage.
- Beware of Over-Claiming: Filing too many small claims (or even one big one these days) will almost certainly cause your insurance company to raise your insurance premium or even refuse to renew your policy. If you’ve been denied property insurance, you can contact the the Massachusetts Property Insurance Underwriting Association (MPIUA) also known as the Massachusetts FAIR Plan (Fair Access to Insurance Requirements). The MPIUA “provides basic property insurance on eligible property for applicants who have been unable to gain insurance through the voluntary market. MPIUA offers policies under the Homeowners, Dwelling Fire and Commercial Property programs as approved by the Massachusetts Division of Insurance.” See http://www.mpiua.com for more info.
- Don’t COMMIT fraud: First, you want to avoid making fraudulent claims including adding items that were never lost or collaborating with contractors to over-charge the insurer. Unscrupulous contractors, public adjusters, and simple crooks can prey on disaster victims while they wait for their insurance payments. And insurance investigators go into these things with a less-than-healthy level of suspicion and are also good at their jobs—you will almost certainly get caught.
- Beware of Scam Artists: You should never pay upfront for services repairmen, especially those that approach you after a damaging event. You may put up a small downpayment, but try to limit it to materials to ‘get started’ and always check up on the contractor’s license. You can use sites like www.angieslist.com for customer reviews and http://license.reg.state.ma.us/public/licque.asp to check the status of a contractor’s license with the Commonwealth of Massachusetts. The Better Business Bureau is a good tool too, but it is not always reliable. See this great video from the Today Show on how to avoid getting scammed by unlicensed, uninsured contractors.
- File Sooner Rather Than Later: Almost all insurance companies have time limits on how long they will accept claims after the damage has occurred. In Massachusetts it is typically 2 years, but you should never EVER wait longer than reasonably necessary. What is ‘reasonable’ is extremely important and very difficult to define. But consider why you are waiting to file the claim–if you have a reason for waiting that makes sense to most people, then maybe it’s reasonable. Some policies will not pay until repairs have been completed, but that does not necessarily mean you should wait until the repairs are done (even if you can). One MAJOR reason to file before the 2 years is because in Massachusetts you can dispute the amount of value the insurance company places on your “loss”. For example, you may argue your repairs are $100K and the replacement value of your lost personal property is $20K, but insurer says it’s only $60K and $10K. That is a huge difference, and in Massachusetts you have 2 years to request what’s called a “Referee Tribunal”. This is a somewhat complicated process and not well known, but The Jacobs Law, LLC has experience with these circumstances and can assist you. Nevertheless, if you dispute the value of the loss, you must move quickly and contact a lawyer – and this is all the more reason to file your claim early so that if the insurance company responds with a low value you can dispute it before the deadline