How to Make Your Insurance Claim
BY TERRY R. BAILEY
Insurance Claim Handbook for Homeowners
How to make an insurance claim and get your insurance company to pay
You’ve just experienced a disaster. It could be a fire, a flood, an earthquake or any other disaster. After you have secured your family’s safety, what do you? These ten steps are designed to guide you through the process of presenting your proof of claim to your insurance company.
- Call your agent and report your claim.
You are responsible for reporting your claim to your insurance carrier. You must call your agent and report the claim. If your agent advises you that he is not authorized to accept notice of the claim, then ask to whom you should report your claim. Your insurance policy should include language regarding to whom you should report your claim. Follow up your telephone call with an email repeating what was discussed so you will have a clean record of your call.
- Keep a written log/diary of all your communications with your insurance company.
You absolutely must keep a written record, whether electronic or paper, of every communication between you and your insurer, its representatives and its vendors.
The law requires insurance companies to maintain a file of all claim documents and communications. You will need your own record of how your claim was handled should you end up in a dispute with your insurer.
- Document your loss.
Take pictures or video of all the damage to your home and personal property, if you are able to do so. Prepare a detailed list of your damaged personal property. Add to your list as you recall additional items lost in the disaster. Provide copies of your photographs, video and inventory list to your claims adjuster as soon as possible.
- You must cooperate with insurer and allow them to inspect your damaged property.
Your insurance company has a legal right to inspect your damaged property. Before you discard any damaged property, you must allow your insurance company the opportunity to inspect it. During major disasters insurance companies may not inspect every piece of damage property, but you still must provide them the opportunity to do so. Confirm to your insurance company, in writing, if they tell you that they do not need to inspect certain property and document it in your log/diary.
- Always communicate with your insurer in writing.
Most of us communicate via email for any business-related transactions. Your claim is no different. Your insurer is a big wealthy company because it treats every claim like a business. When you do communicate by telephone or in person, always follow up with an email providing a brief summary or confirmation of what the insurer’s representative said to you and document it in your log/diary.
- Confirm that your insurer is meeting all deadlines required by law and is timely informing you of its progress in handling your claim.
California law provides deadlines for certain actions to be taken by your insurer in handling your claim. Your insurance company must accept or reject your claim within 40 calendar days of receipt of notice of the claim or provide you with a written explanation detailing what additional information they require to complete their investigation. (Cal. Code of Regulations section 2695.7(b).) The insurance company must update you every 30 days until it accepts or rejects your claim. (Cal. Code of Regulations section 2695.7(c)(1).)
- Never sign a release of your claim.
Do not ever sign a release of your claim. Indeed, insurance companies are forbidden by law from requiring you to sign a release in order to receive payment of the insurance benefits to which you are entitled.
- Know when to retain a professional to assist in the presentation of your claim.
Your claims adjuster is a professional who adjusts insurance property losses every day of the week. With very few exceptions, insurance claims adjusters have more experience identifying damage and estimating the cost to repair it than the homeowner. On larger claims you may need to hire your own general contractor and engineer to assist you. If you reach the point where your insurer is lowballing your claim and excessively delaying the adjustment, you may need to consult with an attorney who specializes in insurance bad faith. You may be forced to file a lawsuit against your insurance company to recover your rightful policy benefits.
- Verify the repair estimates provided by your insurance company.
Again, with very few exceptions, homeowners do not have the background to know whether the insurance company’s estimate provides sufficient funds to repair the damage to their homes and personal property. You are allowed to obtain your own estimate of the actual cost to repair the damage and present it to your insurance company. The law requires the insurance company to review and consider your estimate, too. The law also allows you to accept payment of the amount of the insurance company’s estimate and still seek additional funds based on the estimate which you submitted. Indeed, as soon as the insurance company presents you with its cost of repair that amount is deemed “undisputed” by the insurance company and they must pay that amount to you within 30 days. (Cal. Code of Regulations section 2695.7(h).)
- Know your deadline to file a lawsuit against your insurance company.
Most homeowner policies have a one-year statute of limitation for filing a lawsuit against the insurance company. The running of the statute is “tolled” during the time that the insurer is investigating the claim. Your insurance company must advise you, in writing, of the one-year statute of limitation when closing your claim. You should demand that your insurance company advise you, in writing, of the amount of time that you have remaining to file a lawsuit. If you are in doubt as to the amount of time you have left to file a lawsuit, you should immediately consult an insurance bad faith attorney to assist you.