How to File an Insurance Claim

Having insurance protects you financially if your home, vehicle or property are damaged or destroyed. This holds true for just about any kind of insurance policy you have, from automobile coverage to life insurance. 

Let’s say you’re in a car wreck. Without insurance, you’re responsible for the repair or replacement — paid out of your pocket. Similarly, if a weather disaster strikes and damages your home the repairs could cost you thousands of dollars if you don’t have coverage.

With insurance, however, financial relief could be as close as filing a claim.

We hope you’ll never have to file an insurance claim, because it means something bad has happened. If you ever do need to file a claim, though, it helps to know and understand the process. Here’s what you need to know.

Call Your Agent

Before calling the main claims line to report a claim, talk to your agent. Your agent is your advocate and can walk you through what the claims department needs to ensure everything is handled as smoothly as possible.

Having your agent’s assistance before and during the claims process will help you to navigate a claim with ease — which should help you to avoid delays.

What Does a Claims Adjuster Do?

After you talk to your agent, a claims adjuster will contact you, usually within 24 to 48 hours. However, if the damage is over a widespread area, such as in the case of a hurricane, lots of insurers will be working with many people — and this might affect how quickly a claims adjuster can get back to you. 

The adjuster will want to set up a time to inspect your home, inside and out. If you were part of a mandatory evacuation and aren’t in town for the inspection, you might need to authorize someone to provide access to your home on your behalf. If you have family nearby who did not evacuate or a neighbor you trust, consider asking them to be present for the inspection.

Your adjuster will inspect damage to the home and will take pictures. Sometimes, the adjuster will cut a check on the spot.

When you have a large claim, different coverages are often “stacked” together. Let’s say that a hurricane hit your house, damaging it, a detached garage and your car. In this instance there are multiple claims that impact your auto policy, your “other structures” coverage, and the dwelling coverage on your homeowners policy and probably your personal property, too. With so many policies triggered, there will be different deductibles and repairs to sort through.

State laws govern insurance regulations. Many of these laws require insurers to award fair and consistent claims across the board to protect homeowners. Ultimately, what this means for homeowners is that widespread damage claims will take some time to process.

How Are Repairs Handled?

The short answer is that the repair process will depend on the claim. For an auto claim, you may be required to have your vehicle fixed at a repair shop that is approved by your insurance company. 

For homes with damage that is less than catastrophic — such as missing siding or a tree branch that collapsed a garage, but you can still safely stay within the home — you might receive a check directly from your insurance company to pay for the repairs.

If the damage is more extensive, your lender might be part of the repair and restoration process. Your agent will help you to understand how to handle the damage you’ve experienced.

Where Do I Live While My Home Repairs Are Being Completed?

Many homeowners insurance policies contain what is known as a “loss-of-use” provision. This means that if your home is severely damaged — to the extent that you cannot live there while repairs are made — your insurance policy will reimburse you for living expenses. 

This means that if you need to stay in a hotel for a few weeks while the damage is cleaned up after a fire, it won’t be an out-of-pocket cost for you. Other living expenses, such as meals, might also be partially covered for costs over and above your typical grocery budget.

Your insurance company will likely have some limits on what is covered, so don’t expect to check into the Ritz for the duration of repair work! You will, however, have a place to stay without it wrecking your finances.

Remember: Even though your home has been extensively damaged, you are still responsible for making mortgage payments on your loan. Your payment obligation to cover your mortgage does not go away, even if your house is unsafe to live in.

Talk to your agent about what your policy will cover as far as loss-of-use expenses and under what conditions your policy might consider your home a total loss. Some policies pay off the mortgage while you are living elsewhere and waiting for the home to be rebuilt.

Should I Allow My Insurance Company to Pay My Contractor Directly?

Be very careful about signing anything regarding the payment process, especially if you have a complex claim. Severe weather events can lead to extreme claims with many components.

Some insurance companies prefer to pay a contractor directly for repairs. If this is the case, your insurance agent will inform you and walk you through the process. However, if your insurance company is paying you, and your contractor asks you to sign paperwork that changes that arrangement, read everything carefully, and make sure you understand what the agreement says.

In some situations, homeowners have realized after signing these contracts that they have essentially designated the contractor as the recipient of the entire claim amount. Talk to your insurance agent if you have any questions about repair payments.

How Does My Deductible Fit Into the Claims Process?

Your insurance deductible is the amount that you are responsible for paying on any given claim. It’s important that you know what this dollar amount is on each and every insurance policy you have — from your vehicle to your property coverage.

For example, your homeowners insurance policy might even have different deductibles for different weather events. Let’s say your home is struck by lightning, which causes a small fire and zaps all of your electronics. In that case, your standard homeowners policy deductible will likely be applied. This is often a fixed dollar amount. You will receive payment for the cost of cleaning up after the fire and reimbursement to cover your damaged property, with the portion you are responsible for deducted from the total.

Contrast that with a hurricane deductible. If you live in a coastal state, your homeowners insurance policy most likely carries separate hurricane coverage with a hurricane deductible. A hurricane deductible is generally depicted as a percentage of your home’s insured value. Common amounts are 2% and 5%, but you should review your own policy to confirm. 

If your home’s insured value is $300,000 and your hurricane deductible is 2%, the dollar amount of the deductible you are responsible for following hurricane damage is $6,000. If the hurricane deductible is 5%, your out-of-pocket responsibility is $15,000. Earthquake insurance deductibles could be even higher, ranging anywhere from 10 to 20% of the coverage limit. 

Now you can see why knowing what your deductible is for each policy and each type of covered event is so important. For big claims, you will likely have some time before you need to think about the deductible. In some repair situations, it might be part of your final bill.

Will I Get a Check?

There are many variables that determine how a claim is paid and to whom. If you have a mortgage on your home, your claims check might be made out to both you and your lender. Because a mortgage lender has a significant financial interest in your home, lenders are often listed on your homeowners insurance policy for claims payments concerning the structure of the building.

In some situations, the claims money may be placed in an escrow account by your mortgage lender. Payments to contractors will come out of this account during the repair period, and your lender might also require an inspection of the completed work before releasing the final payment.

How Do I Claim Damaged Personal Property?

Personal property is all of the stuff you own that isn’t a part of the physical structure of your house: Everything from your clothing and shoes to your electronics and kitchenware. Homeowners frequently undervalue their belongings, but replacing it all can add up quickly.

If your claim relates to a robbery of stolen personal property, a claim check will likely come directly to you. Check your policy to see what your coverage is, either actual replacement value or cash value — that will govern how much you will receive to replace each stolen item.

If your property was destroyed in a weather event, talk to your agent about any guidelines you may need to follow, such as replacing items within a specific time frame in order to be fully reimbursed. If your coverage is for actual replacement cost, you may receive a check for the current cash value — and then you may need to submit receipts to be reimbursed up to the full amount.  

If you have a smartphone, here’s a tip that will help protect you in the event of a future disaster: Take video of each room in your home, slowly panning around to record what you have. Don’t forget to open closets, cupboards and drawers. Back that video up to the cloud and save it to a portable drive to keep with important records you’d bring with you if you had to evacuate. 

This digital record is easier than trying to develop a personal home inventory list of all of your property. Having this visual record will make filing a claim for personal property much easier, because you’ll be able to show what items were stolen or damaged — and what needs to be replaced.

The Bottom Line

Filing a claim happens during a chaotic and stressful time. Your agent is your advocate during this difficult situation, so stay in touch with them throughout the process. Having help navigating the claims process is invaluable, and it could save you time and frustration.

Disclaimer: 

All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. Rate Insurance does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by Rate Insurance. Rate Insurance does not assume any liability for the information contained herein, be it direct, indirect, consequential, special, or exemplary, or other damages whatsoever and howsoever caused, arising out of or in connection with the use of this publication or in reliance on the information, including any personal or pecuniary loss, whether the action is in contract, tort (including negligence) or other tortious action.