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Understanding the basics to home insurance
Buying a home is one of the biggest milestones you will make in your lifetime, and it is critical that you take the necessary steps to protect your investment. Home repairs and the replacement of lost or damaged items in your home can be financing draining, which is why it is imperative to invest in homeowners insurance to help cover the cost in the event that your home is damaged.
Finding a home insurance policy that works for your lifestyle and your home is a personal choice, and you have many options to choose from. Home insurance policies range from very basic coverage to more comprehensive plans, and give you the freedom to pay for as much or as little coverage that you desire. Different types of homes require different policies, for example if you own a condo you would need to look into different insurance options than if you owned a single family home.
In the event that your home or the systems inside of your home are damaged, you will need to look into your insurance plan to see if the cause of damage is covered in your policy. If it is, and you feel that filing a claim through your insurance is the best course of action towards repairing and replacing your damaged items, here are a few things you need to know before moving forward:
What Is A Claim?
When your home or the valuables that are covered under your plan are damaged or destroyed, it is time to file a claim. A claim is a formal request to allocate the funds you paid towards your insurance claim towards the repair or replacement of damaged items. To receive compensation for damages, you must follow a specific process to file a claim and issue payment.
The Home Insurance Claims Process
Filing a claim is a delicate and detailed process that needs to be done a specific way in order to be successful. It requires careful organization, effective communication with your insurer, and patience. For major damages, it could take 30 days or more for you to receive the funds necessary to complete the repairs. While there is not a lot you can do to speed up the process, having all the necessary documents before you file can cut down on waiting times and help move the process along.
Detail The Damage
The first thing you must do to file a claim against your home insurance is to identify all possible details of the damage. This means documenting when, where, and how the damage occurred, the extent of the damage, and any photo evidence you have to collaborate your claim. If you are reporting a theft, a police will file a report use as part of your documentation. The more information you have on hand, the easier the process will be.
Find Secondary Housing (if necessary)
If your home destroyed to the point where it is no longer livable, you will need to find secondary housing quickly. Speak with your insurance agent about what your plan covers regarding living expenses. Keep receipts of any purchases you make towards temporary living (hotel stays, vacation rentals, etc.) so that you can claim them as expenses.
The Total Loss Form
An insurance adjuster will be in touch with you to collect your documentation and survey the damages. They will compare the information you give them with your current policy to determine coverage for your damages. During this phase, you will have to fill out a total loss form that must be descriptive and accurate. If they find that you provided false information, you could lose coverage, and they may drop you from your policy. This is where you can attach proof of ownership (such as bills, receipts, and warranties) for the lost or damaged items.
Receive Quotes and Estimates For Repairs
After submitting your claim, your insurer will determine the best course of action for your damages based on your plan. They may decide to cover the cost of repairs or may decide that a replacement of the lost items is more cost effective. If a repair is the most appropriate step, your insurer may ask you to reach out and get quotes from a few different contractors. Once presented with these estimates, your insurer will inform you of which contractor to move forward on based on your coverage and policy limits.
Knowing When To Claim
While home insurance acts as a safety net when your home faces significant damages, it should not be your “go-to” for every small loss that comes with homeownership. We recommend to save your claims for significant issues, as every time you file it impacts your coverage. When you make more claims than average, your insurer could consider you “high-risk.” People who make frequent claims often end up paying for it in the long run, and some even lose coverage altogether. Here is how to know when NOT to make a claim:
- The cost of the damage is less than your deductible
- The damages are relatively minor
- You have filed a claim in the last 10-12 years
- The damages are a result of poor maintenance on your part
- Your policy does not cover the cause of the damages
Do your research to see if your policy covers the type of damage or loss that you are facing. Damages caused by floods often are not included in a basic homeowner insurance policy, and knowing this will prevent you from “wasting” your claim on an issue that is clearly not covered.
How To Make The Most Of Your Claim
If you have done the research and have decided that making a claim is the best course of action in rectifying your damages, there are a few things you should know before you officially start the claims process. You may have to make small, emergency repairs to minimize future damages before your claim has been approved. If possible, make these temporary repairs and keep the receipts so you can add them to your list of expenses.
Claim any food, clothing and personal items, and remember to include the cost of what it will take to restock your refrigerator and pantry if your food or storage spaces are compromised.
Many policies have specific funding allocated for damaged food. The more you know about what is covered and what is not, you are more prepared to file a claim. Things like understanding whether your home insurance premiums are paid towards cash value or replacement costs will help you stick to a budget and get a solid idea of what you will be paying out of pocket.
Sometimes, the response you get from your insurance company may not be one you agree with. You do have rights as a homeowner and policyholder, and you have the right to dispute your insurance company’s estimate if you deem it unfair. If there seems to be some misunderstanding about your policy and coverage, ask for an in-home visit. Most of the time your adjuster will be willing to hear your side of the story and review any documentation you have disputing their coverage. If they are not, you may need to take it up a level and file a complaint with your state department of insurance.
Vancouver’s Leading Real Estate Company: Jovi Realty
When it comes to the Vancouver real estate market, Jovi Realty is a leader in the industry. When you’re purchasing a home, our agents will give you more details about what’s the right home insurance for you. Our agents aren’t solely focused on getting you into your dream home, they’re also dedicated to making sure you have the protection you need down the road. If the home insurance process seems overwhelming, contact Jovi Realty today for answers to all of your real estate questions!