How Do Home Insurance Claims Work?

Insurance claims aren’t a common occurrence for most households, but about 1 in 20 homes will have a claim this year. From acts of nature to unexpected mishaps, every home has risks. 

What to prepare beforehand

There are some steps you can take now to make a claim go smoother if you have an insured loss.

Make a record of the things you own. With the help of today’s tech, you can document your home’s decor and your personal belongings by taking a picture of the items in your home and uploading the photos to cloud storage. If you buy something valuable, saving a copy or photo of the receipt and sending it to your cloud storage account can be helpful if you have to make a claim.

Note your policy info. Make a note of your policy number and your agent or broker’s contact information as well. Again, cloud storage is the best solution because a fire or water claim might destroy paper records.

Review your deductibles. The deductible is the part of the claim paid by the policyholder. Review your deductibles and consider a plan for paying the deductible if needed. Some households build emergency savings accounts that can pay for this expense or other unexpected costs.

First steps

Get everyone to safety if needed. In some cases, such as an out-of-control fire, the most important thing is to get out.

Mitigate damage if possible. For other types of losses, like a burst pipe, take steps to mitigate the damage. Find the water shutoff to stop the flow to the leaking pipe.

Report the claim

If you need to place a claim, here’s a basic overview of the process.

Contact your insurer promptly: Some types of claims, such as water damage, can become more costly to repair as more time passes. As policyholders, it’s our responsibility to make the insurer aware of any claims as soon as possible.

Damage inspection: Your insurer may send an adjuster to survey the damage and document your losses. This is where your home inventory might come in handy.

Housing arrangements: If the claim requires you to leave your home while repairs are completed, your policy may provide coverage for additional living expenses, such as hotels or the extra cost of eating out. Save your receipts. 

Repairs or settlement: In most cases, your insurer will help with arrangements to repair your home or repair/replace damaged items. However, in some cases, your insurer may issue a payment to settle the claim instead. Some insurers use a two-step process in which you are issued a smaller payment to begin repairs and full payment when repairs are completed. Your insurer will deduct any deductibles that may apply based on how the damage was caused.