Money Essentials

Home insurance claims: When to make them

Homeowners insurance is a product you buy, but hope never to need.


The company you've paid to protect you can become your adversary.

While it's the insurer's job to restore you financially, it's your job to prove your losses. And your perspective on what's fair compensation won't always jibe with your insurer's.

Know when to hire help.

The more information you can provide on your claim, the more likely you'll get your due. If you've taken the steps outlined in this lesson, you shouldn't need outside help in filing your claim. The insurer will send an adjuster to assess what was lost, stolen, or damaged, and offer a settlement to replace or rebuild. Independently, you should get three estimates from local contractors whose reputations you've researched.

But if you've faced a very big, traumatic loss and don't feel confident going it alone, consider hiring a public adjuster licensed by your state to walk you through the process.

Typically, they take between 5% and 15% of the settlement. Because the public adjuster works for you, he or she has no obligation to reduce costs for the insurer.

Twelve states -- Alabama, Alaska, Arkansas, Iowa, Kansas, Mississippi, Louisiana, North Dakota, South Dakota, Tennessee, Virginia, and Wisconsin -- don't have licensing laws that apply to public adjusters. But you can obtain the names of public adjusters in every state who have passed the voluntary certification process sponsored by the National Association of Public Insurance Adjusters.

Information is the best protection.

Whatever your claim, your best protection is to keep good records. Record your version of the event; take photos, if possible. Get the police report. Call your insurer as soon as you're able, and keep notes of all related conversations.

Track resulting medical, home-care, baby-sitting, or housekeeping bills, since some policies cover a portion of those costs. Keep track of living expenses if you're forced to live elsewhere temporarily.

Add this to your reading list.

Truth be told, you'll be most satisfied with your settlement if you know in advance what's covered. That means eyeballing your policy now. Pay particular attention to the exclusions section, which as the name implies, outlines what's not covered.

Why subject yourself to such torture? An insurer's definitions can make the difference between comfort and calamity. Check out the declarations page, which outlines the limits of your coverage. Coverage D of the homeowners policy, for instance, outlines how much an insurer will cover if you have to relocate temporarily. Does your insurer pay up to 10% of your home's insured value, or offer to pay "reasonable" expenses over 12 to 24 months?

Finally, update your policies regularly. Inform your insurer of improvements and additions to your home -- including redecoration -- of $5,000 or more. Top of page

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