Crisis Counseling
By Carolyn Bigda


UPDATE your homeowners policy. Check with local builders to be sure it can handle current building costs and codes; builders can usually give you a cost-per-square-foot estimate. And if you make improvements, you probably need to up your coverage.

BUY a replacement-cost policy rather than an actual-cash-value one. That way, you'll be compensated for what your things cost to replace rather than for their depreciated value.

CATALOGUE your stuff using a video recorder—and narrate as you go, never stinting on details. If you can find a serial number, read that off. Don't own a video camera? Take stills and make a list. Then store the record, your policy and other important documents in a water- and fireproof container or safe-deposit box.


CONTACT your insurance company as soon as you can. Even if your policy doesn't cover certain types of disasters, particular damages may still be covered. Can't find a policy number? Your name and address will do.

PROTECT your property from more damage. Conventional wisdom says you shouldn't touch anything until the adjuster shows up. Wrong—just take pictures first.

SAVE your receipts for all related expenses. Even incidental costs like gas and meals add up and are likely covered by the policy. Also, keep a record of all conversations with your insurance provider.

GET several bids in writing before picking a contractor when it's time to rebuild. And don't hand over the total amount until the job's been completed to your satisfaction.

STOP utility and phone services if your residence is uninhabitable, and contact creditors immediately if you think you'll have trouble paying bills.

TAKE advantage of available tax breaks. Insurance payouts for repairing or rebuilding a home are generally tax-free (though money for living expenses is not). Depending on your income, you may be able to deduct a portion of your unreimbursed losses as well. And if your home is in a federal disaster area, you can snare a quick refund by amending your previous year's return to reflect the loss. —CAROLYN BIGDA