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Sorting out your home insurance claim
5 Tips: Getting the most from insurance claims.
September 14, 2005: 11:17 AM EDT
By Gerri Willis, CNN/Money contributing columnist

NEW YORK (CNN/Money) - Insurance companies may have to pay up to $60 billion after Hurricane Katrina left thousands of people homeless. The question is how much will you have to pay?

Right now thousands of claims adjusters are beginning the task of determining how much money homeowners will owe. Hanging in the balance is how much people can rely on their homeowners insurance.

In today's 5 tips we'll tell you how you can get the most out of your insurance claim.

1. Understand the basics

A typical homeowners policy covers wind, fire and theft damage. Flood insurance is not included. In fact, 60 percent of people in affected areas did not have flood insurance.

Your homeowner's policy does cover you in the event of wind damage, wind-blown rain damage, fire and theft. It is up to you to prove that the damage that was sustained to your home was caused by wind and not flood waters.

Claims adjusters are going to have a hard time figuring out how to tell the difference between wind-driven water damage and true flooding. The outcome is significant, especially to insurance companies.

2. Assess wind versus water damage

If you're in an area that was hit by a hurricane, there's a good chance that rain and wind played a central role in flood damage. If rain entered your home through wind-damaged windows, you may be eligible for insurance.

Attorney Alan Garfinkel says you should look for torn shingles on your roof as an example of wind damage. Martin King, a damage repair contractor, says you should check for wet insulation in the attic to prove wind-blown rain and wind damage.

Check the seals around the windows. Look for loose window trims. Make sure there is no water leaking around the doors. Look for watermarks on the roof and watch for discoloration. "All of these signs make the case for wind damage," he says.

Joe Annotti of the Property Casualty Insurers Association of America says that it's clear your home has wind damage if you have holes in your roof or there are trees in your area that are down. However, the damage was most likely caused by flood if water comes from the bottom up. For example if you have a water rings around your walls similar to a ring around the bathtub, it's likely you've sustained flood damage.

Look at your house's foundation. If the bolts on the foundation are bent, it's likely wind that caused the damage. However, if the foundation has shifted at all, it's likely rising flood waters. Another sign of a flood is bulging walls near the ground. This indicates water pockets. And look for wet furniture from the bottom up.

Anotti says that often the insurer and the client will call in engineers to determine the exact cause of the damage. King recommends that people invest in a moisture meter that will indicate places that water may be sitting undetected. You can typically get a moisture meter for under $100 from your hardware store or

3. Sort and document

When disaster strikes, you'll want to be able to document your personal losses. Get an inventory checklist from your insurance company, or download one from the Insurance Information Institute at

This list will help you think about contents that may have been in your bedroom or your basement. If you are able, you may want to walk through each room listing your items in categories like furniture, clothing and jewelry.

You'll also need to estimate how much that item would cost to replace, not how much it may have cost you when you first bought it. Keep in mind that something like clothing or computers may depreciate over time while other things like record collections may gain in value.

The more information you have about your damaged possessions, including the make and model or a description of the item, the faster your claim generally can be settled. If you don't remember what you might have paid, call your credit card company and have them send you your credit card statements, says Julie Rochman of the American Insurance Institute.

It would also be helpful to have photos of your home both before and after the disaster. Ask any family or relatives if they happen to have any photos from birthdays, graduations or any other event that may have been taken at the house.

4. Consider an independent adjuster

Every insurance company dispatches their own adjuster to survey and make a judgment on what kind of settlement you will receive. If you are unhappy with the way your settlement is going, or if you don't have the time to deal with the claims process alone, you always have the option of calling in your own adjuster to help.

Remember that you can call in a public adjuster even before you start the claims process. A public adjustor can help you fill out insurance claims and help you prepare for statements where you'll have to prove your loss.

Keep in mind that independent adjusters make their money by taking a percentage of what the settlement is. Most public adjusters charge between 5 and 15 percent of your settlement claim, according to Brian Sullivan of the National Association of Public Insurance Adjusters.

If you happen to live in an area hit by Hurricane Katrina, you may be seeing more competitive rates from adjusters since they are competing for customers. Adjusters must be licensed in most states, however Louisiana is an exception. The Louisiana State Insurance Department has set up registration process for independent adjusters.

So do your homework before hiring an adjustor. Call your state's insurance department. In addition, you can contact the National Association of Public Insurance Adjusters (NAPIA) for more information about your claims adjuster, or go to

5. Don't give up

Even if you've already received a check from the insurance company, you shouldn't assume that it's the final settlement offer. If you never had a chance to survey the damage before filing, or you've forgotten to include an item, call your insurance company and reopen your claim.

There's a long window, according to Jeanne Salvatore of the Insurance Information Institute, where you can add more information to your claim.

If you have a complaint you can also go to your state's insurance department. According to Scott Holeman of the National Association of Insurance Commissioners, this is a great resource for people to mediate disputes, ask questions or lodge complaints.

Robert Hunter of the Consumer Federation says that all states will at least get a response from the insurance department and a few states will even twist the arm of the insurance company in cases where cases have been clearly mishandled, he says.

And don't forget about your wheels. If you have comprehensive coverage on your car, your insurance company will cover you for any physical damage done to your car. This means that if your car was swept away by flood waters, sustained any kind of wind damage or was hit by your neighbor's tree, your insurance company will reimburse you the current market value of your car. Deductibles for comprehensive coverage range from $250 to $1,000, according to Salvatore.

If you're in an area that was hit by Katrina and you don't have any evidence that your car was flooded or stuck because you've been evacuated, just call your insurance company and they'll be able to start the process.

Gerri Willis is a personal finance editor for CNN Business News and the host for Open House. E-mail comments to  Top of page

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