Recovering from a disaster is quite the process. The toll it takes is mental, emotional and often times physical. As an insurance company, we want to help you make it right, but the claims payment process can be tricky, especially if your home is mortgaged. Let us here at Texan Insurance guide you through it.
Making a Claim
In order to receive your payment in a timely matter, it is important that your claim be filed within one-year from the date of disaster. What type of policy you have will determine what sort of compensation you will receive, either replacement cost or actual cash value. Some insurers require that you sign and fill out a proof of loss form. This will act as a legal record of the amount you are claiming and for which damages.
Typically, two checks are issued. The first is generally an advance to help you with the repairs cost or additional living expenses. Depending on the level of damage to your home, you can either accept an on-the-pot settlement from the adjustor, or wait it out and negotiate a better settlement based on contractor bids and other reasonable figures. Remember, your insurance will only pay for repairs comparable to the previous dwelling.
For those of you with a mortgaged home, here is where it gets tricky. When a dwelling is damaged, the check for its repair is issued to both the lender and the insured. This is done because the lending bank tends to have a significant financial interest in your home and it is in their best interest to make sure that all repairs are done in a manner that is consistent with keeping up its value. The lender must release any amount that exceeds that of your mortgage balance back to you.
Replacing your belongings is a bit simpler. If you have an actual cash value policy, then you will be issued a check for the depreciated amount of your belongings. A replacement cost policy typically requires that you purchase your replacement items first however, and then you are compensated for the amount you’ve spent.
Once your claim has been settled and repairs are underway, remember to reevaluate your insurance policies. What worked for you? What didn’t? Did you have the appropriate amount of coverage?
Source - Settling Insurance Claims After a Disaster
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