How to file a homeowners' insurance claim
Posted by the Asbury Park Press on 06/3/07
BY ALEX BIESE
STAFF WRITER
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On Dec. 22, 2005, Walt and Carol McNamara left their home for just over an hour to go to a hair appointment for Carol. When they returned, they saw fire engines in front of the house at West 12th Street in Ship Bottom. The cause of the fire, which started in the back bedroom and destroyed their home, is still undetermined. |
"The only thing we really had were the clothes on our back," Walt McNamara said. "Everything else was totally destroyed."
Right away, the couple had to find someone to board up what was left of the house, since they were obligated to protect the property as much as possible, he said.
In fact, the first step any homeowner should take when going through the process of filing a homeowners' insurance claim is to prevent further property damage, said Rachael Moore, director of communications for the Ewing-based Insurance Council of New Jersey. The insurance company will reimburse the homeowner for these repairs, Moore said.
Homeowners then should telephone their insurance company, provide their policy number and all relevant information on the loss, and prepare a list of the damaged items with a description of each, including the date of purchase and the estimated cost, Moore said. Ideally, those filing a claim also would have receipts for any big items that were damaged, such as a television, she said.
Taking photos or video of the damage to the property also will help in the claims process, she said.
Jim Gardner, a spokesman for the state Department of Banking and Insurance, advised that homeowners should document personal property with photos or video prior to any potential loss and keep the records in a safe place, such as with a relative or in a safe-deposit box.
Homeowner's burden
The most important thing for a homeowner to understand, said Leslie Knox, president of the Toms River-based Andrew K. Knox and Company, "is that the burden of proof is on the homeowner for proving the amount of loss and damages."
The biggest misconception among those filing claims, Knox said, is that "the insurance company's adjuster is simply going to walk up and give you a check. That is not going to happen. You are going to have to prove your loss."
The more detailed the claim is, Knox said, the higher the chance the homeowner will receive a satisfactory settlement.
Following the fire that destroyed their home, the McNamaras were dropped by their insurance company due to the size of the claim — approximately $480,000 — although Walt McNamara had been a customer of theirs for many years and had never previously filed a claim.
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"I guess that's the way they do business," he said. To aid in the claim process, the McNamaras hired Knox's company, an independent adjuster, to work between them and the original insurance company, which still covered the McNamaras through the claims process following the fire. |
Among Knox's duties, Walt McNamara said, was taking an inventory of everything in the house, down to how many pairs of socks were in each drawer of every dresser. The company also helped the couple with all of the paperwork that came along with filing a claim.
"The only thing we had to do was when we ended up agreeing on a number (the Knox Co.) would come out and get me to sign a release," Walt McNamara said.
Carol McNamara said she was surprised by the "initial slowness" of the whole process and that it took six to eight weeks after filing their claim before they got their first response from their insurance company.
Moore advised homeowners to be patient.
"If you think they're taking a long time, it may just be the course of the claim process," she said. "If it's a legitimate claim and it's over your deductable amount, your insurance company is going to pay it."
However, Walt McNamara said, "once it finally got rolling, (there was) a fairly quick turnaround time." The couple moved into their new home, built on the site of their old one, on June 29, 2006.
"All and all, other than being stressful and inconvenient, it was an OK experience," he said.
Save all documentation
Those filing a claim should be sure to save all receipts, canceled checks, bills and other documents related to the repair work, Moore said.
"Be as helpful as you can with the completion of your claim," she said. "(The insurance company is) there to handle your claim and do the best they can."
In 2003, when David Hayes was attending the Art Institute of Philadelphia, he brought approximately $4,000 worth of electronic equipment with him, including an Apple computer and a digital camera, said his mother, Janet Hayes of the Forked River section of Lacey. All of the equipment was stolen from his room over a long weekend, she said.
The family filled out a police report and then learned that, because David Hayes was living in school-sponsored housing, the theft was covered by their homeowners' insurance. And because some of the equipment that was stolen was brand new and purchased with a credit card, the credit card company covered the $500 deductible, Janet Hayes said.
The amount of time between filing a claim and receiving a payment, and how filing a claim will affect a client's insurance premium, varies from company to company, Moore said.
When a settlement is offered, Gardner said, the homeowner should review the estimate with a contractor and discuss it with a claims adjuster before deciding whether or not to accept it.
"If you consult with a contractor and determine, "This is not going to make my home whole again,' you may want to contact the agent or the claims adjuster and communicate that to them," he said.
Moore warned against misleading an insurance company or "padding a claim."
"Any misleading information is insurance fraud and is punishable by law," she said.
Under the Fraud Prevention Act, a person who files a claim "knowing that the statement contains any false or misleading information considering any fact or thing material to the claim" is subject to various penalties, including fines ranging from $5,000 to $15,000 as well as criminal prosecution.