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Top 10 Insurance Tips for Hurricane Sandy

As hurricane Sandy is just hours from hitting us, I thought we would go over a few of the top 10 questions we get when faced with bad storms like this.

As hurricane Sandy is just hours from hitting us, I thought we would go over a few of the top 10 questions we get when faced with bad storms like this.

Just like hurricanes come in many shapes and sizes, so do insurance policies. The frequently asked questions included here provide information about what policies usually cover, along with some tips on filing claims. To find out about your coverage, consult your policy or contact us at www.allstate.com/nelsonrivera2 or by phone at 516-883-6100.

Top 10 FAQ's for Hurricanes:

1. I have reported my claim, now what should I do?
You should take all steps necessary to prevent further damage—securing property, temporarily boarding windows and roof, drying out carpets and personal property, etc. If the insured does not do this and further damage results, it may not be covered.

You should not undertake any permanent repairs, nor dispose of any damaged property before an adjuster has been able to see the damage. When there is water damage to the contents of a home, you should remove water-soaked contents such as carpeting and furniture, however, you should not dispose of such items before an insurance adjuster sees them. You can place such items outside under a tarpaulin. In the case of perishable items (i.e., food) that must be disposed of, first take photographs of that property to substantiate the claim. If you do not, some damages may not be covered.

You should retain all receipts for emergency repairs and for items which might qualify under additional living expenses (such as water, ice, rental charges at another location if the home is uninhabitable, etc.).

2. Is there anything I can do to speed up the claims process?
Although the adjuster will contact you as soon as possible, priority will be given to the most severe losses. Also, be aware that larger claims will be settled in stages, not all at once. While waiting for the adjuster, there are a number of things you can do:

  • You may wish to secure a repair estimate (preferably at least two) for the adjuster to review. This will help the adjuster with the settlement process.
  • Take pictures of the damaged property. If you have pictures of the property before the loss, these should be provided to the adjuster.
  • Make a list of all damaged property, including a description, age, original cost, place of purchase and estimated replacement cost. Any receipts or canceled checks for these items also should be included.

3. What if my home is so damaged I can’t stay in it?
Under most homeowners and dwelling forms, coverage is provided for additional living expenses. If the home is uninhabitable due to a covered peril and you must temporarily relocate, most policies will reimburse for the reasonable expenses incurred over and above your normal living costs. For example, it would probably cover all reasonable housing expenses since you will be paying a mortgage payment, but would only cover food expenses over and above what the policyholder normally would pay for food.

It is imperative that you retain all receipts for these expenses in order for them to be considered as a part of the loss. The expenses must be in line with normal living costs and must be a necessary and direct result of the loss.

Most policies limit recovery under additional living expenses to a percentage of the amount of coverage on the home itself.

4. What coverage is there for trees that are down?
There is no coverage under standard dwelling and homeowners policies for damage to trees by “weather perils” (such as wind). However, if the tree falls and causes damage to some other type of covered property (such as a house or fence), the damage to the house or fence would be covered. Separate windstorm coverage can be purchased as an added endorsement.

5. Power was out for five days and the food in my freezer and refrigerator spoiled. Is it covered?
Generally, most residential policies do not cover food spoilage resulting from power outages due to the “power failure” exclusion. A small number of companies provide some very limited coverage (i.e., $250-$500) as a coverage enhancement. Aside from this, coverage is generally not available.

6. When power finally came back on, a power surge damaged some of my electrical equipment. Is it covered?
Most homeowners policies provide coverage as “sudden and accidental damage from artificially generated electrical current”; however, coverage does not apply to loss of transistors, computer chips and similar items. Therefore, damage from a power surge would not be covered for property such as televisions, VCRs, computers or similar items.

7. The adjuster was here last week and I still haven’t gotten my check. How long is this going to take?
After the adjuster has visited the insured, he must complete detailed paperwork on the loss, which is subsequently submitted to the carrier for review. After everything has been checked, the carrier will issue the claims draft to the insured. If the adjuster is carrying a heavy claim load, there is often quite a delay in completing the paperwork by the adjuster, since they generally must do this at night, as well as the delay at the company as it deals with thousands of claims to review at one time. Often, an insurance agent can check with the adjuster to find out exactly when the paperwork was submitted to the carrier. If the papers have been sent in, the company also may be able to provide a status report.

8. I’ve just received my claim check, and it’s not enough.

If the check is for a lower amount than the insured expected, it is usually due to policy terms that require settlement on an actual-cash-value basis with replacement cost being paid at the time repairs or replacements are actually completed. Check with your agent or company.

9. What is the difference between actual cash value and replacement cost coverage?

If the policy indicates that settlement will be on a replacement cost basis, then payment will be made for the actual cost to repair or replace at today’s prices, limited only by the total amount of coverage that was purchased. If the adjustment basis is actual cash value, settlement will be made by determining the replacement cost at today’s prices and subtracting from that amount a reasonable amount for depreciation, age or obsolescence. Some policies provide coverage for the home on a “guaranteed replacement cost” basis. In this situation, the carrier will pay whatever it costs to repair or rebuild the home, regardless of policy limits.

10. I was told I was ‘underinsured.’ How can this be?
Too often, homeowners neglect to review their homeowners insurance. Changes to your home such as the addition of a room or an increase in your home’s value may affect your coverage. 

If you have questions about your policies, even if it isn't with us, we will be helping out the community of Port Washington this week to help answer any claims questions you may have. Feel free to call us or visit us online. (516) 883-6100 or www.allstate.com/nelsonrivera2

Also, follow us on Twitter and Facebook to keep up to date with all storm happenings and what is going on with our office. Remember, please be smart and keep you and your family safe first. We can help with the property damage, but you and your family are irreplaceable.

This post is contributed by a community member. The views expressed in this blog are those of the author and do not necessarily reflect those of Patch Media Corporation. Everyone is welcome to submit a post to Patch. If you'd like to post a blog, go here to get started.

Michael Lipson November 05, 2012 at 01:01 PM
In his article, Mr. Rivera is obviously referring to the insurance company's adjuster. His article completely fails to mention the benefits of hiring an independent public adjuster to make sure that the homeowner receives the full benefit of the insurance policy and that the claim is adjusted as fairly and expeditiously as possible. This is especially true when the damage and loss is extensive, where the failure to hire an independent public adjuster would often leave the homeowner at the complete mercy of the insurance company's adjuster. I can't believe the author left this one out.
Amy Bryan November 07, 2012 at 04:15 PM
Michael - I was reading your comment after reading Nelson's artile. Yes you are right that he is referring to an insurance company adjuster - that was what the title was - insurance tips. While I'm sure Nelson has a lot more tips where this came from, he only touched on a few. As an insurance agent myself, I tend not to post about public adjusters because that is up to the consumer to choose whether or not to go that route. I know some very good PA's that have helped some of my own clients so I don't discount that as an option. However, what you failed to mention, which I do tell my clients, is that a public adjuster, while in its own right does have a place in working with large claims that are not going smoothly with the company, does charge a fee of up to 6% of whatever the settlement is. So if the company gave the client $500,000 for a loss, the PA will get $30,000 of this $500k, which in turn means the client REALLY gets $470,000 to rebuilt their house instead of the full $500,000. Of course, you probably knew that because it sounds like you know how a public adjuster works from your post. :-)
Michael Lipson November 22, 2012 at 02:26 AM
Amy, In my past life, I worked for a major property/casualty insurance company as an attorney. One of my responsibilities was drafting and interpreting insurance policy language, specifically with regard to claims. I also worked as a lawyer for an insurance defense firm, representing insurance companies when the adjustment process broke down and claims could not be settled without litigation. It left me convinced that the policy language was not only drafted in favor of the insurance companies, but that the definitions, endorsements and exclusions were intentionally vague, confusing, contradictory and even misleading, leaving the homeowner at a distinct disadvantage. Yes, the policy holder has to pay a fee to a public adjuster. But is it worth it? Definitely yes. Here's a link to an article I found. http://www.timesunion.com/business/press-releases/article/Public-Adjuster-Hurricane-Sandy-Flood-Damage-4032300.php The difference recouped in a homeowner's recovery with the help of a public adjuster can be enormous. If it was me, I would hire an independent public adjuster at the start of the claim process, because it is a complicated one, the adjuster knows what he/she is doing, the homeowner should not have to be aggravated and instead should have peace of mind in knowing that an experienced advocate is attempting to extract every dollar the homeowner is legally entitled to.

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