In most states, laws require insurance companies to pay claims promptly and for the full amount covered by the policy. However, as most consumers know, getting an insurance company to pay your claim can be a difficult and stressful experience. The following checklist offers suggestions on how you can protect your rights if a fire, earthquake or other natural disaster causes you a loss.
BEFORE DISASTER STRIKES
Here’s what to do right now to make sure you’re prepared in case of disaster:
- Organize important insurance documents. Place all your insurance policies (home, auto, etc.) in a readily-accessible file that you keep year after year. Whenever you speak to an insurance company official, agent or broker about upgrading your policy, make sure you take careful notes (see below) and keep those notes in this file.
- Organize property ownership records. In the same file, place a copy of all critical financial documents: property deeds, mortgages, or any other records of property ownership. This can include credit card receipts of major purchases. (For extra protection: mail a copy of all these documents to a friend or relative you trust in another state, or store in a safety deposit box).
- Document your property and belongings. Use a still or video camera to take pictures of the interior and exterior of your home, your yard, as well as your automobile and any other possessions. Make sure you photograph the contents of your home, garage, closets or other storage areas. (This includes outside storage facilities you rent). Make sure you take pictures of every major purchase thereafter — and re-record everything once a year.
WHEN DISASTER STRIKES
If public safety officials suggest or require you to evacuate your home here is what you should do.
- Take your insurance file. If a disaster strikes and you must leave your home, take these files with you. This will help you fill out a complete claim and make it easier to document what you own and the condition of your property.
- If your safety is in jeopardy right now, don’t worry about your possessions or the rest of this checklist. Protect your family and pets. No insurance policy can replace them.
AFTER DISASTER STRIKES
Here’s what to do to make sure your insurance company pays you what you’re entitled.
- Read your insurance policy and know your rights. Insurance policies are very complicated, but try to understand as much as you can about what it covers, what is excluded, and to what you are entitled. Under California law, insurance companies are required to provide you with a copy of your rights to a fair claim settlement. You can also request a free copy of the detailed regulations that insurers must follow when handling your claim. Also, check out the resources below to learn about your rights under state law.
- Contact your insurance company to make a claim. Don’t delay. Even if you have not figured out exactly what your damage or property loss is, let your insurer (or authorized agent/broker) know right away that you have sustained a loss. Do this in writing.
- If you have lost your insurance documents request a replacement copy. Ask your insurance agent or company for a copy of your policy and Declarations Page.
- Take video or pictures of all damaged property.
- Take detailed notes. Every time you call, write or speak to anybody affiliated with an insurance company, get their name and phone number. Write down the date and time of the communication, what you said, and what they said. Do not assume you will remember a conversation — or that they will.
- Keep a copy of all paperwork. General rule: get everything in writing. Put everything in writing. Everything. Then make a copy of everything you sign and/or send (e-mail, regular mail, etc.).
- Keep a receipt of every penny you must spend as a result of the disaster. For example, if you are forced to evacuate, keep records of purchases of food, lodging, clothing, etc.
- Try to protect your remaining property to prevent further damage. Do what you can — without jeopardizing your safety — to prevent further damage or losses. For example, contact utilities to shut off water and gas mains. Your insurance company might not cover post-disaster damage that you could have reasonably prevented.
- Make a detailed list of every item damaged. Don’t leave anything out. File a claim for every item. You won’t get compensation for anything for which you do not submit a claim. Contact your credit card companies and retailers to help reconstruct purchases and identify costs for replacing lost items. Family members, friends and neighbors can help you create a full description of your loss.
- Estimate the value of your damaged or destroyed property. Estimate what it would cost to replace, and also what it was worth before it was damaged. Why the two different numbers? Insurance policies offer different kinds of coverage. Contractors can provide you with an estimate.
- The insurance company will appoint an adjuster to handle your claim. The adjuster is paid by the insurance company and works for the company, not for you. Moreover, the adjuster is not an expert on your policy, and may not know what it covers. If you think the adjuster is wrong, you may reject the adjuster’s estimates and demand a reconsideration. You can also hire a "public adjuster" to help you out.
- Have your valuables appraised independently. For antiques, art and other valuable items, you should get your own appraisal to compare with the insurance company’s assessment.
- Get insurance company approval for repairs. Don’t start repairing or replacing property, or throw away damaged property, without your insurance company adjuster’s approval.
- Take your time. Don’t be pressured into agreeing to low-ball estimates, repairs or rebuilding. Give yourself time to review the proposed claims settlement and determine whether it is fair and acceptable to you.
- Do not sign releases or waivers until you know your rights. If you have an undisputed claim, you should not have to sign a release to settle. If you are asked to sign a release find out why and be cautious about signing away your rights.
- Always be firm but polite. Know your rights and insist that the insurance company meet its legal obligations to you.
IF YOU HAVE A DISPUTE WITH YOUR INSURANCE COMPANY
- Be prepared to fight for a fair settlement and get help if you need it. If your insurer is not offering a fair settlement you can try to resolve the dispute yourself by working your way up the chain of command of the insurance company. Involve your insurance agent and broker on your behalf (but remember, they have a longtime financial relationship with the insurance company). If necessary, call the office of the president of the insurance company.
But if the dispute is a serious one, or you are unable to resolve it to your satisfaction, contact a lawyer. Many lawyers will work on a contingency basis: you pay the lawyer nothing unless and until he or she succeeds in obtaining what you are owed (then the lawyer takes a cut). Insurers can be made to pay extra — punitive damages — if they deliberately deny payment to which you are entitled. Unfortunately, some unscrupulous insurers will not pay you in full unless they believe you will take legal action.
- If you need a lawyer, public adjuster or contractor, shop around. Make sure they are properly licensed. Check references. Interview several candidates before making a selection. Choose someone who has been personally recommended to you by someone you trust. State laws provide protections when you hire these professionals.
- Insurance fraud is a serious crime. Never attempt to make a claim for property you did not own, or falsify the value of a possession.
California Insurance Commissioner Steve Poizner
Federal Emergency Management Agency (FEMA)