The Residential Property Insurance claims process can be a daunting experience.
From filing paperwork to meeting deadlines and negotiating with insurance adjusters… No wonder so many property owners have trouble getting the payout they deserve.
The problem is:
Insurance companies don’t always have your best interests in mind. According to a Weiss Ratings study, the 13 largest homeowners insurers in the country denied 47.5% of their claims last year.
That means almost half of all homeowners’ insurance claims were closed without payment.
The good news is that property owners can significantly increase their odds of a successful claim outcome by understanding the process and avoiding common pitfalls. Knowledge is power when it comes to residential property insurance claims.
Here’s what you need to know…
Here’s what’s covered:
- The residential property insurance claim process
- Properly documenting your damage
- Common reasons claims get denied
- Tips for dealing with adjusters
- When to get professional help
The Residential Property Insurance Claims Process
The claims process starts the second damage occurs to your property.
Many homeowners don’t realise how time-sensitive this process is. The Insurance Information Institute reports the average homeowner took 50 days to report a claim last year, across all perils.
That’s just way too long.
The longer you wait to file a claim, the harder it becomes to prove your case. Insurance companies love to find any reason to minimise or deny a claim. Delays give them ammunition.
Here’s the typical claims process broken down:
- Report the damage to your insurance company ASAP
- Document the damage with photos, videos and written descriptions
- Meet with the adjuster for their inspection
- Review the settlement offer before signing or accepting
- Negotiate or appeal if the offer is not fair
Pretty simple right?
The challenge is each of these steps has potential pitfalls that can derail your entire claim.
Documenting Your Damage
This is the area where most homeowners fail.
Proper documentation is by far the most important factor in getting your claim approved. Without solid evidence, you have no leg to stand on.
And insurance companies know it.
Here’s what to document:
- Take photos and videos of all damaged areas before starting any clean up or repairs
- Keep all damaged items until the adjuster has inspected them
- Save all receipts for emergency repairs and temporary living expenses
- Create a detailed inventory of damaged or destroyed personal belongings
- Obtain written estimates from licensed contractors
The Insurance Information Institute estimates only 47% of homeowners have an inventory of their possessions. This means over half of all homeowners would have a hard time proving what they owned if a disaster occurred.
Don’t be one of them.
Common Reasons Insurance Claims Get Denied
It’s always good to know what mistakes to avoid. Knowing why claims get denied helps you stay off that path.
Policy exclusions are the number one reason. Most homeowners are blissfully unaware of their policy limitations when it’s time to file a claim. Floods, earthquakes and certain types of water damage are often excluded from standard homeowner’s policies.
Missed deadlines are another major cause of claim denials. Insurance policies typically require you to report damage within a certain number of days. Miss that window and you may lose your right to file that claim entirely.
Insufficient documentation is also a major issue. If you can’t prove what you lost or how the damage happened, expect resistance from the insurance company.
Pre-existing damage claims will also be denied. Insurance companies hire investigators to find out if damage existed before the covered peril.
Remember…
Insurance is a business. Insurance companies exist to make a profit. The easiest way to do that is to deny as many claims as possible. The burden of proof is on you, the homeowner.
Tips for Dealing With Insurance Adjusters
Adjusters are not your friends.
Harsh but true. Insurance adjusters work for the insurance company, not you. Their job is to assess your damage and often determine the minimum payout possible.
Tips for the adjuster visit:
- Be present at all times during every inspection
- Point out all damaged areas yourself, don’t let the adjuster miss anything
- Take your own photos/videos while the adjuster is working
- Ask questions, get explanations in writing if possible
- Don’t sign anything you don’t fully understand
Never accept the first offer without fully reviewing it. Insurance companies will typically lowball their initial settlement offer hoping the homeowner will accept without question.
And here’s a little secret…
You have every right to negotiate. If the settlement offer doesn’t fully cover your repair costs, push back with documented evidence. Get multiple contractor estimates and submit those as proof.
When to Seek Professional Help
Sometimes it’s just not enough to go it alone.
If your claim has been denied, significantly underpaid or is taking far too long to process… It might be time to call in the big guns.
- Your claim has been denied with no clear explanation
- The settlement offer is far below your actual damages
- The insurance company is no longer responding to your calls
- You’re facing complex damage from multiple causes
- Deadlines are looming and nothing has been resolved
Hiring a public adjuster, attorney or insurance claim specialist can help level the playing field. These professionals understand insurance company tactics and how to effectively counter them.
Yes they charge a fee. But their knowledge and expertise often recovers far more than the average homeowner could on their own.
Wrapping it all up
Successfully navigating the residential property insurance claims process boils down to three things.
Preparation, documentation and persistence.
The statistics don’t lie. With denial rates on the rise and insurance companies getting more stingy with claims, property owners have to be more proactive about protecting their interests.
- Report damage immediately and don’t delay
- Document everything with photos, videos and receipts
- Know your policy exclusions before disaster strikes
- Stay present and engaged during adjuster inspections
- Never accept lowball offers without negotiating
- Don’t be afraid to get professional help if needed
The insurance claims process is not designed to be easy or homeowner-friendly. Insurance companies have entire teams of professionals working to protect their bottom line.
You deserve the same level of advocacy working on your behalf. Whether you choose to handle the claim yourself or bring in experts, staying informed and organised will give you the best odds of a fair settlement.
Your home is likely your biggest investment. Protect it by knowing how to successfully navigate the claims process when disaster strikes.
