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Dealing with your insurance company after a fire or disaster

Homeowners who have had their property damaged or destroyed will seek help from their insurance companies, with different degrees of success. Here are five pointers to remember while dealing with your insurance provider and its adjustors.

1. Get a Head Start

If you were forced to from your house, you might not have remembered to pack basic requirements like a toothbrush and work clothing. Your homeowners’ insurance will pay the expense of replacing these items, but you don’t have to make a claim or wait for it to be granted before going to a department shop to buy that office suit.

Instead, request an advance against your future claim from your employer. Request that a corporate representative deliver a check to you wherever you’re staying, whether it’s a hotel or a friend’s home. Keep all of your receipts, and be fair — if you misplaced khakis and a jacket, don’t go out and buy Armani outfits (you’ll end up paying the difference).

Check your policy; even if you have “replacement” coverage for your home (see Tip Six below), you may only have “actual cash value” coverage for your personal belongings. A good agent will point this out to you and recommend that you purchase an endorsement so that your belongings are also covered under a replacement insurance.

2. Keep Your Property Safe

Every coverage requires you to take reasonable precautions to protect your belongings. This is referred to as your “obligation to reduce damages” in legalese. It includes measures as simple as covering a part of a leaky roof with a plastic tarp until it can be fixed or turning off the water when a pipe bursts. When you file a claim, your insurance company will cover these expenses. You may also need to take the following procedures to mitigate your losses:

Put a stop to the smoldering. If the structure is still burning after a fire, call the fire department to see what may be done to prevent a flare-up.

It should be boarded up. Board up your property and consider installing a movable chain-link fence to keep people away to prevent vandalism.

Maintain vigilance. You may need to maintain a tight eye on your property depending on the circumstance, looking for new concerns and making sure it hasn’t been disturbed.

3. File Your Claim As Soon As Possible

Homeowners are required to disclose their loss as soon as is reasonably possible under all policies. You can comply by phoning or sending an email to your agent. Following that, you’ll be requested to submit a “proof of loss claim,” in which you list your losses and their values. (Hopefully, you followed the advice in “How to Prepare a Home Inventory in Case Your Property Is Damaged or Stolen.”) If you wait too long to tell your company, you may find yourself at the bottom of the queue when it comes time for an adjustor to handle your claim.

Purchase a three-ring binder.

You must be organized when dealing with an insurance company over a significant claim. If you and the firm later disagree about who said what to whom and when, calls, emails, and letters might be key pieces of evidence. Take notes on every phone call, and save all of your correspondence in one binder section. Estimates, invoices, bills, permits, and repair contracts can all be kept in separate areas. Never give away an original document; if your insurance company requests a copy of an invoice or bid, make a copy of it.

4. Ensure that the insurance company responds quickly.

Fortunately, insurance companies are required to respond to claims within a reasonable amount of time. They must provide you a “notice of intentions” within 30 days of receiving your claim in California, for example. If your coverage isn’t in question, you’re also entitled to reimbursement within that time frame. Write to your firm (and consider submitting a copy to your state’s Department of Insurance) if you haven’t heard from them and believe they are dragging their feet needlessly. When they’re in the midst of a calamity and are aware that all eyes are on them, insurance firms are less inclined to drag you along.

5. Keep a record of your living costs

A “loss of usage” clause in your policy will allow you to payment for living expenses while you’re away from home. You are, however, only entitled to additional living expenses, which is the difference between what it costs you to live at home on a daily basis and what it costs now. For example, if you used to eat most meals at home and spent $300 per week on groceries before the fire, but now spend $400 per week at restaurants, you can only claim $100.

When it comes to the motel cost, though, you’ll almost certainly be able to claim the entire amount. You must pay your mortgage, taxes, and insurance even if you are unable to reside at home. (For additional information on paying your insurance premiums, see Tip Seven below.)