The Insurance Claims Process

Maximizing your insurance benefit

Claim Process

Confirm deadlines for submitting claims.

Be sure you request the maximum amount of temporary living before the claim deadline. We lost out on four months of temporary living expenses and the move back in because our home repairs took longer than expected and we submitted after the claim deadline.

When should I file my claim?

File your claim as soon as possible. During major disasters, the insurance companies will send a team to the location to perform site inspections. The teams typically arrive within a week. Many of these adjustors are professional major claims specialists and travel from major disaster to major disaster.

What is the timeline for completing the claim?

Typically, one year. This may not be realistic in a disaster situation. In a federally declared disaster, the insurer may extend the period to two years. Two years still may not be sufficient.
It is very important that you understand the timeline for your claim. If you do not think you can complete all the claim paperwork in the time frame, consult with your insurance agent well in advance about requesting an extension.
If your insurer does not allow an extension, be sure to maximize your temporary living allowance prior to the deadline.

Why does it take so long to process the claim?

The adjustor can quickly authorize smaller payments.
For large claims, there may be another level of review. Be prepared to provide additional documentation, such as local code requirements, photos, and engineers reports.
The insurer may hire a company to provide a second estimate. When the estimator comes to your home, be sure to walk down the property with them, and provide information that should be incorporated into the claim.

Repair Estimate

Ask a friend or colleague who is familiar with construction to review the insurance estimate.

What does the adjustor do?

The adjustor will inspect your property and generate a repair estimate. There may be two adjustors, one for personal property and one for the structure.

The structural repair estimate will likely be generated using a computer program that factors in considerations such as square footage requiring repair, type of building materials, and any customization. Insurance will then provide an estimate for the payout from the program, less the deductible and depreciation.
The personal property estimate will be based on what was damaged or lost, less depreciation.

What if you disagree with insurance estimate for repairs?

If the replacement is more expensive than the insurance estimate, obtain a quote from a local vendor with the actual cost. For example, if you have a custom front door with fancy glass, obtain a replacement cost quote from a local millwork.
If damage was not included or was discovered later, submit photos and explanations.
If services are more expensive, obtain an estimate from a local contractor for the services

What if you need an engineering assessment?

Your insurance likely will cover the engineer’s inspection and report. Depending on your policy, the fees may be be included as part of your total Replacement Cost Value (RCV). For example, inclusion of the inspection and report might reduce the maximum amount you can receive for repairs from $450,000 to $440,000.
In the case of the 2018 Alaska Earthquake, my insurance company brought up structural engineers at no cost to the policyholders. Follow-up engineering support was covered under the policy.

Insurance Estimate

This is from our insurance estimate

Image of a repair estimate from insurance

Insurance Settlement

When we settled with insurance, the repair amount was 98% of the Replacement Cost Value of our home. We could have repaired our home but chose to demolish it and rebuild.

We received our first home damage check within a month. The check was made out to us and our mortgage company. When we settled with insurance 18 months later, we received a second check also made out to us and the mortgage company.

We received a direct deposit for our personal property loss within a month.

When will the insurance company declare your home a total loss?

It is a common misconception that insurance will declare your home a total loss at a certain threshold of damage. Insurance providers only declare a home a total loss if it is not possible to repair it. If your home is destroyed and you choose to rebuild, the company will pay you the full Replacement Cost Value (RCV), less the deductible.

If your home is severely damaged, the company will pay you the amount to repair it. It is up to you to decide whether you want to repair or replace.

When will you receive your money?

The adjustors want to complete the claim and have the check(s) sent out before the team leaves. A major loss claim will take more time.
If your home and other property claim (not personal property) exceeds a certain threshold the payment will be sent to you and your mortgage company. When you borrowed money to buy your home, the mortgage company became a co-insured. Sending the check to you and the mortgage company protects the mortgage company from you taking the insurance rebuild money and disappearing. The mortgage company will hold the amount received in escrow. You will need to contact your mortgage company loss department to understand the company'sr process for obtaining the funds.

What if your insurance payment is not enough to repair or rebuild?

If you suffer a catastrophic loss, insurance likely will not cover all of the expense related to the repair or rebuild. Additionally, prices can spike after a natural disaster.
You may need to refinance your home, obtain a home equity loan, or apply for a Small Business Administration loan.

Can you get help from FEMA for what Insurance did not cover?

Probably not.

If the FEMA maximum grant for the year your loss occurred is $35,000, for example, and you receive more than that from insurance, you are not eligible for any help.
FEMA funds are for very specific purposes. General home repairs do not fall into the FEMA categories