How does the insurance claim process work?

After a storm, all anyone wants is for life to get back to normalcy and your insurance company wants the same. Storms will usually affect your roof, the rest of your home, and your interior belongings. You will receive several payments from your insurance company to perform repairs and replace personal belongings. Here’s some information that may help you with the process.

 

YOUR INITIAL PAYMENT WILL NOT BE YOUR LAST PAYMENT.

The first step in your insurance claim after a storm will most likely be a call to your insurance company's claims department. They will send an adjuster out to your residence to access the damage and provide you with an estimate to replace or repair your roof. They will send you the first check, which is the cash value of what was lost or damaged. The cash value is basically the current value of your roof after depreciation. Don’t worry because this will not be the final check you receive. Once your roof has been repaired, submit your final invoice to your insurance company and you will receive a 2nd check for the recoverable depreciation amount.

That being said, in an effort to save money on premiums, some people have opted out from the recoverable depreciation option in their homeowner's insurance policy. In that case, you will only receive the cash value of your loss. Some insurance companies will offer you a one-time payment settlement option the same day they inspect your property. If you accept this option you will be paid the full value of your loss at one time. This usually only ever happens if you have your roofer meet with the adjuster on the day of the inspection.

 

YOUR MORTGAGE COMPANY HAS INTEREST IN YOUR CLAIM TOO!

Having a mortgage adds a few extra steps into the insurance claim process as well. The check you receive from the insurance company will have to be endorsed by your lending company. You will have to notify your lending company that your roof was affected by the storm and will need to be replaced through your insurance company. You will need to send them settlement documents from your insurance company and the estimate for the repairs or replacement from your roofing company.

It is always good to ask your mortgage company what additional document they will need from your roofing contractor before beginning work. Many times your mortgage company will wait until your trying to pay the roofing company to tell you of additional documents needed. The last thing you need is for your money to be on hold when trying to pay your contractor.

The mortgage company may want pictures so be sure to take before and after pictures of the repairs taking place. If you are not comfortable doing this you can ask your contractor to take some pictures for you. These pictures are usually enough proof that your roof has in fact been replaced. Adversely the mortgage company may want to do an in-person inspection and this may sometimes delay the process. Be sure to schedule your inspection as soon as the roof is replaced to avoid further delays in receiving the final check in your claim.

 

CO-OPS AND CONDOMINIUMS MIGHT HAVE AN INTEREST IN YOUR CLAIM TOO!

Similarly to your lending company your Co-op or Condo company may have an interest in making sure your roof is restored with the money you receive from your insurance settlement.

 

HOW LONG WILL THE ENTIRE PROCESS TAKE?

When there is no mortgage on the home, the entire process usually takes about 2 to 4 weeks. When there is a mortgage on the home the entire process will take about 4 to 6 weeks. That being said sometimes this process can take a little longer. On average the entire claim process takes about 4 weeks from when the time you call to make a claim and when the roof has been replaced and paid for. To expedite the process you want to hire a roofing contractor that has experience processing insurance claims and you want to be sure to submit documents in a timely manner.

ADDITIONAL LIVING EXPENSE (ALE)

In some cases, the damage to your home may be so severe that you will have to live elsewhere while your home is being restored. You will receive a separate check for ALE which is to be used to cover the cost of living elsewhere during the renovations. Make sure this check is made out to you and not anyone else. Some contractors will ask you to sign a “direction to pay” form which allows them to be paid directly from your insurance company. This is ok and can expedite the process just be sure that your ALE money is sent directly to you.

 

WHAT ABOUT YOUR PERSONAL BELONGINGS?

In some cases, your personal belonging will be lost as well. Similar to your roof claim you will receive two checks for this as well. The 1st check is for the actual cash value of your belonging and the second will be paid out when you replace the items that were lost. You must replace the items to receive the full amount of your settlement.

 

HOW LONG DO I HAVE TO REPLACE MY ROOF?

It's always good to double check this information with your insurance company but most of the times you have 1 year to replace your roof. 1 year from the date the claim was approved by your insurance company. If you wait longer then one year you may have trouble receiving the second check for the recoverable depreciation amount.