Insurance Claims Process



UNDERSTANDING THE PROPERTY INSURANCE CLAIMS PROCESS

THE INSURANCE COMPANY'S ROLE

THE INSURANCE COMPANY

The insurance company’s role is to assess damages to your property that are related to the current claim filed, and to pay for any and all repairs as outlined in your policy.

CONTRACTOR'S ROLE

The contractor is responsible to do the following: determine the scope of damage to the property; upon request, provide an estimate of repairs to you the homeowner and the insurance company; obtain all required permits and approvals in order to perform the work; conduct all repairs necessary in order to correct the damage in question; perform the repair work according to local building codes and requirements; provide all materials and labor necessary to perform the work; invoice the insurance company for the work done; collect all applicable insurance proceeds from you, the homeowner.

INSURANCE SUPLEMENTING

There may be instances where the contractor’s estimate and the insurance estimate for repairs differ based on the actual scope of work and/or the cost of a particular item. In this case, it is the contractor’s obligation to present the differences to the insurance company with documentation supporting the contractor’s position as to why the insurance estimate should be altered. If the contractor’s position can be supported, in most cases, the insurance company will come to an agreement and make changes as needed. The process for reconciling the contractor and the insurance company on these differences is called supplementing.

INSURANCE COMPANY'S ROLE

The insurance company’s role is to assess damages to your property that are related to the current claim filed, and to pay for any and all repairs as outlined in your policy.
As you can see, it is important to have a contractor who can perform all facets of the work properly—on the construction side as well as on the insurance side.
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THE HOMEOWNER'S ROLE

YOU, THE HOMEOWNER

Your role as the homeowner is very important. You are responsible for the following: to select a contractor; to pay for the deductible as set forth in your policy; to relay certain information from the insurance company to the contractor; and to pay all monies received from the insurance company to the contractor for work performed. These items are spelled out in more detail below.

SELECTION OF CONTRACTOR

By law, the insurance company cannot dictate who you use as a contractor; therefore, it is your responsibility to choose whom you employ to complete the needed work and repairs to your property.

RELAYING INFORMATION

Because the contractual relationship is between you and the insurance company, some insurance companies may require additional approvals from you before they will speak with the contractor regarding the claim. Also, even though the contractor will often handle most paperwork with the insurance company, it is still common for the insurance company to release claim information only to the homeowner. Accordingly, it would be helpful for you to do the following: first, simply call your insurance company and authorize and instruct the insurance company to speak with—and release all pertinent information to—the contractor to settle your claim; and second, if you do still receive information regarding the claim directly from the insurance company, convey this information to the contractor in a timely manner.

DEDUCTIBLE

As the homeowner, it is your responsibility to pay the deductible. The amount of the deductible is deducted from the total claim payment made by the insurance company. For example, if the cost of repairs the insurance company agrees to cover is $10,000, and you have a $1,000 deductible; the insurance company will pay $9,000. When added together, your deductible and the insurance proceeds will equal the $10,000 cost of repairs. Sometimes the insurance paperwork may appear confusing, and it may appear like the deductible is being charged more than once. This is not the case. The deductible is only applied once, but it is applied from the first payment and carries through until the final payment is made. The main thing to understand is that the deductible will be paid only one time per claim. The deductible is paid directly to the contractor for work performed—and it is usually paid either when you hire the contractor or when you receive the final invoice.

INSURANCE PROCEEDS

After the inspection has been made by your insurance company’s adjuster, a copy of their estimate for damages, as well as the first payment for repairs, will be mailed to you. When the work has been completed satisfactorily, the contractor will send a notification to the insurance company, and the insurance company will then mail you the remaining check(s). It is unlawful for a homeowner to profit from an insurance claim; therefore, it is your responsibility to convey all money received from the insurance company to whoever is performing the work. Sometimes the mortgage company is also listed as a payee on the initial check; therefore, it is important to contact your mortgage company and enquire about the best way to expedite the release of payment. Your mortgage company may require a copy of your signed contract with the contractor before payment is released. It is beneficial for all parties to have the authorization of release of funds completed before work begins on your property..
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COMMON INSURANCE CLAIM TERMS

Are you confused by some of the insurance claim terminologies you’ve heard from your adjuster or read in your policy? Here are some of the common terms used when discussing an insurance claim or policy. These definitions are basic interpretations that could help you understand the insurance claim terminology..

Insured:
The insured is the individual who has the insurance policy on the property. If you are the one who is named on your home’s insurance policy, you are considered the insured
Deductible:
Basically, your deductible is the amount of money that you are responsible for when an insurance claim is filed.
Depreciation:
This is the amount that your insurance claim payment may be reduced by due to age or wear and tear. For example, a roof claim may total $6,000.00 but may be reduced to $3,500.00 because of the roof’s age.
Hold-Back Payments:
In some cases, a portion of the claim – possibly the depreciation – may be held back by the insurance company until it is confirmed that the repairs have been made. After repairs are complete, the amount held back is released to the insured
Supplement / Supplemental Estimate:
In many cases, the initial estimate written by the adjuster will be missing some important things such as code related items or damage that was not evident during their initial inspection. When this happens, a supplemental estimate is prepared by our estimator and sent to the adjuster for review. After approval, the insurance adjuster will typically issue the additional funds to you.
Mortgage Company:
If you have a mortgage on your home, there is a chance that the mortgage company’s name will be on the check issued by your insurance company. This is not abnormal. Your mortgage company has an interest in your home and wants to be sure that repairs are made when storm damage or other events occur. If the mortgage company is listed on the check, it will be important to get them involved right away to find out what documentation they may need in order to process the payment.

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