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Prepping for Disaster: Navigating Insurance Before, During, and After a Claim

Blog Post - Prepping for Disaster - Navigating Insurance Before, During, and After a Claim

In 2023, the United States broke the record for billion-dollar weather and climate disasters,coming in at a whopping 28 to surpass the previous record of 22 set back in 2020. That is over $28 billion dollars that the insurance industry paid out for damages in the span of 3 years–not to mention all the money that homeowners and business owners spent out of pocket.

Does your family have a contingency plan in place when another disaster is bearing down on you? Chances are the roads out of town will be closed, electricity will be out all over town, and you will be left in the dark trying to make sense of the disaster area around you.

In this article, we’ll discuss the importance of taking the time to have a plan of action in placebefore you are thrown into survival mode, because the last thing you are going to want to do in an emergency is try to look for your insurance documents and inventory your entire home while still in a panic. As an insurance agent, make sure you’re not only educating your clients on these items, but that you’re practicing what you preach by having them in place for yourself as well.

Go paperless

One major thing you can do to plan ahead is to have these documents stored on the cloud where they are at your fingertips at a moment’s notice, out of the reach of rising water, high winds, or even fire. Some older clients opt to have a thumb drive, but you risk losing it in the event of a major windstorm or fire, so a digital backup copy is also suggested.

One important document to prepare is an inventory spreadsheet detailing your high-value items like electronics (with make/model/serial/price), furniture, clothing, lawn and garden equipment, etc. The more detailed descriptions, the better. Some people also add a folder for safekeeping of receipts and photos so everything is lined out in the event of a loss. Photos of the items as well as the interior and exterior of the home are the biggest help when asked by a carrier to send the “before” photos. There are many free spreadsheet templates available online to help get you started. A rainy weekend is perfect for starting the task, and you can continue to add to it as you accumulate new items.

Blog Post - Disaster Preparedness Tips

Don’t skimp on coverage

In this economy, it may be tempting to tweak your policy to lower coverages to bare minimums because it saves you money right now, but you need to ensure you have enough to replace the things in your home or stay somewhere until your home is repaired. The allotted money provided by an insurance claim can go quickly when you are replacing everything you own or paying for a hotel and food.

For instance, you may have $60,000 in contents coverage, but inflation has increased the value of replacement items since you purchased the policy, making the dollar amount chosen far less than what is actually needed to get your home back to normal.  This means you’ll likely end up with a futon instead of the nice loveseat that you had before.

Have money and items prepared for emergencies

Just having paperwork handy won’t do you any good if you don’t know what steps you need to take until your insurance can get an adjuster assigned and emergency funds approved. It’s important to know what your insurance can help with and what your rights as a policy holder are during a disaster.

Make sure you have an emergency fund ready to use, because insurance may not be able to get to you right away when thousands of people are affected, which means you could be stuck for daysuntil help can get to you. It may sound cliché, but being prepared is the best thing you can do to ensure you can survive in any situation. Items like canned or dried food, water, medicine/first aid kit, fuel, candles, and extra clothing can be life-saving necessities.

Understand your role in the claims process

The claims process takes time and typically involves multiple steps, even during a disaster. Some carriers will do whatever they can to urgently meet needs and provide emergency mitigation, however during a disaster there may not be contractors available or even be an open road to have boots on the ground. Many are catching up with the times and going to drones as well as satellite imagery until they are able to get to the location. You are still going to have to go through the process and submit receipts and/or photos of the loss before and after.

If it’s a widespread power outage and you’re filing for food loss, be sure to take photos before throwing away the items and cleaning up. This will help the adjuster assess the amount and estimated cost of lost items. With the ever-increasing cost of labor and materials, the cost of disaster repair is going to continue to grow.

Be sure you know what your policy covers and what the maximums are for items like jewelry, guns, furs, fine arts in case you need to schedule them onto the policy.

What are you required to do as the insured? Most states require the following:

  • Give prompt notice of damage.
  • Protect and mitigate damages to ensure your home does not incur additional damage while waiting for adjustment.
    • Temporary repairs, boarding windows, tarping roof holes, drying wet carpet, remove wet items (if possible, keep for inspection or photograph).
  • Keep receipts for materials used and record of repairs.
  • Do not begin permanent repairs until you are instructed to do so.
  • Cooperate during the investigation.
  • Prepare inventory of damages and damaged personal property.
  • Notify of changes in title or occupancy.

No one handles your business like you; be prepared for the worst while hoping for the best.Make sure you understand your coverages and add any needed endorsements like ordinance and law as well as water backup, because those items don’t come standard on most policies. Every policy is issued with a jacket that you need to take the time to thumb through, especially to look at the exclusions.

Author

Brittany L. Carter
360 Insurance – Semon Agency
Shreveport, LA

Author - Brittany L. Carter