Ask Questions First, Not Later
Know the right questions to ask about your insurance before a loss
Taking a cue from the Boy Scouts of America, I’m a firm advocate of always being prepared. One way to do that is to ask yourself the right questions before a loss ever occurs. I’ll cover basic steps to take after a loss in an upcoming e-newsletter, but let’s focus on some questions you should ask right now.
Q:
Do I need an agent?
A:
The trend these days is to sign up online for the cheapest possible insurance policy, and to do it in minutes. If you’re a follower of this blog, you know that I firmly believe that you should be working with a reputable independent insurance agent for all your insurance needs. Why? Because insurance is complicated and you need an expert to help guide you through the policy buying process, and to help you deal with the insurance company in the event of a loss.
Q:
Have I read my policy, even if I don’t understand it?
A:
Although insurance policies can be almost impossible to understand, you need to actually try to read the fine print so that you can talk intelligently with your independent insurance agent. If you don’t read the policy, you might not know which questions to ask.
Q:
Do I have enough coverage?
A:
Evaluate the scope of your coverage on a regular basis, and adjust the coverage upward as needed. For example, you might have insured your house for a given amount when you first bought it, but years later the house may have appreciated in value. Adjust the coverage to make sure you get paid for what the house is actually worth in the event of a loss.
Q:
Do I have video and documentation to verify my claim in the event of a loss?
A:
We know we should take pictures and/or video of our property for insurance claim purposes, but most of us never do. Be proactive. Get your video and documents together before a disaster.
Q:
Do I have an emergency fund?
A:
When disaster strikes your home or business, it’s important to have emergency funds stashed away in the form of a credit card with no balance or in an equity line for your business.
Q:
Have I mitigated the loss potential?
A:
Whether it’s hurricanes, wildfires, or house fires, taking steps to reduce risk will reduce potential losses as well as possibly lower your insurance premiums. Steps such as installing storm shutters or cutting underbrush back from the home to reduce fire risk are both examples of mitigation steps.
The bottom line? It’s up to you to ask the right questions ahead of time to make sure your insurance is actually working for you, not the other way around.
Newsletter: (5) Steps to Make an Insurance Claim That Will Save Yourself From Headaches and Heartaches
After the Dust Settles
When disaster strikes, taking the right steps in the aftermath determines whether you’ll get what’s yours from the insurance company
So, the worst has happened. You’ve suffered a loss that you hope your insurance will cover. If you bought wisely and didn’t go for price alone, it’s quite possible that your policy will help make you whole again. However, even if you have the Cadillac of policies, there are five basic steps you need to take when filing a claim.
- Call your insurance agent immediately.
- Carefully read your insurance policy because each one has specific steps you must follow to file a successful claim. You may not understand the fine print, but you’ll get a better understanding of what you should ask your agent about.
- If you don’t have an agent, notify the insurance company immediately if there is a loss. This is particularly important for federal flood insurance claims. Prompt notification is mandatory. The typical window for notification is sixty days, but it varies by state. A public insurance adjuster could also play a pivotal role as your advocate if you don’t have an insurance agent.
- When it’s safe to return to your property, take video and/or photos of the aftermath to compare with the video and/or photos you took before the disaster. Provide the visuals with the documentation (receipts, etc.) when you file your claim.
- If you can’t get to your property, say in the immediate aftermath of a major hurricane, contact a restoration contractor or public adjuster (easier said than done when every Tom, Dick, and Harry is calling as well) to take video and/or photos of the damage before cleanup begins. All property damage must be documented prior to any cleanup efforts because disputes often arise as to the exact cause of the damage.
For example, if you have wind and flood damage, which element of the hurricane actually caused the damage? Should your insurance company pay, or is the claim covered under the federal flood insurance program? Before and after evidence is crucial.
Incidentally, never sign an agreement with a contractor that says the contractor will accept whatever the insurance company agrees to pay. Get all cost estimates for repairs in writing before signing a contract. Part of the contract you sign with the contractor should state that the contractor is responsible for taking photos and/or video of the remediation work, and for documenting the nature of the damage and the costs associated with remediation.
Living through a hurricane, tornado, wildfire, flood, earthquake, or some other disaster is often a life-changing event. Chances are you won’t be thinking clearly in the aftermath. Thus, it pays to know which questions to ask and what to do long before the worst happens. The problem is that few of us ever consider what we’ll do if we suffer a major loss, and we should. Taking the right steps is easy. It’s just a matter of being proactive.