The devastation resulting from Hurricane Harvey is likely to cause another round of troubles for many homeowners. They might have to negotiate with their insurance companies to get cash to repair wind and water damage. Insurance companies have certainly become tougher in the wake of other recent hurricanes including Irene, which struck New Jersey last summer. Many insurance carriers have raised their rates and changed their standard coverage by putting in new hurricane and wind exclusions and deductibles to their insurance policies.
The first thing to do is to dig out your homeowner’s insurance policy.
Thoroughly read it and try to understand what kind of coverage and exclusions you have. Note that after Hurricane Irene, insurers inserted large wind and hurricane deductibles into their policies, sometimes as much as 2% to 5% of the insured value of your home. So, if the insured value of your home is $400,000.00, your deductible can be as much as $8,000.00 or $20,000.00.
Even worse, many insurance policies now contain what is known as “anti-concurrent causation clauses” in their insurance policies. This means that if you have physical damages from multiple causes, like wind and flooding, and wind is covered while flooding is not covered, then you get nothing at all.
There is one positive in all of this: if the water rises high enough to flood your car, you are probably covered by your comprehensive car insurance policy.
Most homeowner’s policies will cover the cost of food that spoils during a power outage, but unless you have very expensive products in your freezer and no other damage whatsoever, you will have to come up with the $250.00 or $500.00 deductible, so it useless to file an insurance claim for merely spoiled food.
As you would expect, you should always promptly file your insurance claim. Oftentimes those who file first have a better chance of recovering their entire losses. Also, federal flood insurance has a sixty (60) day deadline, although oftentimes this sixty (60) day deadline is extended after catastrophic storms, such as Super Storm Sandy. Nonetheless, please immediately file your homeowner’s and/or flood claim to avoid missing any deadlines.
Be knowledgeable about the laws pertaining to hurricanes or storms in your state. In New Jersey, if the storm starts out as a hurricane on the coast and is then downgraded to a tropical storm when it hits your inland house, the higher hurricane deductible may apply to your claim. Fortunately, Governor Christie negated hurricane deductibles for Super Storm Sandy because it hit land as a tropical storm and not a hurricane.
If you need legal advice relating to your property damage insurance claim, we suggest that you contact an experienced attorney who specializes in insurance claims and property damage as soon as possible.
How Do You Document Your Tangible Personal Property (Contents) Loss?
Many of those affected by Hurricane Harvey are going through the trials and tribulations of putting their lives back together. Unfortunately for many, added problems occur at the hand of their insurance companies. Some insurers are delaying claims or reducing claim awards based on policy language (exclusions) as well as the required “proof” of losses.
Throughout the insurance claims process, policyholders should be keeping detailed records and photographs of all damaged and destroyed tangible personal property (i.e. contents). Listing items and gathering receipts can make it much easier to process the insurance claim. Some insurers are trying to reduce the claim amount or even disregard items outright because the policyholder cannot provide evidence that the subject items were at the property during Hurricane Harvey.
Actual Cash Value versus Replacement Cost Policies
During the claims process the policyholder and the insurance adjuster will create a detailed list of everything that was damaged or destroyed. They will record the age, value and replacement cost for each item. Not surprisingly, the insurance adjuster will most likely depreciate the items based on their age. Then the insurance adjuster will assign the actual cash value for the entire inventory. Once you replace the items that have been destroyed, the insurance company generally owes you the balance for the actual cost of replacement or repair. Of course, as always, this depends upon the actual wording of your insurance policy.
If you have an ‘Actual Cash Value’ policy it is important to pay close attention to the method by which the insurance adjuster depreciates items. The insurance companies are looking to pay the minimum, so depreciation will work in their favor. You have the ability to negotiate a more favorable depreciation figure, because it is subjective and open to discussion. An attorney skilled in the area of insurance claims can assist with successfully negotiating a more favorable recompense for your damaged or destroyed tangible personal property.
A ‘Replacement Cost’ policy covers the entire cost of replacing lost items. Under this policy, the policyholder must actually replace the items and send the receipts to the insurer with a demand for payment.
Proper inventories of lost or damaged items are critical to the claims process. Do not let the claims adjuster automatically disregard details or rush you through the process. Most importantly do not allow the claims adjuster to hurry you through a quick (and usually insufficient) cash settlement. It takes time to calculate these losses fairly and rushing through the process may result in the insurance company vastly underpaying your claim. Believe it or not, some insurance adjusters may even tell you that you are under-insured or your policy limits are too low in an effort to get you to agree to a quick (and usually insufficient) cash settlement. Be wary of claims adjusters who offer a fast check accompanied by a waiver, which releases the insurance company from any further obligation. Read all checks and drafts on both sides and be wary of any that have words like “full settlement” or “final settlement” printed on them. Never sign a waiver or release, or endorse and deposit an insurance company check, without first consulting with an experienced attorney to carefully evaluate the entire claim and explain your legal rights.
Remember … your insurance policy does not require you to sign away your legal rights in order to get paid fairly for a covered loss!