When images of destroyed homes, living rooms in flames or neighborhoods underwater flash across the television screen, viewers look with empathy and sadness. But what happens after the television crews leave? Do the homeowner’s insurance companies just start writing checks? What if your insurance agent’s home and office were destroyed in the disaster also?
When hurricane Katrina hit the Gulf, it destroyed everything in its path. In addition to countless homeowners, the storms destroyed businesses including many agents' homes, offices and insurance claims centers. When a natural disaster such as this occurs, insurance companies take the first step to set up “office” in tents and mobile trailers. These temporary shelters act as a communications center for all people in the surrounding areas. Local people would come by to ask questions, meet with their claims adjustors and take care of each other.
When Mother Nature causes extreme circumstances, sometimes an unconventional response is required. It was reported that some agents started filing claims for their clients without even discussing it just to begin the process and get the claim “in the queue.” Some companies allowed customers to submit claims through any agent in the country and set up a priority line to assist. Some larger companies were able to use satellite imagery to determine damage in some neighborhoods that were entirely flooded to begin filing claims.
For those of us lucky enough to not have been affected by the wrath of Mother Nature, there are lessons to be learned from the quick-thinking agents in the Gulf. When tragedy strikes, you can usually expect your homeowners policy to cover or help cover additional living expenses for up to 12-24 months while your home is being repaired. But this reimbursement is only offered after the insurance company verifies you have a legitimate claim.
Today there are possibly thousands of policyholders that are still waiting to get their claims paid because they didn’t file soon enough. This preaches the importance of contacting the insurance company as soon as something happens. To be prepared for the waiting period, it’s a good idea to have cash available in a liquid checking or savings account. Keeping cash at home isn’t a great idea because if your home burns down or is washed away and you weren’t able to get to your cash, most homeowners insurance policies only cover $100-$200 in cash whether it is stolen or burned up in a fire. Your goal should be to have an emergency fund available to take care of your family for 2-4 weeks (minimum) if possible.
Even if doesn’t make the national news, even small homeowners claims are worth taking care of immediately. If it seems insignificant or you think “I’ll deal with it later.” It is important to start soon. In addition to contacting your insurance company, take steps to prevent further damage to your home if possible. Be sure to hold off making any repairs until you see or talk to an adjuster first and always keep your receipts, for proof of expenses that can be reimbursed later.