Homeowners purchase insurance to protect themselves in the event of a fire or other insured peril. Many homeowners are fortunate enough not to have a fire loss, but if you do, there are several things to be aware of when it comes to handling a fire insurance claim on your house. When a fire happens and your house is damaged, keeping calm and documenting the event is a good start toward properly handing the claim.
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Report the claim as soon as possible. Most homeowners' insurance policies require the insured to report the claimed as soon as practicable. In other words, if there is a total loss of the house due to fire and all of the documentation is burnt, it'll take a couple of days to compile the information in order to call the insurance company. A delay of a few days in reporting the claim is not a violation of the home insurance policy.
Maintain a file documenting the claim. The information in the claim file should include everything from the time the claim occurred to when it was reported and who you spoke to. You should document every point of contact with the insurance company, adjuster and anyone involved in the claim. Detailed claims information comes in handy when a dispute arises about what was said and what was agreed to in the handling of the claim.
Refrain from giving sworn statements until you feel comfortable knowing your rights under the home insurance policy. When a claim occurs, it is common for the insurance company to take a sworn statement. Do not give that sworn statement until you know your rights under the policy. Insurance companies are not out to defraud you, but you don't want to accidentally provide information that is not in your best interest.
Track your additional living expenses. In the event of an insured loss, homeowners' insurance policies pay for additional costs incurred as a result of the home being untenable. If you have to stay at a local hotel and eat your meals out, keep track of the expenses. The hotel expenses and food costs may be covered in part or in whole, depending on the insurance policy limits.
Review the valuation clause on your insurance policy. Insurance policies are written either on an actual cash value or a replacement cost basis. It is an important difference because it will affect the size of the claim check for the fire loss. Replacement cost means that the insurance company will issue a check for the amount that it costs to repair or replace the damage with "like kind and quality." The actual cash value uses the original cost of the item and depreciates it. The difference between the actual cash value and replacement costs can be rather large.
Tips and warnings
- It is recommended to file a copy of your insurance policy off premises. It comes in handy in the event of a total loss.
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