|
Lessons Learned: For those of us not effected by these disasters we can always learn a few lessons about coping with future disasters from the thousands of policyholders that are still
waiting to get their claims paid. As soon as possible, take steps to prevent further damage to your home if possible such as covering the roof with a tarp and boarding up the windows when your local and
national news says a bad storm is coming your way. Do not wait until its too late.
Extreme circumstances dictated unconventional responses: some agents even filed claims for their clients without even talking to the clients just so
they could get the claim “in the queue.” This caused a lot of problems in the long run. Allstate allowed customers to submit claims through any agent in the country and set up a priority line to assist. They sent email to agents in the areas surrounding the
disaster areas to act as messengers by “word of mouth” to their fellow agents in the effected areas. The larger companies such as State Farm & Allstate that service claims for the national flood Insurance
Program even used satellite imagery to determine damage in some neighborhoods that were entirely flooded. We need a better way to process claims when disasters like these happen.
What Does Homeowners Insurance Cover?
You can generally expect your homeowners insurance to help pay for additional living expenses for up to
12-24 months while your home is being repaired. But, homeowners insurance usually pays only after they verify you have a legitimate claim. After Katrina, many insurers made an exception, automatically
distributing enough to cover two weeks’ worth of additional living expense to anyone in an area subject to mandatory evacuation. Some companies even gave small advances on contents under the personal property
part of their homeowners insurance policies. Thousands of dollars were even sent to peoples PayPal account, up to $2000.00 and it was found out later many of these transactions were fraudulent.
If you have to wait to get your check, it helps to have cash that is easily accessible in a bank account or money market fund. Stashing cash at home isn’t a great idea because
if your home burns down 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. If you can always have plenty of bottled water and
canned foods available. In a disaster it might be hard to even find a local bank to get
cash so you need to think ahead of time and prepare yourself and your family. Debit/credit cards with a statewide or national bank would perhaps be better. So having cash on hand is something you need to have
available.
Your biggest problem in getting your claim handled may be in either not having the proper
homeowners insurance coverage
or not having enough coverage. Its so important to get the right amount of coverage for your needs. DO NOT take the cheapest coverage because you will NOT get the amount of coverage you really need.
Most good homeowners insurance policies today cover up to 120% of your dwelling coverage limit. It is important that you review the dwelling limit with your agent every couple of
year’s at a minimum. Homeowners insurance policies do not cover Flooding, but you should again see your agent for this coverage because you never know when you home may be flooded and if you do not have
that coverage you will not get paid.
Remember that flood insurance and earthquake damage are not covered by a standard homeowners policy. If you buy a house in a flood-prone area, you'll have to pay for a flood
insurance policy that costs an average of $400 a year. The Federal Emergency Management Agency provides useful information on flood insurance on its Web site at FloodSmart.gov. A separate earthquake policy is
available from most insurance companies. The cost of the coverage will depend on the likelihood of earthquakes in your area. In
California the California Earthquake Authority (www.earthquakeauthority.com) provides this coverage.
If your homeowners insurance falls short, you could qualify for money from the Federal Emergency Management Agency (FEMA). You could also get a disaster-assistance loan from the Small Business
Administration (SBA). Homeowners can borrow up to $200,000 for rebuilding and $40,000 to replace personal property at very low interest rates for up to 30 years.
If you have questions about insurance for any of your possessions, be sure to ask your agent or company representative when you're shopping around for a policy. For example, if
you run a business out of your home, be sure to discuss coverage for that business. Most homeowners policies cover business equipment in the home, but only up to $2,500 and they offer no business liability
insurance. Although you want to lower your homeowners insurance cost, you also want to make certain you have all the coverage you need.
|
