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IN
THE WAKE OF THE STORM: Following the
stress of watching a disastrous weather system move across your area, filing
an insurance claim for damage caused by the storm can be challenging and
emotionally draining. In the wake of Superstorm Sandy, here are five
important reminders about your insurance policies from the National
Association of Insurance Commissioners (NAIC) that will help you navigate the
immediate situation. |
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1. Key
Coverages to Know Flood
Insurance:
Flooding—or an excess of water (or mud) on normally dry land—is not covered
by a typical homeowners or renter’s insurance policy. Consumers who have purchased
a flood policy from the National Flood Insurance Program (NFIP) should
contact the insurance agent or company that wrote their policy to begin the
claims process.
Sewer
Backup Coverage: Ask your insurance agent or carrier if an endorsement
for sewer backup coverage was added to your homeowner’s policy. If so, your
losses may be covered if the water damage was caused by sewer lines backing
up through your home’s drain pipes. Loss
of Use Coverage: If your loss was caused by a covered peril and the
home is not fit to live in, you may be entitled to additional living expenses
to maintain your normal standard of living. Debris
Removal:
Most policies do not cover damage to trees or landscaping, but many policies
have debris clean-up allowances. Check your policy and talk with your agent
to see if your policy has this coverage. Coverage
for Other Structures: Damage to structures other than your house
may be covered if connected to your house by a fence or utility line and the
loss was caused by a covered peril, such as wind. Deductible: Your deductible is
the amount of the damage that you are responsible to pay. This amount could
be different following a hurricane than it would be following another covered
loss. If the cause of the loss is a named storm, it is likely you will be
responsible for a percentage of the loss, based on the replacement cost. This
percentage should be stated on your homeowners or renter’s declarations page.
State laws differ on what designations trigger a hurricane deductible. If you
question the deductible amount your insurance company expects you to pay,
talk with your state insurance department. Business
Interruption Coverage: It could be days before businesses in the
most heavily affected areas can open again. Business interruption insurance
covers lost earnings due to circumstances stated in your policy—such as fire
or hail—that shut down your business for an extended period. Business
interruption/continuation insurance covers expenses associated with running
your business, like your payroll and utility bills, based on your company’s
financial records. Business interruption/continuation may also help pay for
the extra expenses to keep your business in operation until you recover. This
coverage generally includes a waiting period that serves as the deductible. You may
have several different policies that cover all of the damages from the storm
(a flood policy, a homeowners policy, an auto policy that may cover damage to
your car from flooding), and it is likely you will have to file separate
claims for each loss. 2. Protecting Your
Damaged Property If your
home has damage, once it is safe, it is your responsibility to make sure that
the damage is not made worse because you did not take action. That means if
you have a part of your roof missing, it is your responsibility to make the
effort to cover the hole. As part of your claim, your insurance company will
typically reimburse the expense of these temporary repairs—assuming the loss
was caused by a covered peril—so keep all of your receipts. Before making any
repairs, take photos of the damage. If you remove personal property from the
home, do not dispose of it until an adjuster from your insurance company has
reviewed it for your claim. Many policies include reimbursement for storage
costs. 3. Contacting Your
Insurance Company or Agent If your
area has storm damage, it is likely your local agent is dealing with the same
issues. You should have a copy of your policy or insurance card with your
disaster preparation materials, but if you do not, an insurance company
representative should be able to help you find this information. Often
insurance companies will mobilize disaster response teams to come to you
following large-scale disasters. A disaster response team that comes to your
area can help you figure out what damages are covered, can start your
insurance claim and will often cut you a check toward that claim to help you
start the recovery process. Your state insurance department will also help you
find contact information for your insurance company following a widespread
disaster. They can also help answer questions about your coverage or assist if
you are having problems with your claim. 4. Power Outage There are
a couple things to know if you lose power. First, if a fallen tree is to
blame for the power outage, it is possible that the cost to clean up the tree
may be covered by your homeowners insurance. Additionally, you may have heard
that the stockpile of food going bad in your refrigerator or freezer is
covered by your insurance. It is true that a homeowners or renter’s policy
does often allow for compensation for food losses up to a certain amount.
However, this is generally a fairly low dollar value like $500.00. If your
deductible (the amount of the claim you are responsible to pay) is equal to
or greater than this, unless you have other losses, you probably cannot claim
just the loss of the food. 5. Home Inventory When you
file a claim you will be asked to make a list of everything damaged or
destroyed. This process can be easier with a good home inventory. If you do
not have a home inventory, sit down as a family and make the list room by
room. If you forget something in your initial list, you can add to it at a
later date. As you
purchase new belongings, either update your home inventory if you already
have one, or start an inventory. You can download the free NAIC myHOME
Scr.APP.book app for iPhone®
or Android
smart phones to get you started. The app guides you through
capturing images, descriptions, bar codes and serial numbers, and storing
them electronically for safekeeping. The app even creates a back-up file for
e-mail sharing. If you would rather do it by hand, you can download a home
inventory spreadsheet here for
help getting started. Once you have completed the home inventory, talk with
your agent to make sure your homeowners or renter's policy is adequate to
cover your new investments. More
Information Your state
insurance department is available to help with any problems you have
following a disaster. The NAIC can connect you to your state department by
calling 1-866-470-6242 or by going here. You can
also find more information about what to expect when filing a claim following
a disaster here. For more
information about the National Flood Insurance Program, including guidance on
filing a claim, go to http://www.floodsmart.gov/floodsmart/. October 2012 |
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About
the NAIC
The National Association
of Insurance Commissioners (NAIC) is the U.S. standard-setting and
regulatory support organization created and governed by the chief insurance
regulators from the 50 states, the District of Columbia and five U.S.
territories. Through the NAIC, state insurance regulators establish standards
and best practices, conduct peer review, and coordinate their regulatory
oversight. NAIC staff supports these efforts and represents the collective
views of state regulators domestically and internationally. NAIC members,
together with the central resources of the NAIC, form the national system of
state-based insurance regulation in the U.S. For
consumer information, visit insureUonline.org. |
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