Homeowners insurance was created to provide financial protection in case of damage or loss to your home or personal property. Many of us have it, and we know how to make our payments to maintain coverage. But unless you have experienced property damage, you likely do not know what happens when an insured property is damaged, beyond knowing that you will need to report it to the insurer if you hope to get the damages covered.
One of the first questions you may have after your property is damaged is how much you may be owed from your insurance. If that question isn’t on your mind immediately after you notice the damage, it will likely be on your mind as soon as you see a large estimate provided by the contractor. In the event of an incident, such as a hurricane, fire or a break-in, it’s important to know how to calculate what you are owed for a homeowners insurance claim. Here are the steps you can take to determine your compensation.
- Review your policy – The first step in calculating your homeowners insurance claim is to review your insurance policy. Make sure you understand what types of damage or loss are covered by your policy, as well as any exclusions or limitations. Check your coverage limits, deductibles, and the types of claims that are covered or excluded. Knowing the terms of your policy will help you understand what you can expect from your insurance company.
- Document the damage or loss – Before you start calculating your claim, it’s important to document the damage or loss. Take photographs or videos of the damage, and make a list of all the items that have been damaged or lost as a result. Include as much detail as possible, such as the date of purchase, the value, and the brand of each item.
- Estimate the cost of repairs or replacement – The next step is to estimate the cost of repairs or replacement. Get quotes from contractors, repair shops, or other professionals who can provide estimates for the cost of repairing or replacing the damaged items. If you have receipts or other documents that show the value of the items, provide those to your insurance company as well.
- Calculate your claim – To calculate your claim, subtract your deductible from the estimated cost of repairs or replacement. For example, if the cost of repairs is estimated to be $5,000 and your deductible is $1,000, your claim would be $4,000.
- Submit your claim – Once you’ve calculated your claim, submit it to your insurance company. Be sure to provide all the documentation you’ve gathered, including photographs, estimates, and lists of damaged items. Your insurance company will review your claim and determine whether it’s covered under your policy. If your claim is approved, your insurance company will provide you with compensation for the damages or losses you’ve incurred.
In summary, calculating what you are owed for a homeowners insurance claim requires understanding the terms of your policy, documenting the damage or loss, estimating the cost of repairs or replacement, calculating your claim, and submitting it to your insurance company. By following these steps, you can ensure that you receive the compensation you are entitled to in the event of a loss or damage to your home or personal property.
Below are some of the major questions that will need to be answered before you can fully determine what you may be owed for a property insurance claim:
- Is the damage caused by a covered peril during the policy period?
- What is the direct damage? Is there any collateral or consequential damage?
- What is the proper reconstruction method? What is the scope of repairs so the property is reconstructed to its pre-loss condition?
- What is the estimated cost of repairs, as determined by a licensed contractor?
- What was the cost to determine that scope?
By answering these important questions, you will begin to understand how much the insurance company owes you. If you are having a tough time dealing with your insurance company regarding a loss or claim, you should speak to a property damage attorney as soon as possible. They can take a look at your situation and let you know what options you may have after your insurance company denies, underpays, or unfairly delays paying your claim.
