Things You Should Know

Insurance companies have armies of full-time lobbyists, public relations people, lawyers and adjusters.  They are in complete control of the policies they write and provide to the public.  These policies are constantly revised to exclude coverage, not add it.  Many state laws favor insurance companies.  Often, amounts owed by the insurance company to their insureds are delayed or denied for reasons which are not made clear.  Nothing is more disruptive than losing your home or suffering a large loss which is not assessed and compensated promptly and adequately.  Policyholders generally do not know the rules which apply to insurance or the actual coverage provided by their policy.  Despite statements to the contrary by some “experts,” individual policyholders DO have rights.  When you have a hazard loss from a tornado, windstorm, or fire, you may need expert help. You may also find the following useful to protect your rights:

  • REPORT LOSS – Immediately report your loss to your insurance company.
  • IMMEDIATE NEEDS Take care of your family’s immediate needs first.
  • TEMPORARY HOUSING Finding temporary housing is a priority. Your insurance company should help you find a place of similar size.  Most policies provide for alternative living expense payments for comparable relocation if your residence is uninhabitable.
  • PHOTOS – Take photos of your property before any cleanup is done.
  • RED CROSSIn severe damage and dire financial situations, register with a Red Cross Case Manager – they can help make referrals to resources you may need.
  • CLEAN UP – Your insurance carrier will suggest, or provide, a clean-up or remediation company, such as ServPro, Paul Davis . . . etc. Make sure that the insurance carrier agrees to pay them directly, and does not ask you to pay them.
  • KEEP NOTES: Keep notes about what the remediation people tell you.  Many times they recommend a more thorough approach to fixing the problems. This is especially true where your residence has water damage.  Many insurance companies try to limit the remediation scope to artificial limits.
  • INVENTORY – We advise our clients and friends to prepare a home inventory video or photograph the inside of your house, including furniture, closets, and every room. Do this before you have a loss.  You can even prepare a written inventory. Keep a copy of this in a separate location, such as a work office.  If you have a hazard loss you have proof of your structure and contents and this will greatly simplify resolving your claim.
  • INVENTORY AFTER LOSS – Ask for an inventory (contents) worksheet. Go room to room and list damaged/or destroyed items. You will be asked to provide them and date them.  Good sources are the internet and actual store prices to replace these items. Do not be in a hurry to finish your contents list.  This should be a work in progress.  On large losses, consider hiring a contents expert to help you.
  • STORAGE COSTSIf you have a lot of structure damage and need to store undamaged furniture elsewhere, you should demand that your carrier pay for storage costs.
  • SIGNING – Do not rush into signing any repair contracts, especially with a contractor recommended by the insurance company. Get a contractor estimate from your own contractor. Get copies of ALL paperwork you do sign.
  • CASH ADVANCESTalk with your insurance adjusters regarding cash advances for living expenses and replacing personal property. It is customary to obtain cash payments up front for food, replacement clothing and necessary expenditures.
  • COPY OF INSURANCE POLICY – Request a complete and current copy of your insurance policy. Make a “working copy” of your policy and circle all dollar amounts and additional coverage amounts.
  • JOURNALStart a claim journal and take notes on: who you talked to, the number you called, date and time, what was said. Keep all of your paperwork organized and together.
  • RECEIPTS Keep all receipts which you are displaced. Hotel bills, clothes and pet boarding may be reimbursed by your insurance.
  • OTHER STRUCTURES – Your policy will have separate coverage for “other structures” which will apply to any structures not connected to the house, like garages or storage facilities.
  • APPRAISAL – Each policy has an “appraisal” provision in it. It may be advantageous to you to invoke that provision. However, do not do so without seeking the advice of a qualified appraiser.  This is not the same as a real estate appraiser.  This is a loss appraiser.  A qualified appraiser should be hired to provide an independent estimate for insureds.  You do not have to accept the estimate made by the insurance company adjuster. It is often too low, and sometimes unreasonably low.  Our offices can provide you with the names of qualified appraisers.
  • REPLACEMENT COST POLICIESMost homeowners’ policies are replacement cost policies. That means the cost of replacing the damaged structure or contents should control.
  • READ – Read your policy provisions about “Duties after loss.” Cooperate with the insurance adjusters in making the premises available for inspection and provide documentation of your losses. Do not take any actions that further damage your property.
  • DELAYSDo not allow habitual delays in resolving your claim. Most claim investigations and payments should be resolved in 60 – 90 days.
  • LEGAL ADVICE – If you are being mistreated, seek legal advice. Homeowners’ claims are not simple. They are controlled by your insurance contract and Alabama law.
  • CANCELLATION OF COVERAGE – If you have a large loss, your insurance company may cancel you. That does not affect your claim. The coverage in effect at the time of the loss controls.

Use this information to assist you if you have a property disaster loss. If you cannot get the response, help or compensation you believe you are entitled to under the circumstances, call us at 256-705-7777. Our attorneys have handled thousands of cases in Alabama and Tennessee state and federal courts. We offer more than 100 years of combined experience in litigating insurance claims. We share lessons learned and provide tools to help policyholders.  We do not represent insurance companies.

Tornadoes, Wind Storms or Fire Losses: What You Should Know