Filing a Homeowners Insurance Claim? This is the process
We pay for homeowners insurance so that in the case of a disaster, we are covered for a full replacement. Now the way our policies are designed are different from person to person, so it is important to understand the design of your policy so that if a disaster does occur you know your and the insurance companies responsibility to see that the claim is handled appropriately.
Reformation General Contracting can help you with your insurance claim at any point in the process; from the very beginning we can provide you with the insurance company disaster team contact information to start the claim process, meet with the insurance adjuster, review provided scope of work or do the job upon approved scope of work. Below we will explain the process of filing a claim from the very beginning and seeing it all the way through.
Insurance Claims Process
1 Is there damage?
Some damage is obvious while others not so much. If you believe you have damage call the insurance company or Reformation GC for a free assessment of your property. If the situation is urgent and immediate protection needs to take place, we can tarp the vulnerable areas to prevent further damage. This is a cost the insurance company will pay for.
2 Filing a claim
When you call in to file a claim, you will not be working with your agent. They actually have no involvement in the claim process. My best advice is to search the name of your insurance company followed by “claims department.” Call the phone number provided.
Once you are speaking to the appropriate person, you will need to provide the following information.
Date in which the damage occurred
What caused the damage
The damage you see or you think you might have
The insurance company then will develop your claim based on your explanation and then assign you a claim number.
3 Claim number
A claim number is the single most important number given to you. This number identifies you, your policy & any information related to this particular incident/claim. Please have this claim number available whenever you speak to the insurance company and on your initial visit with Reformation GC.
4 Inspection
So now we have to document all of the damage and then build a “scope of work” or “inspection report” describing what damages that need to be repaired. Your Reformation GC representative will do a full walkthrough the inside and outside of your property with camera and notes in hand to document their findings. This is also what the insurance company is supposed to do.
Now the goal is for a Reformation GC employee to be present when your insurance adjuster is at the property so that we can all be on the same page from the get go.
Throughout the process, your Reformation GC representative will need to be in touch with you insurance adjuster/company to make sure all documentation is provided in an efficient manner. You will need to collect and provide your Reformation GC representative the adjusters name, phone number and email address.
5 Scope of Work
Now the insurance company is the one responsible for developing your scope of work. They will prepare this document with or without a contractor involved. This will be a packet either given to you, mailed to you or emailed to you by the insurance adjuster. This document will detail every item to be repaired and the cost(s) to repair. You and your Reformation GC representative will need a copy of this scope of work for review. If there are no discrepancies then you are good to go. If there are items missing from the scope of work, your adjuster/insurance company must be contacted by either you or your Reformation GC representative with the items or missing items in question.
6 Money
Policies differ from person to person, so the following information might not apply to you exactly. 95% of our customers will be handled in this fashion.
On your scope of work from the insurance company you will see the acronym ACV (Actual Cash Value). This number is the value of your materials today. Below is how the this number is developed
MATERIAL VALUE - AGE OF MATERIAL = ACV (ACTUAL CASH VALUE)
The SUM of all the items listed under the ACV column will add up to be the value of the FIRST CHECK that you will receive from the insurance company. This is money to get you started. Deposit this check into your bank account.
On your scope of work you will see the acronym RCV (Replacement Cost Value). This number represents the total amount of money the insurance company is going to pay towards your claim. This is the price Reformation GC will do the work for. (We work at the prices on the insurance scope of work as long as all items are accounted for).
Once the work is complete you will receive a second check. Here is how the value of that check is determined:
(RCV - ACV) - DEDUCTIBLE = SECOND CHECK (RECOVERABLE DEPRECIATION)
The second check (recoverable depreciation) will be sent to you once Reformation GC has completed the work and has submitted a Certificate of Completion to your insurance company. Deposit this check into your bank account.
7 Money (if you have a Mortgage)
If you have a mortgage on the property there is a chance that the insurance company will write the check to you and your mortgage company. If this is the case for you, immediately send this check to your mortgage company for sign off.
Depending on the mortgage company, this can be a quick process or a slow one. Some mortgages require certain bits of information about the claim or the contractor before they release any of this money back to you. You will need to contact your mortgage company and ask them what it is you need to do in order to get the check signed off quickly.
If you need any help with the engagement of your mortgage company your Reformation GC representative can assist. In most cases you will need to provide your account number and mortgage number for any discussions to take place.
Once these checks have been signed off by your mortgage company, immediately deposit into your bank account.
8 Paying Reformation GC
Once the scope of work is in a pretty solid state the work can now be scheduled. In insurance situations due to storms, we are generally taking care of a lot of properties, so we like to collect a portion of the money upfront so that we can at least cover the cost(s) of each trade we are restoring. Once the job is completed, we will collect the rest of the money upon your satisfaction of the work completed.
A few other things to know or consider…
Supplements
A supplement is required when you run into additional damage that was overlooked on the original assessment. Photos of these issues will be documented and submitted to you and the insurance company/adjuster along with an estimate for repair for you/them to review and approve.
Overhead & Profit
Contractor expenses, often referred to as Overhead and Profit (O&P) is intended to cover the general contractor's overhead and operating costs, as well as profit. It is typically estimated at 20% of the total amount of the contractor's own rebuild or renovation estimate. If necessary, Reformation GC would supplement the insurance company for this as a service and cost of doing business.
LOCAL BUILDING CODE
Your state/city has building codes in place that need to be considered before construction begins. If the current state of your home is not in accordance to your local building code, materials must change to fall in line. In most cases, the insurance company will pay for this material change, but in some cases they won’t. All the necessary documentation will be provided to you and the insurance company as a supplement calling out any of these questionable items.