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Top Mistakes Made by Policyholders Following a Property Loss
Suffering sudden and accidental property damage catches most homeowners off guard. And although the majority of homeowners have insurance for covered events, many are not familiar with the claims process and make costly mistakes.
According to the Insurance Information Institute, about one in 20 insured homes has a claim each year. It means that most homeowners might not have to file a claim for damages with their insurance company for many years and are unprepared to do so when the time comes.
Avner Gat, Inc. has many years of experience as a public adjuster in Los Angeles who covers Southern California. We are pleased to share with you the top mistakes made by policyholders following a property loss we come across – we hope it can help you avoid making costly homeowners insurance claim mistakes.
7 Mistakes Made by Homeowners After Suffering Property Damage
The top mistakes made by policyholders following a property loss include:
#1. Not Submitting a Proof of Loss Form on Time
A Proof of Loss form is typically a notarized, sworn statement detailing the losses you suffered and the amount you’re claiming after an insured event.
Most but not all insurance companies require this document within 60 or 90 days after the incident that led to your insurance claim. Some insurers might not automatically require it as part of the claims process but can request it at their discretion.
Failing to submit a Proof of Loss form when requested to do so might cause your insurance company to delay or deny your claim.
#2. Hiring a Storm Chaser
Finding and hiring the right contractor to repair damage to your home after a storm is often more difficult than it might seem, especially if several homes in your area suffered damage.
Overworked local contractors might be unable to assist you right away. It leaves the door open for dubious out-of-state contractors to offer their services to unsuspecting homeowners. In many cases, these contractors are nothing but scammers.
According to BBB Los Angeles and Silicon Valley:
“These scammers go house to house after a storm looking for work. They’re often not licensed or qualified to take on complex repair or replacement jobs. Any warranties given are typically worthless. By the time you try contacting them to get a resolution they’re long gone chasing the next storm.”
#3. Cleaning up Without Documenting the Damage
If your property sustains damage caused by a covered event, your insurance company appoints an insurance adjuster to inspect the damage and handle the claim. By cleaning up the damage before the insurance adjuster arrives, you might destroy evidence to support your claim.
If you want to clean up the mess before the insurance adjuster arrives (not recommended), always document the damage. Take photos, record a video, and compile an inventory of damaged items. If you have receipts for any lost or damaged items, save them – they can serve as proof that you possessed them.
#4. Not Reading Your Policy
Insurance policies can be confusing, but you should always familiarize yourself with what events are covered before filing a claim. Make sure to read the “exclusions” (or similar wording) section of your policy.
Submitting a claim without understanding what you’re covered for can be a waste of time, lead to disappointment and make an already unpleasant experience feel worse.
In addition, consider your deductible. If you only suffer a minor loss or negligible damage to your property, it might not be worth filing a claim.
#5. Waiting Too Long to File a Homeowners Insurance Claim
One of the biggest mistakes made by homeowners is waiting too long before filing an insurance claim.
The sooner you file an insurance claim, the sooner you can have the damage to your property repaired and replace your belongings.
Insurance companies typically require that the covered event that caused damage to your property or resulted in the loss of your possessions be sudden and accidental. By waiting too long before filing a claim, your delay might cause additional damage.
For example, a covered event such as wind and hail causes damage to your roof, resulting in a leaking roof. If you wait too long to file an insurance claim and get hit by another storm that causes further damage, your insurance company might repudiate your claim.
#6. Filing Insurance Claims Too Often
When you file a homeowners insurance claim, your insurance company typically reports it to LexisNexis® – they manage the Comprehensive Loss Underwriting Exchange (CLUE).
Even if nothing is paid out, you may be seen as high-risk if you file multiple claims. It might compromise your ability to secure lower premiums in the future from homeowners insurance providers.
Filing multiple small insurance claims might end up costing you more money than if you pay for it yourself.
Note: You can request your consumer disclosure report from LexisNexis® to verify the accuracy of your claims history.
#7. Poor Communication
One of the top mistakes made by policyholders following a property loss is poor communication. Homeowners are often not clear enough when describing damage to their property. It can result in delays during the claims process.
When dealing with a homeowners insurance claim, you need to accurately convey the nature and extent of the damage to your property and belongings. If you are not sure what information your insurer or the insurance adjuster appointed by them requires and when they need it, ask them. Don’t make assumptions.
That's a Wrap
Homeowners often don’t have the experience and expertise to deal with large or complicated property damage claims or negotiate a settlement agreement with an insurance adjuster. It might lead to them making costly mistakes.
By avoiding the top mistakes made by policyholders following a property loss covered in this article, you might avoid making the same mistakes. However, for large or complex claims, it is advisable to hire a licensed public adjuster who can look after your best interests.
Avner Gat, Inc. has 17+ years of experience as a Los Angeles area public adjuster. We protect homeowners from the games and fine print that insurance companies are known for.
Call us at (818) 917-5256 to find out how we can help you.