Mississippi Road Map to Recovery
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If your home or business has been hit by a hurricane, tornado or other disaster and you have insurance, you're fortunate. Insurance companies have the funds to cover the claims that will be filed. But you need to learn some basic hard facts about large and total loss insurance claims and how insurance companies operate in today's world.
As you begin to pick up the pieces and get on the road to recovery, insurance is supposed to be the vehicle to get you back home. As long as you're thinking of your insurance policy as a car to drive you where you need to go - remember this - it's not going to drive itself. You need to drive it. You paid for it. You've got the most at stake in making sure it gets you where you need to go. So now is the time to get a basic understanding of how your insurance policy is supposed to work for you, what problems you may encounter during the claim process, and what resources there are for getting help when you need it. We know insurance policies aren't really cars - they're contracts, and confusing ones at that. Let's get started.
First the good news:
- You're not alone
- Help is available
- You will get through the recovery process
- Some insurers and adjusters treat their customers better than others by paying what they owe reasonably promptly
- Getting up to speed on some basic facts about the process of filing and getting paid on a large insurance claim, you'll significantly increase your odds of getting a fair and prompt settlement
Now some not so good news:
- Large and total loss claims usually take more than a full year to get fully and fairly paid. Pace yourself. This is a marathon, not a sprint.
- Insurance companies are profit-oriented businesses - not charities or "good neighbors". Don't confuse the ads they use to sell their products with reality. When it comes to dollars flowing back from them to you - it's all about documentation, organization and negotiation.
- Some insurers an adjusters will try to rush folks into fast settlements and close claims quickly without paying in full.
- There will be a lot of misinformation floating around about what's covered and what's not, and how much it should cost to repair damage.
And here's our news:
To get paid fully and reasonably promptly for your insurance claims, you need to:
Report a claim even if you think it may not be covered
It's your property and your stuff. You paid for coverage and good claim service. If you're not getting it, be prepared to stand up for yourself. Knowledge leads to money. Keep in touch with neighbors who are going through what you're going through and trade information.
Get Organized
The better you document your losses and stay organized in dealing with your insurance claim, the smoother the process will go. Get a 3 ring binder and make a CLAIM DIARY. Take and keep detailed notes of all conversations with insurance company representatives and contractors, record their names, phone numbers, job titles and supervisor's names. Confirm agreements, disputes and deadlines in writing via letter, fax or email. Print out and keep copies of emails. Keep all receipts for temporary housing and items you replace and submit them to your insurer for reimbursement.
Get Help When you Need it
If you're overwhelmed and need professional help, get it.
Most people know nothing about insurance other than the ads they've seen, the premium bills they've paid and perhaps a "fender bender" or plumbing leak claim that got settled with no problems.
If you've lost everything and you've paid for insurance protection — get smart. Insurers are in the business of making money and just because their ads make them look like your friendly neighbors — they're not. That doesn't mean they're evil or to be feared — it just means you cannot sit back and trust them to take care of you if you want a fair shake. You need to do the work of documenting what you lost and how much its really going to cost to replace it — all of it, stand up for what you're entitled to, and get help when you need it.
Most disaster survivors end up knowing more about insurance than they'd ever wanted to know and they'll tell you: knowledge leads to money. The more you know about the insurance claim process, your rights and your options for getting help — the more your insurance policy is going to pay what it should.
Our goal is to offer the insurance advice that thousands of disaster survivors have found most useful over the past fourteen years on their road to recovery. Our organization is made up of professionals and volunteers with many years of personal experience, expertise and first-hand knowledge.
We welcome feedback and e-mail at info@unitedpolicyholders.org .
Start by reading our Basic Tips below. Our Dwelling Tips will help you settle the part of your claim that covers repairs and reconstruction of your home. Our Contents/Personal Property Tips will help you settle the part of your claim that covers replacement of the contents of your home.
BASIC TIPS
1. NOTIFY YOUR AGENT AND INSURANCE COMPANY PROMPTLY THAT YOUR HOME IS DAMAGED OR DESTROYED AND YOU ARE FILING A CLAIM
Even if you do not carry a separate "flood" policy, or are told your damage may not exceed your deductible, you should notify your agent/broker and carrier in writing that you have sustained a loss and are filing a claim. Your homeowners policy should cover wind-driven rain and other damage caused by the Hurricanes.
2. IF THE INSURANCE ADJUSTER TELLS YOU THE DAMAGE IS NOT COVERED OR DOES NOT EXCEED YOUR DEDUCTIBLE — GET AN INDEPENDENT OPINION
The adjuster sent by your insurance company to inspect your home may be new on the job. He or she may not know how to look for and identify all damage and may give you wrong information about what's covered and what's not. Do not blindly trust your adjuster, especially if he or she tells you no benefits are owed or that the damage did not exceed your deductible. Your home is simply too valuable for you to rely on one person's opinion.
The Mississippi Insurance Commissioner issued a special bulletin in early September ordering insurance companies not to make any coverage decisions before fully inspecting and stating that insurance companies must prove damage was not caused by winds before denying Katrina/Rita claims.
3. REVIEW YOUR POLICY CAREFULLY
Locate complete and up-to-date copies of all policies on your home, property and vehicles. Look closely at your "declarations" page. This page states your name, address, policy number, categories of coverage, dollar limits, endorsements, lender, etc. Make sure you have the most current, up-to-date copy. Read the "Endorsements" (extras) that apply to your policy. Every endorsement has a code number that matches text in the policy. If you are confused, do not rely solely on your insurance company or adjuster for answers. Consult with someone who specializes in advising or representing insurance consumers.
If you're having trouble getting a complete copy of your policies, contact the Mississippi Insurance Department at (800) 562-2957. If you tell them the name of your insurance company, they should help find an adjuster to service your claim.
4. COVERAGE BASICS
Many homeowners' policies have a provision that increases your coverage above the limits stated on the declarations page under certain conditions. These are called "extended replacement" or "guaranteed replacement" clauses. The FEMA flood policy does not have this provision. Your limits will be as stated on the declaration page, plus any applicable adjustment percentages. Do your own math. If you don't have the coverage you were promised or that you need, you're "underinsured".It may be the fault of an agent who advised you against buying flood coverage or you may have refused an agent's recommendation. In any case, if you're very underinsured you need to get educated on your options.
5. DO NOT BE PRESSURED INTO A QUICK SETTLEMENT AND DO NOT SUBMIT A CLAIM FORM THAT SAYS "FINAL" OR "FULL" UNTIL YOU ARE SURE YOU UNDERSTAND YOUR RIGHTS, YOUR COVERAGE, AND THE FULL EXTENT OF YOUR CLAIM.
Your adjuster may try to rush you into a fast settlement. Unlike other forms of coverage, your insurance company may farm out all policy services regarding flood coverage to companies that do not even specialize in insurance. The person actually adjusting or deciding your claim may not be trained or even knowledgeable about flood coverage. He or she may tell you that damage pre-existed the flood. Don't be railroaded. Documenting a major loss to ensure a full, fair recovery requires work. Before you know the true amount of your insurance claim, you must get estimates from reputable contractors, and inventory all lost or damaged possessions. This takes time. A licensed structural engineer should fully inspect and tell you the scope of necessary repairs so you can have a reputable contractor provide an estimate based on that scope.
IMPORTANT: Because water damage impacts hidden areas, mold, mildew, and fungus may grow inside the house. Some of these can be extremely dangerous. Your insurer owes for proper clean up and generally for "abatement" of hazardous materials. ou should monitor your house by having a licensed environmental hygienist test the air inside your home.
6. BE AN INFORMED, ASSERTIVE CLAIMANT
Organize all papers related to your claim. A three ring binder with folders is generally the best system. Keep a CLAIM DIARY . Record the names, phone numbers, job titles, and supervisor's names of everyone you speak with, and keep detailed notes of all pertinent conversations. Take photos of the damage and keep copies in a safe place.
Communicate with your neighbors, find those insured with your insurance company and meet with them regularly to share information and ideas on securing a fair settlement. There is power in numbers.
If your adjuster is uncooperative, complain in writing to your adjuster's superiors, then to the Mississippi Insurance Department. If you feel your claim is not being handled fairly, contact a qualified attorney or public adjuster who specializes in representing policyholders.
Mississippi Insurance Dept. 1(800) 562-2957 consumer@mid.state.ms.us
Mississippi Trial Lawyers Association: 1 (601) 948-8631 www.mstla.com/ms/
National Assoc. of Public Insurance Adjusters 1 (703) 433-9217, info@napia.com
www.msbillofrights.com A site run by Mississippi resident Kevin Buckel who has organized thousands of citizens to protest unfair practices by insurance companies. Mr. Buckel is working with United Policyholders to establish better protections for policyholders in his home state.
7. BE SURE YOU ARE FULLY COMPENSATED FOR YOUR "ADDITIONAL/TEMPORARY LIVING EXPENSES" (ALE), EMERGENCY REPAIRS AND PURCHASES TO REPLACE ITEMS
Keep all receipts for meals, lodging, and purchases to replace damaged items from the time you must vacate your home until it is fully repaired. Policies vary on how long this coverage lasts and how much you can recover.
If temporary housing is in short supply, negotiate with your insurance company to "cash out" your ALE limits and use them to buy a trailer or mobile home to live in during repairs/reconstruction. Having the ALE portion of your claim settled can save paperwork and time. You can sell the trailer or mobile home once your home is complete.
8. INSIST ON "LIKE KIND AND QUALITY" REPAIRS, DON'T ACCEPT "LOWBALL" ESTIMATES, SUB-STANDARD WORKMANSHIP OR NON- MATCHING ITEMS
Insurance companies may pressure you to accept their contractors' cut-rate repair estimates or short-cut repair methods. Materials costs will go up after a disaster, that's just the way of the world. Most people's homes are their biggest asset so hold out to find the right repair professional and get the right amount from your insurance company to pay for getting the job done right.
If the adjuster tells you there is no damage inside walls or flooring — get a second opinion. Push for the best inspection methods on your engineer's recommendation. Don't settle for limited testing. (For example, inspecting walls by drilling holes in them is not as good as actually tearing off the sections of the wall in areas with suspected damaged).
If you have only a partial loss and your adjuster tells you the insurer won't pay to match paint colors or carpeting, argue back. You're entitled to like kind and quality and a uniform and consistent appearance. If you didn't have two color walls or carpets before the storm — you don't have to settle for them after.
9. INSIST THAT YOUR CLAIM BE SETTLED FOR THE AMOUNT OF A REASONABLE CONTRACTOR'S ESTIMATE. YOU DO NOT HAVE TO ACCEPT THE INSURANCE COMPANY'S CONTRACTOR OR COMPUTER- GENERATED ESTIMATES
Check with your local Building Department and use word of mouth to find reputable contractors who have experience repairing severe storm damage and doing total rebuilds. Local contractors will be in high demand and short supply. Before you hire a contractor, check their references and their standing with the Mississippi State Board of Contractors at (800) 880-6161 or www.msboc.com. If a contractor says his work is bonded, verify that by asking to see a copy of his policy.
- Be skeptical of "lowball" estimates from insurance company adjusters and contractors with whom they have relationships.
- Avoid out-of-state, inexperienced or unreliable contractors without proper insurance of their own.
- If the flood made pre-existing damage worse, you're covered for the necessary repairs.
- Some flood repairs are expensive, especially hidden damage in walls and floors. Wet and mildewed areas can be potentially hazardous.
- Monitor your air after any flood, especially if you smell mold, mildew, or musky odors. You may have to fight to get the full amount of policy benefits you paid for.
- Don't be penny-wise and pound-foolish by refusing to pay experts to advise you on causation, damage and repair costs. They will help you prove your claim.
10. NEGOTIATE WITH THE INSURER ON HOW THEY DEPRECIATE ITEMS AND SUBMIT RECEIPTS TO COLLECT FULL REPLACEMENT VALUE
Depreciation amounts are subjective and very negotiable. Insurers may use an IRS depreciation schedule or their own schedule. It's often hard to pin down an adjuster on their depreciation math. Ask your insurer to provide you with a copy of the depreciation schedule they use. Be prepared to fight to get the full amounts you're entitled to, particularly on major items, and don't forget to submit receipts and collect the balance owed after you replace items.
11. DO NOT SIGN "RELEASES" OR WAIVERS OF ANY KIND OR ALLOW YOUR INSURER TO RECORD AN INTERVIEW WITH YOU WITHOUT CHECKING WITH AN ATTORNEY WHO HAS EXPERIENCE REPRESENTING INSURANCE CONSUMERS (POLICYHOLDERS)
Read all documents carefully, including both sides of all checks, to make sure they do not contain "final" or "release" language. You should not need to sign a "waiver" or "release" to get monies owed on your claim. Your insurer has the right to take your recorded or sworn statement if it has questions about your claim, but it makes sense for you to check with a lawyer. Signing a final proof of loss prematurely or making a mistake on tape may hurt your ability to fully recover the policy benefits you need to repair your home.
12. IF YOU DECIDE TO HIRE PROFESSIONAL HELP, CALL AT LEAST TWO FORMER CLIENT REFERENCES AND CHECK THEIR LICENSE, PROFESSIONAL STANDING AND INSURANCE
For more detailed tips on the pros and cons of hiring a public adjuster or attorney, please see UP Contents/Personal Property Claim Tips #12-17.
United Policyholders is a non-profit organization founded in 1991 and dedicated to educating the public on insurance issues and consumer rights. UP publishes educational materials and serves as a resource for individual and business policyholders and residents of communities with insurance problems. UP’s Amicus Project provides information to courts of law to support policyholders’ legal rights. UP unites policyholders and their advocates by sharing information. Write to UP at 110 Pacific Ave., PMB 262, San Francisco, CA. 94111, call us at (510) 763-9740, or visit our website at www.unitedpolicyholders.org.
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