Surviving a natural disaster that destroys your home leaves you feeling scared, frustrated, disheartened, and with many questions. You might be feeling alone, even if your neighbors are facing a similar situation following a hurricane, wildfire or other major event.
Understanding your role in filing an insurance claim after a major disaster, along with the steps that take place after you file, can help you feel more in control.
Knowing what to do can also reduce the odds of a denied claim. And when you know what the insurance company should be doing at any given time, you can identify if they’ve made a mistake that could lead to delays or denials too.
Knowledge and education creates the power to get your home repaired or rebuilt on an acceptable timeline without destroying your finances.
The Timeline for National Disaster Recovery and Home Rebuilding
Widespread recovery after a natural disaster can take years. Following Hurricane Katrina in 2005, some neighborhoods in the city of New Orleans took eight to 11 years to rebuild.
Fortunately, rebuilding individual houses typically has a shorter timeline, although it can feel like decades if you’re displaced and waiting for your home to be repaired or rebuilt.
If you’ve suffered a catastrophic home loss, it could take one to two years to fully rebuild.
Let’s look at the insurance claim and rebuilding process, step-by-step, so you’ll know what to expect from the moments following the disaster until the time you can move into your newly rebuilt home.
Step 1: Assess the damage.
Once the disaster has passed, you’ll want to assess the damage to your home. Don’t enter the structure if it seems unsteady or unsafe.
If it’s safe to enter the property, take photos and video of all the damage. You might also want to make written notes or narrate a video as you walk through the property. It may be hard to remember all the details when you’re under the stress of seeing your home destroyed. Photos, videos, and notes will help when you file a claim.
For safety:
- Check for structural damage.
- Turn off electrical and water systems before entering the home.
- Don’t use gas appliances until they’ve been inspected.
Step 2: Take inventory.
Take inventory of all your belongings. Don’t move anything until you’ve taken photos. Then, sort damaged personal property from anything that was left untouched by the disaster.
Label everything according to the room it belongs in. Take photos before you move your personal property to a safe location.
Step 3: Call your insurance company or file a claim online.
Once you’ve assessed the damage to your home and personal property, it’s time to file a claim. During a stressful situation like a major disaster, you might prefer to speak to a phone representative. But it may be easier and quicker to file a claim online, especially since the insurance company is probably fielding a lot of claims calls in your area.
Step 4: Determine areas that may need emergency repairs to prevent further damage.
FEMA recommends starting clean-up after a major disaster as soon as you’ve recorded the damage. There’s no need to wait for an inspection to start protecting your home from further damage or mold growth.
For instance, you might use tarps to cover holes in the roof to prevent additional water damage, board up windows and doors, or remove tree limbs still in danger of falling on the home.
If you can’t safely access the property or can’t make any emergency repairs yourself, call professionals to help. Make sure to save receipts so you can include this work in your insurance claim.
Step 5: Get estimates.
If your home is not a total loss, get estimates from licensed contractors to determine repair costs. The contractors should specify the materials they will use and an itemized price list for all repairs to submit to the insurance company.
Step 6: Fill out proof-of-loss form.
A proof-of-loss form is a notarized legal document that details the specific dollar amount in damages you are claiming. With all the information, videos, and estimates you’ve compiled, you should be able to fill out the proof-of-loss form detailing all the damage. If your home is uninhabitable, include receipts for alternate housing and food.
Step 7: Wait for the insurance adjuster’s visit.
Sometimes, the insurance adjuster will visit before you file the proof-of-loss form. In either case, you should have all the information for the proof-of-loss form available to expedite your claims process. Those details will also help when you walk through the property with the adjuster. Make sure to point out any specific damage.
The insurance adjuster is professionally trained to assess the damage to your home following a disaster. They may work for the insurance company or be hired by the insurance company from an outside firm.
You might have the option to hire a public adjuster who will provide an estimate independent of the insurance company’s estimate. You’ll pay a fee for a public adjuster. If you hire a public adjuster, the insurance company will likely send their own adjuster, as well.
Step 8: Receive your settlement offer.
The time between filing your claim and receiving a settlement offer can be several weeks or even months. Your settlement offer will be the cost to repair the damage or rebuild the home minus the amount of your deductible. At this point, you can accept the offer or dispute it.
If the insurance company denies any portion of your claim or significantly reduces your estimated repair costs, you can call the adjuster to renegotiate. You can also hire a lawyer to advocate on your behalf.
Step 9: Accept your settlement offer.
Once the insurance company has made an offer you’re happy with, you can accept the offer. Don’t sign a release of all claims form, though. That closes your claim permanently.
Until you release all claims, you can submit a supplemental claim if contractors find additional damage or repair costs end up being higher than the initial estimate.
Step 10: Begin receiving payments.
Many homeowners receive the first portion of their settlement within one to two months after accepting the offer, although it could take more or less time. Settlements rarely come in one lump sum.
Insured homeowners typically receive payments in this order:
- Additional living expenses (ALE, or payments to cover a place to live and additional costs created by your temporary living arrangements)
- Money to replace personal property
- Payments for repairs or construction
Step 11: Decide what personal items you want to replace.
Your insurance company first pays you actual cash value for personal property you declared as damaged. Then, it will issue another payment for replacement value after you submit the receipts for items you decided to replace.
Step 12: Work with your mortgage lender to get repair funds released.
If you have a mortgage on your home, your lender is listed as an additional insured. All checks for repairs or rebuilding will be made payable to the homeowner and the lender. That’s because mortgage lenders have a stake in making sure the home is rebuilt or the mortgage debt is paid in full.
Your lender might:
- Pay the contractor directly
- Release funds in stages throughout the project
- Want to inspect the completed work before releasing the balance of the funds
If your home has been destroyed, a portion of the funds may be used to pay off the mortgage, with the rest available for you to rebuild or buy a new home.
Step 13: File a supplemental claim if needed.
If repair costs exceeded your settlement or contractors found additional damage, you may need to file a supplemental claim. This may need to be filed within one year of the first claim.
Step 14: Close the claim.
When you’re sure that all the work has been completed to specifications and your contractors have been paid, you can officially close the claim.
Step 15: Relax in your new home.
Filing a claim after a major disaster, and then living through the tedious rebuilding process, can cause intense stress, even leading to anxiety, depression, and post-traumatic stress disorder.
When you’ve emerged at the other side of the disaster with a home you love, it’s time to relax in your new, cozy environment.
But don’t feel guilty if you don’t feel as happy or relieved as you think you should. Seek professional help if you don’t start feeling better over time, now that this chapter of your life has been resolved.
When you are hit with a disaster and your home and personal belongings are damaged or destroyed, it can be devastating as well as stressful. The insurance claim process can seem daunting, but if you tackle it in a methodical way and follow the steps outlined above, you can insure you get the maximum relief from your insurance company. A key takeaway is that you can negotiate their settlement offer until you are satisfied.
The information provided on this website is for general informational and educational purposes only and should not be considered legal, financial, or insurance advice. While we strive to keep content accurate and up to date, insurance laws, policies, and regulations can vary by state and may change over time.
Nothing on this site constitutes professional advice or a recommendation of any specific insurance product, provider, or strategy. You should consult with a licensed insurance agent, financial advisor, or legal professional regarding your individual situation before making any decisions.
Sources:
https://usafacts.org/answers/how-many-disasters-are-declared-in-the-us/country/united-states
https://pmc.ncbi.nlm.nih.gov/articles/PMC4752119
https://www.tect.com/feeds/blog/rebuilding-house-fire
https://www.iii.org/article/settling-insurance-claims-after-a-disaster
https://www.fema.gov/fact-sheet/dont-wait-clean-or-make-repairs-1
https://content.naic.org/sites/default/files/publication-post-disaster-claims-guide.pdf
https://www.iii.org/article/understanding-the-insurance-claims-payment-process
