What To Do After A Loss

The first step is to call your insurance agent or company representative to file a claim. After a disaster, report the damage to your insurance company as soon as possible to begin the claim process. Most insurance companies have emergency hotlines or representatives who can assist you 24 hours a day, 7 days a week. For a list of insurance company phone numbers, refer to the Phone and Contact Directory at the back of this book. The following important information can be provided by your insurance company upon request:

  • A copy of the policy declarations page, which lists all of your policy limit information and coverage
  • A complete copy of your policy, which you should receive within 30 days after the request
  • The policy number and claim number
  • Scheduling a meeting with your claims adjuster
  • Policy deductibles

Working With Your Insurance Adjuster

No one knows your home or personal property better than you do. The more information, photos, or receipts you can provide your adjuster, the easier it will be for them to settle your claim. Here are a few tips to help you through the process.

  • Keep a record of all communications with your insurance company, noting the date, time, and subject of each phone call or face-to-face discussion, no matter how trivial it may seem. Be sure to write down the name, title, and phone number of each person you speak to. Carefully note everything that was said, so you can remember what was discussed
  • Use a three-ring binder as your documentation record book. Keep everything pertaining to your claim in this book, including copies of your correspondence, receipts for any additional living expenses, inventories, photos, estimates, business cards, invoices, permits, and other documents pertaining to your claim and the rebuilding process
  • In most cases, your insurance adjuster will provide you with a detailed estimate of the cost to repair your dwelling and an inventory list of your contents (personal property) based on the information you give the adjuster. In some cases the scope of the repairs may seem incomplete and/or the amount of money they initially offer for the repairs may seem too low. Securing two or three estimates from qualified restoration contractors or construction consultants will help provide you with a realistic estimate of the costs. A construction consultant typically is a general contractor who charges an hourly rate to create a complete scope of work or a supplemental scope of work that will reflect only those items that your adjuster may have missed or priced to low. The same holds true for the content inventory. If the inventory you have appears incomplete or items are priced too low, you may consider hiring a content inventory specialist to compile an inventory. A specialist will research current pricing and provide you with the necessary supporting documentation
  • Your insurer should advance you funds right away to cover expenses due to losing the use of your home. Because it takes time to calculate the total costs of repairing serious damage and replacing a destroyed home, insurance claims after a disaster can take up to two years to fully settle. So it is best not to rush into a settlement with your insurance company

What May Be Covered by Your Homeowners Policy

Dwelling Coverage

This coverage pays to repair or replace your house. Your insurance company should fully investigate all physical damage to your home, inside and outside, and you should fully cooperate with them in their investigation. Make sure the adjuster includes every item in their repair cost estimate. In the case of a "partial loss" where a home is not completely destroyed, a full investigation and estimate should include all impacted and potentially impacted areas- including crawl spaces, attics, inside wall cavities, or other concealed areas where hidden damages may be present. Repair/replacement estimates should include all elements of damage. Discuss all possible structural damage, whether or not it is visible, with your adjuster. Discuss exploratory demolition, such as the removal of drywall or floor coverings, to help expose any suspected areas of concealed damage. In some cases the adjuster may hire or recommend hiring a licensed engineer to inspect the property. Repair/replacement estimates should also include all "minor" or cosmetic elements of damage, such as damaged paint, small scratches or burns, soot, water stains, contamination by smoke, etc. Get written bids for the repairs from reliable, licensed, local contractors.

The bids should include details of the materials to be used and the scope of work with prices, listed on a line-by-line basis wherever possible. In cases where anyone in the home has health conditions that include sensitivity to smoke or airborne foreign matter, air quality should be tested.

Other Structures Coverage

This coverage pays to repair or replace structures that are not attached to your dwelling. This could include such structures as barns, detached garages, work sheds, gazebos, Jacuzzis, sidewalks, driveways, patios, retaining walls, and fences. Again your insurer will need to locate and identify all physical damage to these other structures, inside and outside, and make sure the adjuster includes every item in their repair cost estimate.

Personal Property Coverage

This coverage pays to repair or replace the contents of your home, such as furniture, clothing, decorations, jewelry, small appliances and so forth. In most cases, it will be your responsibility to make a detailed list of all damaged items. Ask your insurer if they will waive the inventory itemization or accept a room-by-room inventory to save you the time and effort of listing every single item. If they insist that you itemize every item, you will have to spend a substantial amount of time and energy preparing your personal property inventory. This can be a daunting task, but you will not receive full compensation for your losses unless you include each and every item.

United Policyholders also offers sample inventory forms completed by prior disaster survivors as well as software to help you remember and list what you had and lost. You will need to list brand names and model numbers, age, and other details as best you can. If possible, take photographs of each damaged item. List items such as clothing, sports equipment, tools, china, linens, toys, potted plants, outside furniture, holiday decorations, hobby materials, etc. Include any receipts, invoices, and photographs to establish the price and age of everything that was damaged. If your records were destroyed, you may have to work from memory. You may want to ask friends or family members if they have any photographs that may have been taken at your home during a family gathering or holiday. Try to create a mental picture of the contents in each room and then write a description of what was there. Re-creating the floor plan of the house may help you remember the contents. Also, looking through department store catalogs can jog your memory of what you may have had. After the inventory is complete, keep all damaged items until your adjuster approves of their disposal.

Additional Living Expenses Coverage

This coverage is sometimes referred to as "Loss of Use" coverage. It pays for the expenses you incur as a result of not being able to live in your home. It covers rent or hotel costs, the added cost of meals, laundry, and other necessities of daily living. If your property is not safe for occupancy or uninhabitable you will have to find alternative shelter. Keep receipts for all expenses associated with your relocation and submit them to the insurance adjuster. These extra costs may be covered as additional living expenses under the "loss-of-use" portion of your policy. But you must be able to account for all covered expenses through invoices and receipts. Any advance payments received will be counted toward the final claim settlement. The following is a list of items that may be considered additional living expenses: Meals paid for while in a hotel or during moving (above your normal costs), hotel or motel expenses, mileage, parking fees, childcare, abnormal telephone usage, pet boarding, added costs of transportation, laundry or dry cleaning, storage, and so forth. When considering a temporary residence, look for a home that is close to the standard and quality of living of your home. For example, if your home was a three bedroom and had a pool, gym, office, and an area for pets, your policy should provide for a home with similar amenities. Your insurance company may advance you money for these costs. Your insurer may offer to help you arrange a temporary rental at a discounted rate. Again, you will want to make sure you do not exhaust your coverage paying more for rent than needed to maintain your previous standard of living.

Debris Removal Coverage

This coverage pays a limited amount to remove debris from the disaster, including debris from demolition. If debris needs to be removed, this coverage will allow you to apply a certain percentage, usually about 2 percent to 5 percent of your dwelling coverage limit to pay for removal and disposal.

Landscaping Coverage

This coverage pays to replace lawns, trees and shrubs to a certain extent, but it does not typically cover the cost to stabilize the ground or remediate mud flows, soil erosion, and similar damages. The total limit for a loss under this coverage is generally 5 percent of the dwelling limit and may be provided as an additional amount of insurance. This coverage may have a sub-limit of $500 for loss to any one tree, or plant. Check the language in your policy for details on the coverage that applies.

Water Damage

Homeowners policies do not typically cover flood damage caused by rising water (rivers that over flow, tidal water, etc.) but may cover other kinds of water damage, from falling or wind-driven rain, a sudden pipe bursting or a toilet that overflows. Damage from rain coming through a hole in a roof or a broken window may be covered, if the hole was caused by strong winds or other covered peril listed in the policy. If there is water damage, check with your agent or adjuster to see if the damages are covered, and if they say it is not, visit the water damage claim help library before you give up on getting coverage.

Building Code Upgrade Coverage

This coverage pays for improvements to your damaged or destroyed home that must be made to comply with current building code requirements. Not all policies include Building Code Upgrade Coverage. If you do not have this coverage, upgrades will be an out-of-pocket expense. If you do have this coverage, ask your adjuster or agent if the coverage is in addition to your policy limit or if it is included as a portion of the dwelling limit.

Replacement Cost Coverage

Your policy may provide a form of "Replacement Cost Coverage." There are several variations of this type of coverage, but they typically include coverage as follows, depending on what type of policy you were sold.

Replacement Cost Coverage provides a fixed dollar amount of coverage to repair or replace damaged property with a product of like kind and quality without deducting for depreciation (the decrease in value of an item due to wear or age). A Replacement Cost policy may cover the full cost of replacing your property up to your policy's limits.

Extended Replacement Cost Coverage provides an additional amount of coverage above your stated policy limit. The additional amount is provided to account for increases in building costs due to inflation or the scarcity of building resources after a disaster.

Guaranteed Replacement Cost Coverage pays the full cost to repair or replace your home regardless of the policy limits.

Actual Cash Value Coverage

Your policy may provide "Actual Cash Value" coverage, which is defined generally as the fair market value of your property minus depreciation to account for age and wear and tear. For example, if your eight-year-old oven is destroyed, your policy would cover only a percentage of the cost of a new oven because the oven would be worth less than its original cost due to depreciation.

Non Recoverable Depreciation

Depending on the type of policy, there may be an issue called non-recoverable depreciation that can affect the amount you receive to rebuild or repair damages. The definition of depreciation is a decrease or loss in value, resulting from age, wear, or market conditions. For example, if the paint on your house is 5 years old, the house cannot be re-painted with 5-year-old paint. The adjuster will estimate the cost of new paint and deduct the difference based on the age and condition of the existing paint. Depreciation is determined by age against the life expectancy of a particular item. The amount or percentage of depreciation applied to any given item varies and your adjuster will calculate a percentage of depreciation to most of the personal property and dwelling repair elements of the claim, except labor. The amount of depreciation applied to any given item may be negotiable. Non-recoverable depreciation is not recoverable at any point in the claim and will affect the settlement amount. For example: Let's say you sustain a major fire loss to a rental home and the policy has a limit of $100,000 and the estimated damages are $150,000. Because of the age of the roofing, paint, and floor coverings, the adjuster will calculate depreciation of $10,000. That means even though you have a policy limit of $100,000, because of the non-recoverable depreciation, the $100,000 would be reduced to $90,000.

Personal Property Replacement

If you have a replacement cost policy for your contents, you may need to replace the damaged items before the insurance company will reimburse the full replacement cost. If you decide not to replace some items, you will be reimbursed their actual cash value, which may be considerably less than the replacement cost value. Insurance companies will generally allow several months from the date of the actual cash value payment to replace the items. Upon proof of purchase, the depreciation that was withheld, should be released to you. Check your policy for the amount of time allowed to replace items. If the amount of time allowed is not sufficient; ask your agent or adjuster for an extension of time and if they refuse, seek assistance from the California Department of Insurance.

How the Payment Process Works

Payees on Checks or Drafts

If your home or building has a mortgage, the insurance company's check for the structural repairs may be made payable to both you and your mortgage lender. Lenders typically require that they be named as a loss payee on the homeowner's insurance policy, because it gives them authority to be named as a co-payee on checks from your insurance policy related to the structural repairs. The lender gets equal rights to the insurance check to ensure that the necessary repairs are made to the property in which they have a financial interest. When you receive a check from your insurance company, you may be required to endorse the check over to the lender, at which point they will put the money in an escrow account and release funds as the repairs are completed. In many cases, before the lender will release funds to get the repairs started, they will request a copy of a signed contract between the insured and the repair contractor, a copy of the approved estimate from the insurance company, a W-9 IRS form and other documentation. Upon receipt of the necessary documents, the lender generally releases 1/3 of the insurance proceeds to start the repairs.

Note: Many lenders will only release 1/3 of the insurance proceeds to get the work started. After the work is 50 percent complete, the lender may send an inspector to verify the status of the 50 percent completion milestone. Once verified, a second installment of 1/3 of the insurance proceeds is usually released. From this point, lenders may not release more funds until the repairs are completed and inspected. This means the property owner and/or the contractor may have to finance the remaining 50 percent of the work until the job is completed. Once the lender verifies that the job is completed, they should release the final 1/3 payment of the insurance proceeds.

Condominium or Co-op Insurance

If you own a condominium or co-op that has been damaged by fire, flood, or other disaster, you should be aware of what your insurance policy covers. Since you do not own the entire building, complex, or common areas, there will be two separate insurance policies involved in the settlement of the claim.

Your condominium or homeowners association (HOA) will have a master insurance policy that will cover the building and common elements, based on one of two different options: bare walls, or single entity. It is important to know exactly what the master policy covers and what your insurance covers.

"Bare walls" means that the HOA will insure only the building shell and common areas, including elements like exterior stucco or siding, insulation, wall framing, roofing, the floor structure, concrete, elevators, tennis courts, pool areas, exterior walkways, etc. In this case, the HOA may not be responsible for insuring elements inside the unit such as cabinetry, countertops, floor coverings, wallpaper, painting, light fixtures, appliances, bathroom fixtures, drywall, window treatments, interior doors, or any personal property.

"Single entity" means that the HOA will insure the building shell as well as certain elements inside the unit including cabinetry, countertops, floor coverings, wallpaper, painting, light fixtures, appliances, bathroom fixtures, drywall, window treatments, interior doors, etc. However, this may be limited to how the unit was originally constructed and only with like kind and quality of the original interior finishes. In this case, you may still be responsible for your personal property and for any additions, upgrades, or alterations made to the original structure by you or a previous owner.

Review the HOA's Declaration of Conditions, Covenants and Restrictions, its bylaws and its master insurance policy to determine what the HOA's policy should cover. These documents can vary dramatically. Be certain that your own homeowner's insurance policy covers any potential gaps in the HOA's insurance policy. Be aware of the HOA policy's deductible. For example, if the master policy deductible is $25,000 and the damages are less than this amount, the HOA may opt not to file a claim; or if the damages are more than $25,000, the HOA may assess the affected homeowners a portion of the deductible, which could be thousands of dollars.

Condo Repairs and Restoration

After a disaster, contractors will be bidding on the job of repairing the damages. Some may work on behalf of the HOA and others may work directly for you, or both. Whatever the case, the HOA Board of Directors will vote on the contractor to be used to repair elements that fall under their control, meaning the contractor the board chooses will have to work inside your home.


For more information on insurance claim and coverage help, there are a number of online publications provided by United Policyholders. For information on how to communicate with your insurance company, go here. For information regarding mediating insurance disputes, go here. And for tips on hiring professional help for an insurance claim, go here.

If you need to file a complaint, contact the California Department of Insurance at 1-8O0-482-HELP (4357).