Homeowners everywhere insure their homes as a means of protecting the investment they have in their homes, but in the event that you ever have to file a claim, the secret to getting every penny that is owed to you lies first in understanding what your homeowner’s insurance policy promises to pay and then ensuring that you can properly negotiate a settlement with your insurance company’s claims adjustor.

For anyone who’s ever suffered a devastating loss of their home due to fire, flood, or other disaster, claims are an emotionally charged time.  Because most homeowners have very limited experience filing claims, it can be very easy to get swept up in the chaos of the moment.  The most important thing any homeowner can do is remain calm and take each step of the process in order.

Report the Claim

By contacting your insurance carrier to report the claim you set into motion a number of critical steps.  Some companies may have a national claims center that will need to be contacted in order to set the claims wheels into motion.  Regardless of whether you make initial contact by telephone or by submitting an online claim form, your insurance company will want to know exactly what happened.  Be prepared to give a detailed statement and to provide a written report from the fire department if one is available.

There’s a very good chance the insurance company will want to know the cause of the loss, so if it is known, tell your insurer.  In the event that your loss is fire-related, don’t offer your opinion as to what you think may have caused it.  It’s OK to tell your insurer if the fire department investigator suspects faulty wiring, but otherwise, remain silent on other possible causes.  The fire department and your insurer will conduct a thorough investigation in order to establish the cause.  They will have state of the art methods of determining a cause, so guesswork can only create confusion.

Meet with the Adjustor

The insurance company will send out an investigator and a claims adjustor.  The adjustor’s sole job is to make a determination as to how much money to offer you for your loss.  Keep in mind that the adjustor’s primary function is to minimize the insurance company’s losses as much as possible, while you are trying to get as much money as possible.  This puts you on opposite sides, but the process doesn’t have to be adversarial.

The best thing that a homeowner can do to ensure that this process goes smoothly is by having a complete inventory of items in your home.  Electronic items should be cataloged and photographed.  Take note of model and serial numbers, purchase date and price, etc.  This list should be kept off site, or at the very least, in a fireproof lockbox or safe.  Then, if there is a claim, you’ll have a complete list at your disposal to help you recreate everything for which you should be compensated.

Resist the Urge to Agree to Your Insurers First Offer

The adjustor will have the best interests of the insurance company in mind when offering compensation for your losses, so go slowly and methodically through each room of your home.  Claims adjustors like to offer a fixed amount for all the items in a closet or in a room.  The figure they give may sound good, but the reality is that handling a claim in this fashion can cost you thousands of dollars.  Instead of agreeing with this assessment, tell the adjustor you’d prefer to discuss specific items.  There’s no crime in waiting until the adjustor has accumulated a complete list prior to discussing money.

The claims adjustor will be a skilled negotiator, so don’t say “yes” automatically.  Take it slowly and make sure you’re getting the best possible deal you can before agreeing to what is being offered.

Negotiate the Contents Separately From the Dwelling

It’s vitally important that you negotiate with your insurer’s representative professionally and that you recognize the difference between being compensated for the home itself – and the possessions located in the home.  You will have to rebuild your home with all of the proceeds from the insurance claim, so ensure that the amount being offered is as high as possible.  By keeping the figures separate, it will be easier to differentiate between the two very large piles of money, while ensuring that you can rebuild and replace all of your belongings.

An important part of ensuring that your insurance company will deal with you honestly and fairly at claims time begins with choosing a quality insurance company with whom to insure your home.  Here are several steps that should be taken in order to properly assess an insurance carrier:

• Choose a quality insurance broker that can shop the market for you.  You’ll save money, time, and can carefully examine all of the options available to you from the comfort of your own home.
• When considering insurance company quotes, compare apples to apples.  Some insurance policies will pay for replacement cost, while others will not.  By ensuring that you’re comparing similar policies you can gain a more accurate understanding of the real difference in price.
• Carefully examine your quotes to ensure that there are no hidden fees or charges that could add substantial cost to having the policies
• Explore the possibility of receiving discounts in exchange for purchasing multiple lines of insurance from the same insurance carrier.  If you’re also in the market for life, automotive, or other policies, you have an opportunity to save even more.

Coming out on top in the event of a claim begins by doing your homework when purchasing your homeowner’s insurance policy.  Then, if the unexpected takes place and you suffer a loss, you can rest assured that the insurance company will deal honestly and ethically with you in processing your claim, negotiating with you, and providing you with the funds you’ll need to pick up the shattered pieces of your life and start your life all over again.