Through mid-May, there have been 21 natural disasters, including an earthquake in Seattle and ice storms in Texas, Oklahoma and Seattle.
Then, tropical storm Allison caused severe flooding in Texas and other Gulf Coast and Eastern states. So far, though, there’s been nothing to rival Hurricane Andrew, which caused $15.5 billion worth of damage in 1992, or the Northridge earthquake in 1994, which, with damage totaling $12.5 billion, was the nation’s second-most-costly catastrophe.
But even those numbers pale in comparison to what insurance industry experts believe the toll could be if a similar destructive event were to hit a major metropolitan area today.
If a storm like Andrew were to pound Miami or a quake equal to the Northridge tremor struck Los Angeles, damage claims “would almost certainly” exceed $50 billion, they say.
Obviously, catastrophes like these can strike anywhere, any time. Hurricanes and floods are fairly predictable; people sometimes have enough time to get out of harm’s way. But tornadoes, windstorms and fires usually come with little advance warning. And earthquakes strike with no notice at all.
Still, even with plenty of warning, these calamities can be so devastating that, other than boarding up your windows and blocking doorways with sandbags, there is little anyone in their paths can do to protect their homes from damage.
Consequently, though most major insurance companies employ specially trained teams that respond immediately to a disaster, the huge number of property claims is usually overwhelming. In 1989, for example, Hurricane Hugo, which caused nearly $4.2 billion in insured losses, generated some 650,000 claims, more than half of which were in South Carolina alone.
Clearly, disasters place enormous demands on insurance company personnel, and it may take some time to process everyone’s claim. So it’s in the best interest of homeowners who sustain even moderate damage to do everything they can to get their claims on the fast track, and to keep them there.
According to insurance industry sources, here are the best ways to assure prompt settlement of any property claim, whether the damage is caused by a natural disaster or not:
– Make temporary repairs as best you can to prevent further weather-related damage or looting and vandalism, the Insurance Information Institute advises. Cover holes in the roof, walls, doors and windows with plastic or boards. Save receipts for everything you buy. You will be reimbursed for the cost.
Don’t make extensive repairs until after your insurance company’s claims adjuster has come and assessed the damage. And beware of contractors who encourage you to spend a lot of money on temporary repairs. Payments for interim fixes are part of your overall settlement with your insurer, so if you pay too much, you may not have enough left for permanent repairs.
– Assess the damage as best you can, and be prepared to give the most accurate description to your insurer over the phone. For example: “The roof is partly blown away, five windows are smashed and the first-floor ceiling is heavily spotted by leaking from the exposed second story.”
Policies sometimes cover the effect of a problem but not the cause. Wind damage to a roof may not be covered, for instance, but water damage from rain pouring down into an uncovered house might be. Do your best to ascertain how and when the damage occurred.
Insurance companies are often so inundated by claims immediately after a major disaster that they write a check based on your verbal description of the damages rather than wait for their adjusters to make a physical inspection.
– Insurers require that you notify them as soon as possible after a loss, so don’t wait. If debris such as a fallen tree prevents you from using your home or could cause further damage if left unattended, they will want to know so your claim can be put at the top of the stack.
When you call, try to find out if you are covered, how long it will take to process your claim, and whether you’ll need to obtain estimates for repairs.
– To assist the adjuster’s investigation, take photographs of the damage from all possible angles. To strengthen your case, retrieve recent “before” pictures of your home so the adjuster can make a valid comparison.
– If your property has been exposed to water, avoid using electricity until a technician has checked your lines and appliances. Most insurance companies pay for such inspections.
– If your property is uninhabitable, most homeowners’ policies cover your additional living expenses; food, housing, telephone and utility installation in a temporary residence; extra transportation costs to and from work or school; relocation expenses; storage costs; and furniture rental. Remember to save your receipts for these expenses.
The maximum coverage for such costs is generally equal to 20 percent of your total coverage. So if your place is insured for $150,000, up to $30,000 would be available. But some policies cover larger amounts, and others limit additional living expenses to the amount actually spent for a certain period of time, say 12 months.
Insurers usually will advance money for these expenses. But remember, the payments will be part of your total claim, so don’t try to live high on the hog. You’ll be spending your money, not your insurer’s.
Also be sure to leave a phone number and address where you can be reached.
– Prepare an inventory of all damaged or destroyed property, listing a description of each item and its purchase date or approximate age, its cost and the estimated cost to replace it. Brand names and model numbers also help.
Insurance companies say that everyone should keep an up-to-date inventory of their personal property. This is an example of how a little advance planning can save hours of grief if a disaster or a burglar strikes.
Take a room-by-room accounting of everything in your home and save the sales receipts or canceled checks, especially for such big-ticket items as appliances, furniture and electronic equipment. You also can back up your written inventory with photographs, videotape or even a verbal, tape-recorded description.
Once you make your list, make copies and keep them in safe places, perhaps a safe-deposit box at your bank, a fireproof container at home, or your office, desk or locker at work.
– Identify any and all structural damage to your house and other buildings on the property, including your garage, tool shed or swimming pool. Note cracks in the walls, damage to the floors and ceilings, even missing roof tiles or shingles.
If damage is likely but not evident, discuss that possibility with your adjuster. In some cases, he may recommend hiring a licensed engineer or architect to inspect the property.
– You may be asked to obtain detailed estimates for permanent repairs from reputable contractors. But even if you’re not asked, it might be a good idea to get two or three anyway.
This not only will help your adjuster evaluate your loss, it also will give you something with which to compare his analysis.
Don’t do anything permanent, though, until your insurer gives the OK. And when you do start work, deal only with reputable contractors.
Disasters often bring out the best in people as they strive to help each other through trying times. But they also attract fly-by-night contractors, who seem to follow major catastrophes from town to town.
