Total loss insurance claims can be stressful. Depending on your type of insurance policy, your insurer will cover your claim in different ways.
With some insurance policies, insurers are downright generous, covering virtually all your property damage and possessions.
With other insurance policies, insurers can seem unnecessarily restrictive, denying your claim or sharply reducing your payout.
How Insurance Policy Type Can Affect A Total Loss Insurance Claim
We’re explaining the different types of insurance types and how they affect your total loss insurance claim.
Replacement Cost Policies: With a replacement cost policy, your insurer gives you the exact dollar amount required to replace your possessions and property. Instead of considering depreciation, your insurer takes a fairer approach, allowing you to replace your property with items of a similar kind and quality.
Actual Cash Value Policies: An actual cash value policy pays you the amount you need to replace the item – minus depreciation. You might think your home and its possessions are worth over $400,000. After all, that’s what you paid for it. However, when you subtract depreciation, you may find your property is only worth $250,000. That’s how an actual cash value policy might work.
Extended Replacement Cost Policy: Under an extended replacement cost policy, the insurer agrees to pay a certain percentage over the limit to rebuild your home. An actual cash value policy might pay you 30% less than what you paid for your home, for example. With an extended replacement cost policy, your insurer might agree to pay 30% over the actual cash value to repair your home.
Guaranteed Replacement Cost Policy: Under a guaranteed replacement cost policy, the insurer guarantees that it will pay whatever it costs to rebuild your home the way it was before the disaster.
Stated Amount Policies: A stated amount insurance policy is common for mobile homes. Under a stated amount policy, your insurer agrees to cover an agreed upon amount at the time your policy is issued – a stated amount. You might buy a home insurance policy with a stated amount of $20,000, for example. If your mobile home is destroyed, then you receive $20,000 – regardless of the value of your home or possessions.
Depending on the type of insurance policy, your insurer will cover a total loss claim in vastly different ways. Consider these types of insurance when determining the right home insurance policy for you.
Many people don’t know how an insurance claim works until they’re right in the middle of one. An insurance claim can play a crucial role on your financial future. A denied claim can leave you with thousands of dollars of losses out of pocket. A successful insurance claim, meanwhile, can make you whole against after an unexpected event.
How does a home insurance claim work? Here’s the typical process used during most insurance claims:
Step 1) An accident occurs
You come home to find your condo flooded. Your house burns down due to a cooking fire. Your upstairs neighbor’s toilet leaks, causing water to come down through the ceiling. Whatever the case may be, these are the types of events you expect insurance to cover.
Step 2) Take photos and document everything
Before taking any action, it’s crucial to document and photograph all evidence possible. If you don’t have any photos or documents, then you don’t have any proof the damage actually occurred. Some people clean up the scene and start making basic repairs before taking any photos. Don’t do this. Take photos of anything and everything related to your claim.
Step 3) Secure the scene if safe to do so
Next, secure the scene. You have an obligation from your insurance company to minimize damage as much as reasonably possible. If a storm has knocked a hole in your roof during a storm, for example, then you can’t just ignore that hole for weeks and allow water to enter your home and expect damage to be covered. Put a tarp over the damage, for example.
Step 4) Contact your insurance company and start the claim
The next step is to contact your insurance company and begin the actual claim. All insurance companies have a well-established claims process. Some require you to call. Others let you begin a claim online. Some even have an app. The insurer may provide you with funds upfront. You can use these funds to stay in a hotel, for example, or for other emergency expenses. They may also tell you to hire an emergency restoration company.
Step 5) Read your insurance policy
Now is a good time to read your insurance policy. Make sure you understand what’s covered – including any restrictions relating specifically to your incident.
Step 6) Start filing paperwork
Your insurance company will require you to start filing paperwork, including proof of loss forms and other documents.
Step 7) Consider requesting your own estimate
An insurance company may estimate that repairs will only cost $1,000. They may be right – but it never hurts to get a second or third opinion. Consider calling restoration companies or contractors to give their thoughts.
Step 8) Talk to your insurance company’s adjuster
Typically, your insurance company will send an adjuster to the scene to verify the case will be covered. This adjuster will make sure it’s a legitimate claim. The adjuster will inspect the damages and repairs. At this point, you may want to hire your own public adjuster, who works for you and not your insurance company.
Step 9) Insurance company presents an offer or denies your claim
At this point, the insurance company will either present an offer or deny your claim.
Step 10) Negotiations and disputes
You can choose to accept or deny your insurance company’s offer. Consider talking to a public adjuster if the insurance company has denied your offer (or presented a low offer) for no apparent reason.
Step 11) Receiving payment and conclusion
The insurance company pays you, you submit final paperwork, and the claim is complete.
Find more insurance claim tips about how home insurance claims work in this article.
Claims processes vary between situations. These are the general steps used for most insurance claims. To hire a public adjuster on your side throughout this entire process, contact ClaimsMate Public Adjusters.
Property damage claim adjusting plays a crucial role in the insurance industry. Property damage claim adjusters work throughout the state of Texas, helping policyholders reach an agreement with their insurance companies over the scope of a covered loss.
Some people hire property damage claim adjusters in Texas at the very start of a claim. If you know a claim is going to be messy, complicated, or expensive, for example, then you may want to hire a public adjuster to handle everything on your behalf.
Other Texans only hire a public adjuster after they have run into problems with their claim. The insurance company may have denied your claim, for example, or provided you with a less-than-expected settlement offer.
In any case, a licensed property damage claim adjuster works on your behalf to secure the highest possible settlement to which you are legally entitled.
The property damage claim adjuster may negotiate with the insurance company’s adjuster. The insurance company’s adjuster is a salaried employee of the insurance company. He or she has a vested interest in paying as little as possible for your claim. The property damage claim adjuster hired by you, meanwhile, has your best interests in mind.
The property damage claims adjuster will pore over your claim and your insurance policy to determine what should be covered. Then, the adjuster will negotiate with your insurance company on your behalf, representing your best interests, to ensure you receive an equitable outcome.
For insurance claim assistance in Texas, consider hiring a property damage claim adjuster. Many Texans have been able to secure an insurance claim tens of thousands – or even hundreds of thousands – of dollars higher than they otherwise would have.