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Five Steps to Help You Work with Insurance After a Disaster

If you’ve experienced a disaster that impacted your home, it can be difficult to know what to do or whom to reach out to for help. If you have homeowners insurance, you should reach out to them as soon as possible to file a claim and get the help and repairs you need.

These five steps can help guide you through the process:

1
Contact your homeowners insurance company
2
Review and understand your homeowners policy coverage
3
Avoid further damage
4
Prepare for the insurance adjuster
5
Get your payout and rebuild

Step 1 – Contact your homeowners insurance company

As soon as you and your family are safe, contact your insurance company and file a claim.

In addition to state, federal, and nongovernmental assistance, your insurance provider may be able to help with immediate financial assistance, depending on your policy. Standard in most insurance policies, additional living expenses (ALE) insurance will help with living costs as you get back on your feet.

Homeowner tip

If you are displaced from your home due to a hurricane or other disaster, ALE can be used to cover temporary housing, restaurant meals, laundry, commuting expenses, and pet boarding. ALE can also help with expenses associated with mandatory evacuation orders — even if your home is accessible and livable.

While you have your insurer on the phone, you may want to gather more information about your coverage. For example, you may want to ask if you have:

  • Extended replacement cost coverage — protects you from having to pay out of pocket if your home repair costs exceed your coverage.
  • Replacement cost coverage — should pay for your home’s repair or replacement costs, plus any lost or damaged items at today’s prices.
  • Actual cash value coverage — pays you the value of your home and the damaged items inside — also considering depreciation.

Next step

Step 2 – Review and understand your homeowners policy coverage

It’s important to review your policy and understand what homeowners insurance covers and does not cover.

  Often covered by homeowners insurance Often not covered by homeowners insurance
Damages
  • Personal property
  • Housing structure
  • Outbuildings — e.g., garage, shed, or fence
  • Hail damage to old roofs (greater than or equal to 10 years old)
  • Personal valuables — e.g., artwork or jewelry
Disasters
  • Wind
  • Fire
  • Explosions — e.g., from a propane tank
  • Lightning strikes
  • Hail
  • Theft
  • Vandalism
  • Floods — this usually requires flood insurance, which is separate from homeowners insurance
  • Earthquakes
  • Sinkholes

Homeowner tip

Don’t forget to look at the deductible – the amount you could end up paying after a claim. Some policies have a deductible based on a certain dollar amount (ex. $500 - $1500) or a percentage (ex. 5% to 25%) of the policy limit. You’ll want to be sure you can reasonably cover the deductible amount if you need to make a claim.

Check your policy annually to see if anything has changed or if you need to purchase supplemental coverage. It’s important to make sure your coverage reflects the current cost to repair or replace your home so you don’t run the risk of being underinsured.

Next step

Step 3 – Avoid further damage

Rebuilding after a natural disaster is hard — there’s no question about it. To help ease the recovery process, consider doing short-term fixes to prevent further household damage or to make your home more habitable. This could mean covering damaged parts of your home with a tarp or removing water-damaged belongings. Whatever the case, your insurer will be able to advise you on where to start.

Homeowner tip

You may have to pay repair bills yourself before any insurance checks arrive. If so, make sure to keep all receipts and document all transactions related to the disaster so you can file them with your claim later.

Avoid Further Damage

Next step

Step 4 – Prepare for the insurance adjuster

Your insurance company may send an adjuster — a person that investigates claims and determines how much the insurance company should pay out.

While it’s important to make repairs that avoid further damage, be cautious of making major, costly repairs before the adjuster comes and you know what will and won’t be covered and reimbursed from insurance.

Before the adjuster arrives, make a list of the necessary repairs — including the amount you paid for each item. To help prepare, gather any receipts you can find as well.

Homeowner tip

Don’t worry if you find more damage once the adjuster leaves. Some claims stay open for months after an initial report, so you should still be able to report the damage and be compensated for it.

After the adjuster appointment

Document everything. Stay in contact with the adjuster and document all communications with them.

Keep notes of:

  • Missed appointments
  • Unreturned calls, emails, or texts
  • What was discussed
  • Repair advice (get it in writing)

Make copies of:

  • All documents given to the adjuster
  • Your list of property lost or damaged
  • Written authorization for repairs

These things won’t always be necessary but having correspondence in writing could be helpful in emergency situations or throughout the claims process — for example, if the first adjuster is replaced by a new one.

Next step

Step 5 – Get your payout and rebuild

Your payout plan will depend on your homeowners insurance policy. It may cover some or all your repair costs — which could mean rebuilding your home or using the funds to pay off your mortgage if you want.

You may receive an initial partial payout to assist with urgent repairs, temporary fixes, or to replace personal property.

To make your return to normal as fast as possible, take action. Here are some good places to start.

Plan ahead with your mortgage servicer

Work with your mortgage company to develop a repair plan — you are not required to pay off your mortgage if your insurance claim exceeds your mortgage unless it is not feasible to repair or rebuild the property. Your plan will provide a solid foundation from which to start the recovery and rebuilding process.

Ask for disaster-related mortgage payment forbearance while you deal with damages. A forbearance allows you to temporarily suspend or reduce your monthly mortgage payments for a period of time.

Streamline payout processing

For property repairs, your name and the mortgage servicer’s name will be on the insurance payout check. This means you will both need to sign the check to release the funds, which can take time. To avoid delays, call your mortgage servicer to report the loss right after you file your homeowners insurance claim. Ask what procedures you must follow to get the bank to co-sign the check and release the payout immediately.

Likewise, make sure all your identification information is up to date — such as addresses and phone numbers — which will ensure you can be reached easily.

Monitor repair progress, and request escrow releases

Major repairs are commonly funded in stages from an escrow account. The mortgage servicer will hold a portion of your payout money in escrow and release it as repairs are completed and inspected.

Don’t wait for the mortgage servicer or contractors to verify milestones themselves. Monitor the rebuilding progress yourself and contact your lender as soon as the contractor completes each milestone. This should move the rebuilding process along and help you get back into your home.

Step 1 – Contact your homeowners insurance company

As soon as you and your family are safe, contact your insurance company and file a claim.

In addition to state, federal, and nongovernmental assistance, your insurance provider may be able to help with immediate financial assistance, depending on your policy. Standard in most insurance policies, additional living expenses (ALE) insurance will help with living costs as you get back on your feet.

Homeowner tip

If you are displaced from your home due to a hurricane or other disaster, ALE can be used to cover temporary housing, restaurant meals, laundry, commuting expenses, and pet boarding. ALE can also help with expenses associated with mandatory evacuation orders — even if your home is accessible and livable.

While you have your insurer on the phone, you may want to gather more information about your coverage. For example, you may want to ask if you have:

  • Extended replacement cost coverage — protects you from having to pay out of pocket if your home repair costs exceed your coverage.
  • Replacement cost coverage — should pay for your home’s repair or replacement costs, plus any lost or damaged items at today’s prices.
  • Actual cash value coverage — pays you the value of your home and the damaged items inside — also considering depreciation.

Next step

Step 2 – Review and understand your homeowners policy coverage

It’s important to review your policy and understand what homeowners insurance covers and does not cover.

  Often covered by homeowners insurance Often not covered by homeowners insurance
Damages
  • Personal property
  • Housing structure
  • Outbuildings — e.g., garage, shed, or fence
  • Hail damage to old roofs (greater than or equal to 10 years old)
  • Personal valuables — e.g., artwork or jewelry
Disasters
  • Wind
  • Fire
  • Explosions — e.g., from a propane tank
  • Lightning strikes
  • Hail
  • Theft
  • Vandalism
  • Floods — this usually requires flood insurance, which is separate from homeowners insurance
  • Earthquakes
  • Sinkholes

Homeowner tip

Don’t forget to look at the deductible – the amount you could end up paying after a claim. Some policies have a deductible based on a certain dollar amount (ex. $500 - $1500) or a percentage (ex. 5% to 25%) of the policy limit. You’ll want to be sure you can reasonably cover the deductible amount if you need to make a claim.

Check your policy annually to see if anything has changed or if you need to purchase supplemental coverage. It’s important to make sure your coverage reflects the current cost to repair or replace your home so you don’t run the risk of being underinsured.

Next step

Step 3 – Avoid further damage

Rebuilding after a natural disaster is hard — there’s no question about it. To help ease the recovery process, consider doing short-term fixes to prevent further household damage or to make your home more habitable. This could mean covering damaged parts of your home with a tarp or removing water-damaged belongings. Whatever the case, your insurer will be able to advise you on where to start.

Homeowner tip

You may have to pay repair bills yourself before any insurance checks arrive. If so, make sure to keep all receipts and document all transactions related to the disaster so you can file them with your claim later.

Avoid Further Damage

Next step

Step 4 – Prepare for the insurance adjuster

Your insurance company may send an adjuster — a person that investigates claims and determines how much the insurance company should pay out.

While it’s important to make repairs that avoid further damage, be cautious of making major, costly repairs before the adjuster comes and you know what will and won’t be covered and reimbursed from insurance.

Before the adjuster arrives, make a list of the necessary repairs — including the amount you paid for each item. To help prepare, gather any receipts you can find as well.

Homeowner tip

Don’t worry if you find more damage once the adjuster leaves. Some claims stay open for months after an initial report, so you should still be able to report the damage and be compensated for it.

After the adjuster appointment

Document everything. Stay in contact with the adjuster and document all communications with them.

Keep notes of:

  • Missed appointments
  • Unreturned calls, emails, or texts
  • What was discussed
  • Repair advice (get it in writing)

Make copies of:

  • All documents given to the adjuster
  • Your list of property lost or damaged
  • Written authorization for repairs

These things won’t always be necessary but having correspondence in writing could be helpful in emergency situations or throughout the claims process — for example, if the first adjuster is replaced by a new one.

Next step

Step 5 – Get your payout and rebuild

Your payout plan will depend on your homeowners insurance policy. It may cover some or all your repair costs — which could mean rebuilding your home or using the funds to pay off your mortgage if you want.

You may receive an initial partial payout to assist with urgent repairs, temporary fixes, or to replace personal property.

To make your return to normal as fast as possible, take action. Here are some good places to start.

Plan ahead with your mortgage servicer

Work with your mortgage company to develop a repair plan — you are not required to pay off your mortgage if your insurance claim exceeds your mortgage unless it is not feasible to repair or rebuild the property. Your plan will provide a solid foundation from which to start the recovery and rebuilding process.

Ask for disaster-related mortgage payment forbearance while you deal with damages. A forbearance allows you to temporarily suspend or reduce your monthly mortgage payments for a period of time.

Streamline payout processing

For property repairs, your name and the mortgage servicer’s name will be on the insurance payout check. This means you will both need to sign the check to release the funds, which can take time. To avoid delays, call your mortgage servicer to report the loss right after you file your homeowners insurance claim. Ask what procedures you must follow to get the bank to co-sign the check and release the payout immediately.

Likewise, make sure all your identification information is up to date — such as addresses and phone numbers — which will ensure you can be reached easily.

Monitor repair progress, and request escrow releases

Major repairs are commonly funded in stages from an escrow account. The mortgage servicer will hold a portion of your payout money in escrow and release it as repairs are completed and inspected.

Don’t wait for the mortgage servicer or contractors to verify milestones themselves. Monitor the rebuilding progress yourself and contact your lender as soon as the contractor completes each milestone. This should move the rebuilding process along and help you get back into your home.

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