How to handle a damaged home!

This post is provided by John May.

Securing a damaged home will be overall the most important step moving forward with your claim. Here is some helpful advice to guide you moving forward with your damaged home.

Most insurance companies will require you to take care of the damage to your home. You must secure your property to prevent any further damage. If something is a total loss, this shall be unnecessary and will be dealt with by the insurance company. However, if only one section of your home was damaged, be proactive and swift in securing the damaged location to prevent any further damage this is known as "mitigating damage," which is just a term for preventing further damage to the property.

This will include, covering holes in walls, protecting your roof from the elements, boarding up any damaged windows, building a fence to prevent any looters/robbers. Moving your property inside the home that may cause further damage is not advised. For example, moving a television that was underneath a hole in a ceiling. 

Your insurance policy should include a clause called "loss of use," this means the insurance company will reimburse you for cost of living, any expenses needed while displaced from your home. However, you are not entitled to the difference between the cost while your displaced and what it has been costing you in your home. For example, your monthly living expenses are $5,000 per month, where you are now having to add hotel cost, restaurant meals, laundry expense, extra gas for your car, totaling an additional $2,000, your insurance company will only reimburse the extra $2,000 per month. You can always find help from a local public adjuster. 

Many homeowner insurance policy holders choose to stay with family members and friends. In most cases, your insurance company will reimburse your host for any additional costs of your stay at the time. Speak with your host to itemize the expenses of your stay. Be cautious and frivolous and be patient with your insurance company if they choose to negotiate this cost with you. Be polite in explaining to your insurance company that you are saving the company valuable time and money by choosing to stay with a family or friend in a hotel stay, and restaurant expenses. 

Filing an insurance claim enables you to rebuild or repair your damaged home. "Actual cash value" policyholders are entitled the amount it would take to return the home, including the contents of the home.

"Replacement" policyholders are entitled to the amount it would cost to replace the home and contents within, regardless of the market value of what was lost. "Replacement" coverage does not require you to rebuild your home in the same lot. You have a choice in where you would want to rebuild your home, if it is the same value of the previous lot. If you choose to move your home to a more expensive lot, you will have to cover the difference. If you choose to not rebuild, but to invest the money in something unrelated like a personal business or college fund, the "replacement" policy will become "actual cash value" policy which will in term yield about 15% less.