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What should you know about homeowners’ insurance claims payments?

On Behalf of | Jul 7, 2022 | Firm News

When a fire, flood or other natural disaster causes damage to your home, you understandably want to get back to a sense of normalcy as quickly as you can. To help get back on your feet, you will likely rely on payouts from your homeowner’s insurance policy.

Understanding the claims payment process may help you prepare and begin the process of moving forward.

Reimbursement for damaged property

According to the Insurance Information Institute, the first step in receiving reimbursement for damaged belongings typically requires you to submit a property list to your insurance carrier. The insurance company will often pay you the depreciated amount for the property.

Should you decide to replace damaged belongings, some insurance policies also reimburse you for the difference in the actual cash value you first received and what you spent to replace the items. For example, a fire damages your kitchen appliances. The insurance company pays out $3,000 for the actual cash values of these appliances. To replace them, however, you spend $4,500. Your policy may call for you to receive the $1,500 difference.

Reimbursement for living expenses

In addition to the cost of repairing your home, your policy also possibly covers additional living expenses. This includes the costs for things not associated with fixing the damage caused, but rather, those that result from the property damage. For instance, additional living expenses commonly include expenses such as meals out or hotel costs while you wait for the repairs on your home.

Often, you will receive payments through more than one check, instead of in a lump sum. Losing your home or suffering other significant losses will likely throw your life into disarray. Recouping compensation for the property you lost may help put you on the path toward rebuilding.