In the last post, we gave you an explanation of how to report and file a homeowner’s insurance claim. Today, we will explain what happens after the claim has been reported.
Most of our preferred homeowners’ insurance carriers will assess your damage upon your first contact with the First Notice of Loss Agent and will make a determination if emergency services should be rendered immediately. In many cases, it will be necessary for the insurance company to send out a licensed and bonded contractor immediately in order to mitigate any further damage to your property. The good news is this service is normally at no cost to you, even if the damages are ultimately not covered under the homeowners’ insurance policy.
It is very important you contact your insurance company right away to file a claim, especially for water-related damages, which can cause damage that is invisible to the naked eye. Water damage, in particular, should be dealt with immediately in order to avoid any further long term damage such as mold or wood rot. Check with one of our licensed agents to make sure these emergency services are covered under your policy we placed you with or for which you’d like to receive a quote. Our preferred insurance carriers’ preferred contractors are licensed, bonded, and have extensive experience and the right equipment to detect unseen moisture levels and completely dry out your home.
Now that you have filed the claims and your carrier has determined whether or not emergency services are necessary, it is time to find a qualified contractor who can provide you with an estimate as to what it will take to make you whole again. Once your home insurance company provides you with a coverage determination and an adjuster has assessed your damage, you should then quickly look for reputable contractors in your area to provide you with bids on your repairs.
As a general rule, look for local businesses with an established physical location in your area and one that has good reviews online. This is usually indicative of an honest and trustworthy contractor, one who will follow through with your project and furnish you with quality workmanship. It’s also a good idea to get at least two bids for your repair project to make sure the cost estimate is in line with the work being rendered.
If you are satisfied with the estimate from one of the contractors and it falls in line with what your insurance company says they will pay you can have the contractor begin the repairs. If, on the other hand, your contractor’s bid comes in for more than what the insurance company estimates for the repairs, you should submit the estimate to your insurance company right away.
In many cases, your adjuster will work with you and your contractor to ensure your home is repaired to your satisfaction by restoring it to the condition it was in before the loss occurred. The insurance company could require another adjuster inspection if there is still some disagreement on the extent of damages to your home.
What is an Assignment of Benefits and How Does it Affect Me?
An assignment of benefits is a contract between you and a contractor such as a roofer, plumber, or construction contractor where you give the contractor control of the benefits of your claim. They file a claim for their services and collect their money directly from your insurance company.
Once you relinquish control of your claim, your contractor can submit any amount they want for your repairs, sometimes billing the insurance company 2,3,4, or even 5 times the going rate for the same services, and sometimes including billing for services that were never performed. You do not see this and cannot verify what was done. Some of the potential pitfalls to assigning your benefits to a contractor include:
- You commit yourself to this contractor with little to no recourse should you be dissatisfied
- You can no longer comparison shop in the event you are displeased with their service
- Even if they walk off the job with incomplete work they can still claim on your insurance!
- Both you and the contractor are bound by the terms of that contract which could affect you in the event of contractor malfeasance!
Beware of potential fraud from contractors with any of the following approaches:
- Solicits jobs unannounced for damages you did not know were present
- The contractor is offering “free” services such as a roof or kitchen
- Wants to start work immediately and advises you to delay contacting your insurance company
- Offers to “take care” of your deductible
Any of these issues could lead to an insurance fraud investigation which could put you in jeopardy so, take heed to any “red flags” that seem too good to be true.
As always, take your time and talk with one of our experienced insurance agents in our office should you incur a claim under your home or auto policy. We will make every to make the claim as easy as possible for you. We can even line up some reputable contractors in the area for you and coordinate claims with the insurance company.