Coping With the Aftermath of a Disaster

Since we are in “high season” for natural disasters, it is a “teachable moment” to review some things to consider if you are the victim of nature’s wrath, an explosion, or any other damage to your property and are coping with financial losses and bills for temporary living expenses:

Call Your Insurance Agent- Ask your property and casualty agent about “fine print” in your homeowners policy. All policies have very specific language about types of losses that are covered (e.g., hurricane damage) and those that are not (e.g., flood damage and business use of a home). Of course, policy deductibles (e.g., $500) apply before any damage claims are paid.

 

Learn the Claims Process- Write down the steps to file a claim. Note that benefits paid will never exceed the maximum coverage provided by a policy for a dwelling, other structures (e.g., a shed), personal property, and additional living expenses.

 

Document Damage- Take photos, before cleaning up, to document losses. Separate damaged and undamaged property, but don’t destroy damaged items until a claims adjuster inspects them. If you have material you would like to remove immediately, because it could be a health hazard, ask your insurance agent for instruction.

 

Remain Available- Leave a phone number (e.g., friend or family member’s house or cell phone) where you can be reached by an adjuster or insurance agent if your home is uninhabitable or you are evacuated to another location.

 

Protect Your Property- Avoid further damage by making temporary repairs (e.g., putting a tarp over a damaged roof or plastic over blown out windows). Save receipts for reimbursement. Even if insurance doesn’t fully reimburse you, you may qualify for an itemized deduction for federal income taxes (Schedule A) if losses are in a federally declared disaster area,

 

Itemize Your Losses- Make a list of damaged articles and provide any other information that the adjuster requests to process your claim. Ideally, you have a home inventory of personal property and/or photos. Keep copies of information provided to the insurance company.

 

Inventory Your Possessions- If you don’t have a home inventory, make one now to provide evidence of property losses, if necessary. Store it away from home in a bank safe deposit box or cloud storage. No special forms are needed. Simply walk from room to room, listing all major items (e.g., appliances, furniture) with serial numbers and/or other identifying information.

 

Reach Out for Help- Review the settlement process outlined in your insurance policy. If you’re dissatisfied with a proposed settlement offer, negotiate for a higher amount, submit the dispute for arbitration, and/or consider hiring an attorney to represent you. If post-disaster theft should occur (unfortunately, this sometimes happens), report it to local police.

 

Prepare to “Grab and Go”-  Assemble a family “emergency box” that can be grabbed at a moment’s notice if you get “the knock at the door” and are given just a minute to clear out. A list of items to include can be found in this publication from Texas A&M Agrilife Extension.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.