HOMEOWNERS' INSURANCE: What Do You Do When Coverage is Denied or You Need Proof of Repairs?

The homeowner's insurance process can be challenging to navigate on your own. Depending on your claim history, property location, or property condition, coverage may be difficult to obtain. Additionally, in the unfortunate event of a claim, there may be actions required on your part to receive the full claim amount and maintain your coverage.

Act Quickly to Avoid Potential Cancellations
What happens if you receive a cancellation notice? Depending on the reason, you can try to have the cancellation rescinded, or ask your agent to shop for a new insurer. Though your insurance carrier is required to provide advanced notice of cancellation, it is still important to act quickly.

When your insurance company issues a cancellation notice because an inspection revealed an unacceptable risk on your property, repairing the issue can often result in the rescission of the cancellation. If you have an extensive claim history or an unacceptable property condition, it may be time to shop for a new insurer. Your agent can help identify a carrier that will provide the coverage you need.

Documenting Proof of Repairs
Making an insurance claim is stressful, even in the best of times, and payment is not always guaranteed. For example, many insurance companies pay actual cash value for your claim upfront, and will only pay the remainder upon receiving proof of repairs.

When you filed a claim after your home was damaged, you likely accepted an initial settlement amount based on the terms and limits of your homeowner's policy that represented an advance on the final amount. You used this money to pay the contractor's deposit, but now the work is complete, and you need your insurance company to pay the balance of the settlement. While each insurer has its process of verifying that the work is complete, there are several basic methods used to verify proof of repairs for the claim process.

• Photographing the area of repair. In most instances, your homeowner's insurance adjuster will conduct an initial inspection and photograph the damage to the property. Speak with the adjuster throughout the repair process, follow all instructions, and document the repairs with photos.
• Sending an invoice and photographs to the adjuster or insurance company. During the initial inspection, you may have gotten the adjuster's contact information. If not, call to determine the best way to submit your invoices, receipts, credit card statements, or photographs to the insurance company for proof of repairs. Adjusters will typically accept supporting evidence by email, fax, or hard copies sent to the local claims office.
• Obtaining the final invoice from the contractor. Some contractors coordinate all insurance issues for their customers and send the invoice directly to the insurance company on your behalf. This is known as “Assignment of Benefits,” and your signature is required for your contractor to assume ownership of your policy. The contractor may do shoddy work, use substandard parts, or pad the claim to take advantage of your insurance company. If your insurance company objects, the contractor may sue them on your behalf, with or without your knowledge. Be aware that assigning your insurance claim to a third party takes you out of the process, giving control to the contractor. When in doubt, call your insurance agent.
• Controlling your payment. As a condition of granting a mortgage, lenders often require that they are named in the homeowners' policy and that they remain a party to any insurance payments related to the structure. If you have a mortgage on your house, the check for repairs will generally be made out to you and the mortgage lender. Depending on the circumstances, your lender will ask for proof of repairs, and they will then endorse your claim check over to you so that you can pay the contractor directly.

And remember, when it comes to supporting your insurance claim, there is no such thing as too much documentation. If you need to avoid an upcoming cancellation or non-renewal, find a new carrier, or if you have questions about proof of repairs; Viera Insurance Agency can help. We will assist you in obtaining the right insurance coverage for the best price.