How To Prepare an Insurance Claim after Hurricane Isaac
With Hurricane Isaac touching down on several southern states, Gulf Coast residents once again face the prospect of severe property damage. Heavy winds and torrential downpours conspire to wreck houses, swamp vehicles and put lives in danger. Fortunately, insurance policies should cover much of the damage, as long as homeowners know their policies and are willing to act to protect their interests.
Isaac is on an eerily similar trajectory to Hurricane Katrina, which infamously brought wreckage to New Orleans and surrounding areas in 2005. Hopefully, the city will not see nearly the same destruction, thanks to infrastructural improvements in its flood defense systems. Nevertheless, some wind and flood damage from the hurricane is nearly inevitable.
There are several steps that consumers can take both before and after a major weather event to expedite any potential property insurance claims.
“The first thing people should do is document what is in their homes. It’s easy to do now with a smart phone,” says Fred L. Herman, a trial attorney in New Orleans who has litigated insurance cases. For families with no phone, a disposable camera will do the trick. If all items of value are documented and described before a claim needs to be made, it will be a lot easier to prove and come up with an accurate value of what has been damaged.
Next, once the danger has passed and homeowners can inspect their property, the insurance company should be notified as soon as possible.
“Most of the local insurers will have alternate phone systems in place where they will utilize a 1-800 number,” Herman says. “Even if their local office is not up and running, they’ll have a remote location where they can take those calls.”
If a cell phone is used to place the call, it should automatically record the date and time you contacted your insurer; otherwise claimants should keep a record of when they called.
All property damage should be noted and photographed. It’s tempting to get started on clean-up as soon as possible, but any discarded goods should be carefully documented and labeled so they can be included on the claim.
“Carpet, damaged furniture, electronics, whatever it may be,” says Herman. “If you throw those things away, you then have to document exactly what it was that got damaged. One needs to be very cautious about that.”
Proof of Claim
The next step is to go over all the damage with an insurance adjuster in person and fill out a Proof of Claim that details the value of all items damaged or destroyed. Different states have different laws, but in general consumers are protected by statutes that force insurance companies to honor their policies in a timely manner. In Louisiana, for example, insurers have 14 days to respond to a claim, or 30 in the case of a major catastrophe. Penalties for lateness are $5,000 per violation.
Hopefully, the insurer will fully settle the claim without any dispute. If not, consumers who have to bring litigation against the insurer will be smart to have documented the whole process to strengthen their case.
It’s also important to have a strong understanding of exactly what is covered under the policy. Are the provisions for wind and property damage separate from flood damage? Are medical expenses included, or a living allowance for people who are displaced by the storm?
If it comes to a fight, consumers can go to the state insurance commissioner first to try to resolve any problems. If that doesn’t work the next step is to hire a property insurance attorney.
“If one would take a look at the history of Katrina and events like Katrina, there are many hundreds if not thousands of claims that have to be litigated for one reason of another,” Herman says. “Sometimes it’s a legitimate dispute. Sometimes it’s an issue to what coverage is applied. Sometimes it’s an issue of the value of property destroyed and how to measure that value.
“I’m not suggesting that every insurer or every claim has an inadequate response,” the attorney says. “I’m just saying that experience teaches us many hundreds if not thousands require some intervention of the legal system. And that’s unfortunate, particularly after a disaster.”