Many homeowners insurance policies come with hidden, hard-to-understand clauses. The consumer may not even realize their existence until a claim arises. However, by staying informed and keeping all relevant records you will be able to protect your interests in most cases.
A homeowners insurance policy will help pay for damages caused by hurricanes or fires. However, if problems arise and the insurer refuses to offer the estimated cost of repair, the customer can hire the service of a public adjuster.
Most people buy homeowners insurance; however, very few actually use it and therefore claims arise only in a fraction of cases. Needless to say, most consumers lack the expertise or knowledge to compare different policies or handle the claims process. Many of them are also unaware that problems like flooding are not covered.
It is very difficult for an average consumer to understand the policy after reading it. And consumers who buy insurance without properly understanding the terms and conditions will be in for unpleasant surprises when disaster strikes.
For example, consider the “anti-concurrent causation” clause. Very few people understand it. It refers to situations when only one of the two events that simultaneously cause damage to a property is covered by the insurance policy. In this case, the insurer may decide to cover neither event, because one of the events is not covered.
However, when it comes to insurance, ignorance isn’t bliss. Consumers need to ask questions and get answers if they do not understand something. This will save them a lot of trouble later. They should be aware of the fact that most insurers do not cover events like earthquakes or floods. However, if a consumer wants protection against earthquakes, they get buy an additional policy. Also consumers who want to protect their property against floods should get insurance from the National Flood Insurance Program.
Here are some more points to consider before buying a policy:
Do some research
Before buying insurance, consumers should do a bit of online research. Check out online forums to see what people are saying about the insurance company. See if any complaints have been filed against the insurer.
Compare policies
Get quotes from at least three companies before zeroing in on a particular company. Compare each element of the policy side by side. This will help you understand what events are covered. If there is something that you do not understand, ask your agent to explain.
Websites that allow you to compare policies are helpful; however, these websites are usually paid for referrals. Therefore, they do not usually feature companies that do not offer them a commission.
Make sure that the insurer is financially sound
The consumer should also check the financial capacity of the insurer. Insurance companies rarely go insolvent; still, it makes sense to check. Many states have special funds to cover claims when the insurer fails to do that. Nonetheless, getting claims is not easy if the insurer goes bankrupt.
Keep complete records
If you have all the relevant records, filing a claim (or a complaint if it is denied) will be easier. Useful records include photos of the damaged property. Note down all communications with the insurer. In case the insurer refuses a claim, demand an explanation.
Get a second opinion
The first contractor that the insurance company recommends repairing the damage needn’t necessarily be the most competent one. Therefore, try getting bids from different contractors.
Seek support
Suffering serious damage to your home is a thoroughly unpleasant experience. Seek support and advice from other people who have gone through a similar experience in the past.
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