Warn clients of these 10 common insurance claims mistakes - PropertyCasualty360

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10. Filing too many claims

Claims history is one factor home insurance carriers use when settling premium rates. So the more insurance claims a homeowner has on file, the more expensive their home insurance coverage will be.

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9. Cleaning up too quickly

Cleaning up damages too soon can interfere with the claims process. Sometimes, homeowners throw away damaged property or receipts needed to support their insurance claim. “It’s important to keep a thorough paper trail during a claim. Not doing so could be a serious home insurance claim mistake,” writes Christopher Elliott and Jason Metz for Forbes.

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8. Not documenting the damage

This is the number-one error Jason Christiansen, co-CEO of Young Alfred, sees with home insurance claims, he told Forbes. Ideally, homeowners should have “before” and “after” photos of their home to show the extent of damages.

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7. Attempting to tackle a large claim alone

It can take months to solve a complex claim. Hiring a public adjuster to work on the insured’s behalf with the insurer’s adjusters can help ensure proper documentation of damage and that all deadlines are met. According to Forbes, the usual fee for a public adjuster is 20% of the insurance settlement.

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6. Waiting to file a claim

Depending on the state, insureds have up to one year to file a claim. However, Tim Felks, head of property claims at Farmers Insurance, warns clients that “Damage doesn’t get better with time,” he told Forbes. “Reporting a claim as soon as possible can help get repairs going sooner, lessening the time the insured is dealing with the repair process.”

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5. Poor communication

Sometimes, homeowners do not effectively explain damages sustained to their property, which can bog down the claims process, Tim Barziza, SVP at Chubb, told Forbes.

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4. Failing to maintain the property

“Home insurance is for unexpected damage, not problems that could have been dealt with,” writes Elliott and Metz. Brokers should remind insured the importance of proper home maintenance because common issues such as a burst water pipe or roof leak are not likely covered under a home insurance policy.

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3. Not having a home inventory

A home inventory is a list of the homeowner’s possessions. Encourage insureds to start a home inventory as soon as coverage starts and to include all property such as furniture, kitchenware, jewelry and more.

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2. Not having the right coverage

Homeowners can face serious financial consequences if they don’t have the right coverage in place. For example, homeowners in hurricane-prone areas may assume a standard home insurance policy covers flood and wind damage when, in fact, many policies exclude these losses. When prospecting new clients, agents and brokers should remind them of the benefits of working with an insurance advisor who can make sure a home’s risk exposures are adequately covered.

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1. Failing to read the insurance policy

Insureds must read their policies and understand coverages and exclusions. To avoid misunderstandings, agents and brokers are encouraged to go over policies with clients and answer questions. According to Charlie Wendland, head of claims at Branch, many policyholders mistake “water backup” coverage as flood insurance. Talking with clients about exclusions and insurance jargon can help avoid such confusion.

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About one in 20 insured homes has a claim each year, with the average claim totaling $13,814 between 2014 and 2018, according to the Insurance Information Institute (Triple-I).

Filing a claim for the loss or damage of property is one of the worst experiences for a homeowner. And if errors occur during the claims process, a homeowner could face serious financial consequences.

Some common snafus homeowners make that can impact a claim include not securing coverage in time, choosing a deductible they cannot afford, and not having the right coverages in place.

“One big issue is underinsurance,” Jessica Hanna, spokesperson for the American Property Casualty Insurance Association, told MarketWatch in a September article. “That only seems to come to light after a major storm.”

However, there are other errors insureds should be aware of before filing a claim. Click through the above slideshow to reveal ten common mistakes clients should avoid with home insurance claims, according to Forbes.

Additionally, agents and brokers should educate clients and prospects about the benefits of working with an insurance advisor to secure proper coverage and navigate the claims journey to ensure the best possible outcome for insureds.

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