Hurricane Irene Aftermath: 6 Tips for Flooding, Natural Disaster Insurance Policies


4. How can you be sure the coverage you have will be enough to rebuild?

Homeowners insurance is usually based on the cost to rebuild rather than the current market value of a home. Yet 30 percent of homeowners incorrectly believe their insurance is based on the current market value of their home, according to the MetLife Auto & Home Insurance Literacy study from August 2010 and is conducted every two years.

Also, the majority of people surveyed expect their insurance to cover any building code mandated upgrades necessary to rebuild after a loss. But without an individual rider, or additional coverage, most home insurance does not cover these required upgrades, according to the MetLife study.

Spry said home and business owners should make sure they have coverage for replacement costs rather than actual cash value.

She said the higher premium may be worth it for the replacement cost in the long run, depending on how big your house is, how old it is and what it costs to replace it.

Business owners have other insurance options, such as service interruption coverage, and ingress and egress coverage to help employees in commuting to the business. Contingent business interruption coverage also offers help if your company is dependent on another business, such as a restaurant next to a ballpark which shuts down due to flooding.

5. Start the insurance claims process as soon as possible.

The NFIP recommends three steps once you have flooding.

First, you should also call your agent or insurance company to file a claim and an adjustor should contact you within a few days. You should know the name of your insurance company, your policy number and contact information where you can be reached.

Second, take photographs of all damaged property, including discarded objects, structural damage and standing floodwater levels and make a list of damaged or lost items, including date of purchase, value and receipts if possible.

Third, your adjuster will provide you a Proof of Loss form for your official claim for damages which you must file with your insurance company within 60 days of the flood. You should receive your claim payment after you and the insurer agree on the amount of damages and the insurer has your complete, accurate, and signed Proof of Loss form. If major catastrophic flooding occurs, it may take longer to process claims, according to the NFIP.

6. Should you hire a public adjuster on a big claim?

Spry answers no.

Public adjusters, who work for you and not the insurance company, will take a percentage of a claim even if the insured is investing a significant amount of time, such as preparing forms, for the process.

"Granted some adjusters are very knowledgable about insurance, but it's best to have coverage with an accounting firm to provide claims preparation coverage," she said. "There might be a limit on it, but it's not usually that expensive and you'll have support from an accounting perspective."

Emily Friedman contributed to this report.

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