Many Floridians whose homes were destroyed or damaged by Hurricane Charley are learning the hard way about the first rule of filing insurance claims: Keeping good records.
Armed with a good inventory of your personal belongings -- either on paper, video or tape, and backed with receipts and invoices -- there is little an insurer can say to dispute the value of property that's been lost, disaster or not.
But it's also a good idea to keep a notebook documenting every contact you've made with your carrier when you file a claim. That way, if you need to complain later, say to a company supervisor or perhaps even your state's insurance commissioner, you'll have records to back up your complaint.
List the time, date and description of every conversation you have with anyone with whom you speak, as well as that person's name and title. If you make an appointment and he doesn't show, write it down. If an adjustment is made on the spot, keep a record of that, too.
This kind of information is "vital" if you have to confront your insurance company, says J. Robert Hunter, director of insurance at the Consumer Federation of America, and a former federal insurance administrator and Texas Insurance Commission.
It's also a good idea to obtain a repair estimate from a trusted local contractor to use as a guide when talking to an adjuster. Not only will a detailed estimate give you a better idea of what the adjuster is talking about, it also help you make sure the guy hasn't overlooked something.
If emergency repairs are necessary to protect your property from further damage, by all means, make them. But make sure you keep your receipts so you can be reimbursed. Realize, though, that the insurer won't pay you for your own labor, only for work done by hired, outside help.
If the place in uninhabitable, keep any receipts you incur from seeking temporary housing. Those costs also are usually reimbursable under the "Additional Living Expenses" clause of your homeowners' policy. But again, the carrier will indemnify you for only what you spend. So don't expect to get some money back if you move in with Junior instead of Motel 6.
You might even be entitled to money up front for living expenses, CFA's Hunter points out. "Insurers are usually very good about these initial payments," he says.
That's particularly true in the aftermath of a hurricane, flood, tornado or some other catastrophic disaster, when reporters are focused on finding human interest stories. It's when the event, no matter how tragic, becomes yesterday's news that carriers tighten their purse strings.
"Most problems, if they arise, come later, when the big checks are sought," says the former federal and state insurance industry regulator.
If your claim is denied or you think the carrier's offer is too low, the consumer federation, an advocacy, research and education organization made up of some 300 groups, says you should demand that the company identify the language in your policy on which it based its decision or offer.
Once the carrier pinpoints the appropriate clause, you should be able to determine whether the company is right or wrong. If it's right, at least you'll understand how it came to the conclusion it did..
Another good reason to ask your insurer about the reasons for its actions: This step locks the carrier in; it is not allowed to produce new reasons for its decisions later on.
This step also should help you identify new limitations that were slipped into your policy when you weren't looking. According to the CFA, "many companies have unilaterally imposed a separate 'Hurricane Deductible' into policies" without adequately informing their customers.
The consumer advocacy group believes many people are unaware of this deductible, which typically is a percentage of the property's value and was introduced in the aftermath of Hurricane Andrew in 1992. Even when the deductible was disclosed, CFA says, disclosure was inadequate.
There's nothing illegal about shifting the cost of previously insured events to the consumer -- that is, decided not to cover something that used to be covered -- as long as you were told in no uncertain terms that you have an option to select the level of coverage you want. If that's not what happened in your case, it might be a good idea to consult an attorney.
Another new restriction that may catch you unawares is a limit on replacement cost payments, which may come into play if your place is a total loss. A typical cap is 25 percent over the face value of the policy. So, if your policy values your house at $200,000 and that amount was the limit of the policy, the insurer would pay no more than $250,000 to rebuild it.
That's okay if your house was the only one that was totally destroyed, say by a kitchen fire or some other single event. But if it was one of dozens lost to a catastrophe and the cost to replace your house rises to $275,000 because of a surge in construction costs caused by high demand, you'd be short $25,000.
If you review your policy and believe that under a reasonable reading, you've been shortchanged by your insurer, by all means take the company to court. CFA says you're likely to win. "Courts consistently rule that if an insurance policy is ambiguous, the reasonable expectation of the insured will prevail since the consumer played no part in writing the language," the group says.
Of course, it's always better to complain first. After all, the squeaky wheel and all that. But start a step above the clerk who answers the phone and logs in your claim.
Talk with a senior staff person, and speak from the detailed records you have kept since the claims process began. CFA says that the more serious the carrier sees that you are in documenting how you were treated, the more likely it will be in making a reasonable offer.
If you strike out, take your case to your state's insurance department. Every state will at least get the insurer to respond to your beef. And in cases that were clearly mishandled, some will actually twist the carrier's arm to get the company to be more reasonable.
But it is important at this step to be as unemotional as possible. Yes, it's your home. But present your case reasonably, sensibly, strongly, but without screaming or crying. Do this, and you won't turn off the people who are trying to help you.
If all else fails and you still believe you've been had, it's time to consult an attorney. "Now the notes you took are vital," CFA says.
FOOTNOTE: Most folks only want what they think they deserve. But if your insurance carrier treats you poorly, you may be due additional compensation. Courts don't look too kindly on companies which act in bad faith. "Since insurance companies take your money in exchange for their promise to make you whole when disaster strikes," CFA says, "they are to act in utmost good faith in performing that obligation."