A row of houses stands in floodwaters at Grassy Sound in North Wildwood, N.J., as Hurricane Sandy pounds the East Coast Monday Oct. 29, 2012. The powerfulAssociated Press -
For some homeowners, the aftermath of Sandy could bring a whole second
round of troubles. After the storm passes, they may have to negotiate with
their insurers to get the cash they need to repair wind and water
damage.
Homeowners' insurance companies have gotten tougher as weather has
become more cataclysmic. They've raised rates, carved out some coverage and
tucked in new wind and hurricane exclusions and deductibles.
Homeowners need
to play the game right if they want to get claims paid quickly and thoroughly.
You can start early - here's what to do now and later.
FIND YOUR POLICY
If you've got your flashlights loaded with fresh
batteries and your water bottles in a row, dig out your homeowner's insurance
policy and see what kind of coverage you actually have. You may be unpleasantly
surprised: After Hurricane Irene hit in August 2011, more insurers tucked hefty
wind and hurricane deductibles into their policies. They run 2 percent to 5
percent of the insured value of your home, says Charles Hahn, an insurance
agent in Little Falls, New Jersey, where "we're known for flooding a
lot."
Keep in mind that many insurers have "anti-concurrent causation
clauses" in policies now that say if you have damage from multiple causes,
say wind and flooding, where wind is covered but flooding is not - they won't
cover anything at all.
A new flood insurance law passed this summer requires insurers to use
federal data to allocate the costs in cases where a home is totally destroyed
by flooding and wind damage.
Homeowners who live near the shoreline do tend to
have federal flood insurance; their mortgage lenders require it. But Hahn says
he saw an uptick in inland purchasers after Irene. Nationally, some 5.65
million federal flood insurance policies were in place at the end of 2011 -
that represents a 17 percent increase over the previous year, according to data
from the Insurance Information Institute.
That's good, because so much rain
fell during Irene that basements flooded in neighborhoods far away from rivers
and streams. The same - or worse - is expected this time around.
Even if you don't have flood insurance, you might have extra protection
from water damage if your insurance policy covers failure of your sump pump,
says Richard Cohen, a property loss consultant at Clarke & Cohen in
Bala-Cynwyd, Pennsylvania. This kind of coverage is generally included in some
high-end homeowners' policies, although other policies may offer limited
coverage.
One silver lining: If the water rises so high in your neighborhood
it floods your car, you're probably covered by your comprehensive auto policy,
reports the Insurance Information Institute.
TAKE PICS — NOW AND LATER
While you are waiting for the storm to hit in
earnest, take your camera phone around your house and inventory all of your
belongings, says Bob Hunter, director of insurance for the Consumer Federation
of America.
Even better: video. "You can actually see everything before
and after," Cohen says.
If your home is damaged, document it carefully
before you move anything and get images as soon as possible. "When things
dry, they can look a lot different," Cohen says.
Leave the damage as it is until an insurance adjuster arrives on the
scene, if possible. However, Sandy is expected to hit a wide swath of the
Northeast, so an adjuster may not make it to your home for a few weeks.
"It all depends upon how significant the power outages are," notes
Cohen. Keep all damaged items until the adjuster has had a chance to look at
them.
EMPTY YOUR BASEMENT AND FRIDGE
Even if you have flood coverage, you may be
disappointed to learn just how little it will cover. You're protected for
structural damage and the cost of replacing basement utilities like electrical
panels and heating units, Hahn says. But all the precious items you have stored
downstairs? Not so much. Might as well haul them upstairs now if you're worried
about a wet basement.
Homeowner Richard Dukas, a public relations executive
from Teaneck, New Jersey, could see the floods from Irene coming and saved all
of his possessions from his basement. He had flood coverage. He still ended up
getting only $10,000 back from the insurance on $15,000 worth of damage.
Most homeowners' policies do cover the cost of food that spoils when the
power goes out. But if that's your only loss, it will be subject to your
policy's deductible of $250, $500 or more. That means that unless you have a
large freezer full of meat or priceless truffles, you may not find it worth
filing for.
FILE CLAIMS PROMPTLY
You may get faster attention if you submit a claim
quickly. "Homeowners who get in line first have a better chance of
recovery than those who make claims quite a bit later," observes Linda Kornfeld,
a Los Angeles attorney with Jenner & Block who represents consumers and
business owners in cases against insurance companies.
Federal flood insurance
typically carries a 60-day deadline, though it often gets extended after
extreme events. Miss that deadline and your flood insurance will be worthless.
CHOOSE YOUR WORDS CAREFULLY
Call your insurer as soon as you see damage and let
them know if you need to spend money to make immediate repairs, says Kornfeld.
But don't characterize the cause of the damage - the company could dredge up
your remarks and use them to deny your claim. So, for example, say: "My
window is broken, and there is water on my dining room floor and I am going to
buy plywood to cover the window." Don't say: "Wind broke my window and
my dining room flooded."
DRY OUT
Hire an emergency services company to dry everything
out and dehumidify the area. Some big national chains include Servpro and
Belfor. They'll bring in equipment, such as special fans, to get things dry
again. Getting your stuff dry is really important because mold can be an even a
bigger headache than flooding. "Insurance policies have limitations for
mold," Cohen warns.
Check with your insurer before laying out large
amounts of money for repairs, though. It may refuse to pay. They typically will
pay small amounts for immediate fixes, such as a tarp to cover that gaping hole
in the roof. Of course, keep all of your receipts.
GET A ROOM, BUT KEEP TABS
If you move into a hotel because your house is
without power, that's on you. However, most insurers do cover hotel stays if
your house really is uninhabitable, thanks to a gaping hole in the roof or a
tree in your bedroom, for example. You may also be covered for meals and hotel
stays if local or state authorities had a mandatory evacuation of your
neighborhood.
If you need to leave your house because it is flooded, don't
expect the same coverage. Federal flood insurance doesn't cover hotel bills and
the like, according to the Insurance Information Institute.
KNOW THE RULES OF YOUR STATE
What the storm is called when it hits your house
will affect your coverage, depending on your state of residence. If you are in
New Jersey, for example, and the storm hits as a hurricane on the coast, but
downgrades to a tropical storm by the time it hits your house, the higher
hurricane deductible may still apply to your claim. "It was applied
state-wide in Irene," Hunter says.
For some homeowners, that could be the
final battering delivered long after the winds have died down.
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