What type of coverage do you need?

Orlando, Fla. --If you are offered an on-the-spot settlement check, which you can accept right away without hesitation because if you find additional damage, you may reopen the claim and file for the amount of those additional damages. 

Some policies may require claims to be filed within one year from the date of disaster. Be sure to discuss the subject with your insurance specialist.


If your home’s structure and  personal belongings were damaged, your insurance company may issue two separate checks. We’ll explain the importance of having separate checks, below.

When you submit the list of damaged belongings to your insurance company it is always very helpful to have a home inventory. It will make the claim process much easier. Even if you have a replacement value policy, the first check you receive from your insurer will be based on the cash value of the items, which is the depreciated amount based on the age of the item. Insurance companies do this to match the remaining claim payment to the exact replacement cost. If you decide not to replace an item, you’ll be paid the actual cash value amount for it considering its depreciation.

If you had flood insurance and your property was damaged because of it, as well as the additional living expenses (ALE) you incur, if your home is unlivable and you need to do repairs while being away, those will come on yet additional payments. You must ensure that the check for additional living expenses is written to you personally and not your lender, because if you have a mortgage on your house, the check for repairs could be made out to both you and the mortgage lender. Lenders usually require that they are named in the homeowners policy and that they are a party to any insurance payments related to the structure as a condition of granting a mortgage. Same thing happens if your insurance policy is for a condominium or coop.

Sometimes lenders may also put the money in an escrow account and pay for the repairs as the work is completed. Show the mortgage lender your contractor's bid and let the lender know how much the contractor wants as an initial deposit to start the job. Your mortgage company may want to inspect the finished job before releasing the funds for payment to the contractor.

Some contractors may ask you to sign a "direction to pay" form that allows your insurance company to pay their company directly. This form is a legal document, so you should read it carefully to be sure you are not also assigning your entire claim over to the contractor. It is important to be well advised by your insurance professional, because assigning your entire insurance claim to a third party leaves you out of the process and gives your contractor all the authority and control of your claim.

In the case of a total loss, where the entire house and its contents are damaged beyond repair, insurers generally pay the policy limits, according to state laws. That means you can receive a check for what the home and contents were insured for at the time of the disaster.

If you have any questions regarding your current policy or would like to make changes to it, please do not hesitate to contact one of our experts who will gladly assist.


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