Some great information on homeowners insurance issues from our friends at Douglas Elliman:
The following includes information regarding damage control immediately
following Hurricane Sandy. Erik Braunitzer is a writer for Douglas
Elliman, brokers for NYC, Long
Island and Westchester Real Estate.
Waking up after Sandy, many
people in the Northeast are left with a devastating truth: their homes are gone
or flooded beyond repair. Some of these homeowners may not be ready for the
awful truth that comes next. They may not get their homes back. The truth is
homeowner's insurance usually excludes flooding and hurricane damage. If you
don't know the ins and outs of your policy before a destructive storm, it will
be too late to change your policy later to cover these gaps. Most often, these
following areas cause the most issues after devastating destruction.
1. Replacement Value
Replacement value or cost is
listed in your homeowners policy and means the value of the loss at the amount
it costs to replace an item. For example, if you have property in your home,
such as a home computer, you may think that you will get a brand new computer
with same features at the original price. However, unless your policy states
this exactly in your insurance policy, losses are valued at what they were
worth in the condition before the destruction--in this case, a five-year-old
computer may only have a value of $200. Replacement-cost-value clauses should
always be included in your policy.
2. Flood Insurance
Homeowners insurance policies
usually exclude flood coverage, as well as hurricane cover and earthquake
coverage. Whatever the cause, floods happen, particularly because of exploding
pipes and the amount of rainfall in a hurricane. Floods are actually the most
common reason for damage to the home. Some insurance companies include some
types of flood coverage. If you live an area susceptible to flooding or if you
want to be sure you are covered, adding flood coverage can save you from a lot
of financial stress.
3. Negotiating Valuation of Loss
One of the first things that
people do after a damaging hurricane is call the insurance company to file a
claim. After you file a claim, an appraiser comes to the property and assesses
the damage. These appraisers do not work for you. They work for the insurance
company. They are looking for the minimum that the insurance company will have
to pay in order to meet its obligations. However, you do not have to take that
valuation as final. If you can prove the loss is significantly higher,
negotiate a settlement with the company. To prove your claim however, you need
to take pictures of damage and loss of valuables, as well as keep receipts for
repair costs.
4. Hotel Stay or Rental Coverage
If you have this in your policy,
it will be listed as "loss-of-use" coverage. This means that the
insurance company pays to place you in a hotel while work is being completed on
your home, if it is uninhabitable. Not all policies include these types of
provisions and others have limitations, such as a maximum per day amount or a
time limit for how long expenses are covered. To avoid the out-of-pocket living
expenses after a hurricane, ensure that you have loss-of-use coverage.
