June 09. 2018 8:57PM

Marc A. Hebert's Money Sense: What to know when filing homeowner's insurance claims


Many companies will pay for removing trees that landed on your home but not those landing on your lawn. Destruction to shrubbery may also not be covered. Be sure to understand your policy. (Metro Creative Connection)

Whether your home was damaged by a major storm or whether it was spared, it is important to know what to do and what to expect when you file a claim for losses under your homeowner's insurance policy.

Perhaps you have paid premiums for years, just in case of a disaster. Now is the time to make certain that you will be properly compensated in the event of a loss and have what you need to return your family's life back to normal. It is well worth it to consider the following suggestions:

Start before you need to file a claim. Understand the provisions of your policy and what it does and does not cover. Consider if the coverage is adequate and the types of coverage you might need. For example, homeowner's insurance doesn't cover flood damage. If you need this type of coverage, now is the time to secure it. Take videos or otherwise document the contents of your home and store the files off site or in the cloud.

Filing a claim. Contact your insurance agent or company to report damages promptly. There could be time limits to doing so. Confirm that the policy's terms cover the loss. Also verify the deductible. If the loss is lower than the deductible, you may not want to file a claim. Obtain estimates for repairs. Ask how long it will take to process the claim.

Fill out claim forms. Your insurance company should send you all the necessary forms. Fill out the forms that you will receive with descriptions of the damaged items, dates of purchase, costs, and replacement costs. Prompt returning of the filled in forms will avoid delays in settling your claim.

Report a crime. If there has been a crime, report it to the police. Get a copy of the police report and keep records of all the law enforcement officers you spoke with. Your insurance company may need this later.

Make temporary repairs. Photograph or video record the damage, then take reasonable steps to protect your property from further damage. Keep damaged items to show them to the insurance adjustor. Save receipts. Your insurance company may reimburse you for the costs later.

Prepare for the adjuster's visit. Be prepared to show the adjuster the damage. Provide the adjuster estimates of the repair bills. Show the adjuster the receipts and invoices for any temporary repairs you may have made. Keep copies of all documents.

How much you may get. This depends on the type of policy. Replacement-cost policies provide you the amount needed to replace damaged items with one of equal quality. Actual cash value policies pay what's left after deducting depreciation from the replacement cost. This is often very little.

Temporary quarters. If you and your family have to live elsewhere until your home is repaired or replaced, your company may pay you for loss of use. Be sure to keep adequate records of these costs.

Water damage. Homeowner's polices don't cover flood damage but may cover other kinds of water damage such as that from burst pipes and leaky plumbing.

Trees and shrubbery. Many companies will pay for removing trees that landed on your home but not those landing on your lawn. Destruction to shrubbery may also not be covered. Be sure to understand your policy.

Tax implications. For tax years 2018 through 2025, the personal casualty and theft deduction on federal tax returns will no longer be available, except for casualty losses that occur in a federal disaster area. This means that a taxpayer may only claim a personal casualty loss as an itemized deduction if the President declares the crisis causing the damage as a federal disaster. Read IRS Publication 547, "Casualties, Disasters, and Thefts" on the IRS website www.irs.gov for more information on tax-eligible damage.

Marc A. Hebert, M.S., CFP, is a senior member and president of the wealth management and financial planning firm The Harbor Group of Bedford. Email questions to Marc at mhebert@harborgroup.com. Your question and his response might appear in a future column.