An easy breakdown of insurance claims

Contacting the insurance company - Each insurance company has a Claims Department, usually available 24 hours a day. This is where a new claim should be filed. An insurance agent can file the claim on behalf of a customer. There is only one piece of information needed in order to file a claim (aside from the basic contact info). That would be, the date that the damage occurred. At this point of the phone call the claim is made. A claim number and a Property Adjuster will be assigned. The adjuster will call the owner, usually within 24 to 48 hours, in order to set up an appointment. At this appointment the adjuster will evaluate the damaged property. It is recommended that an experienced contractor is present while the adjuster makes their evaluation.

Estimate - After the adjuster makes their evaluation, they will create an estimate for all repairs. Some adjusters can make this estimate while at the property. More commonly, others will do this work at their office and will mail the estimate. The estimate is created using a detailed software program. This program has 'area' and 'date' specific pricing for most types of building materials and labor requirements. The estimate will have line items to indicate exactly what is being paid for, and at what rate. A typical roof estimate will have 6 to 12 line items, depending on the nature of the roof. The estimate will always have a Summary area. This will show; the estimate grand total, the deductible applied, the depreciation withheld.

Payment - The first insurance payment is made to the owner at the time the estimate is given. This payment is NOT the full amount owed by the claim. The depreciation amount is recoverable in most cases. Any policy with "Replacement Cost" coverage (the most common type of homeowner insurance) will have a depreciation payment available. This payment is explained further in the following paragraph. The first payment is called the ACV or Actual Cash Value. The insurance company uses a formula to determine the ACV amount. This formula is based on the age of each item to be repaired. The older the item, the lower the ACV. The following is an example. Many roofs have a 30 year life expectancy. If a 30 year roof needs replacing at year 15, then the depreciation factor would be 50%. For example purposes we'll say that the deductible for a new roof is $1,000. We will also say that the adjusters estimate for the roof replacement is $10,000. The ACV would be; $10,000 minus $5,000 (the 50% depreciation) minus $1,000 (the deductible) equals $4,000. The second insurance payment is explained in the next section.

Invoicing - After the repairs have been made, a final invoice will be sent to the insurance company. This is important for two reasons. First, they need to be informed that the repairs were actually made. An insurer may drop coverage on property which does not get repaired. Also, a final invoice is needed in order to have Recoverable Depreciation released. From the example above, the final invoice should be for $10,000 in order to recover the $5,000 depreciation. Once the owner receives this second payment, the balance for the roof work can be settled. This final step of the claim is often mishandled. Some owners may even get cheap repairs for being unaware that the depreciation funds would be available. Square Roofing Company is an expert at the insurance claims process.