For those unfamiliar, the insurance claim process is quite confusing. Here, we bring a scenario involving a homeowner’s desire to have a claim processed along with the most common questions asked of professionals. We hope that by dispelling these along with the responses, the issue becomes clearer and the process is not seen as daunting.

How would a leading insurance company handle a housing claim regarding payment?

A: We are providing an example of some of the top companies here. In the event that a home damage claim is filed, the company will request a repair estimate. Immediately after receiving the estimate, the company would issue a paycheck. In certain cases, when additional living expenses or temporary repair work are necessary for safety reasons, insurance may even make advance payment for the emergency situation.

It is common to see the claimant’s mortgage company written on the paycheck. Why is this so?

A: This practice is mandated by the government with respect to a large loss. The reason behind this is quite simple: because of the mortgage company’s insurable interest in repairing the home, they are issued the payment. In order for the insured to receive the financing, he must be in contact with the mortgage company.

The estimated cost of the repairs was higher than the actual payment, why is this?

A: In cases like this, the reasoning behind this follows the fact that the owner must first pay their out-of-pocket deductible before any insurance company payment is made. The deductible is then subtracted from the remaining balance of payments.

What are the variables that insurance companies use to determine if a house needs repairs instead of rebuilding?

A: The insurer first consults with a professional engineer or construction specialist regarding the risk factor involved in the repair work on the safety of the building. If there is a significant risk to the structure, the insurance company will decide to rebuild the house rather than repair it.

In the event that a house is deemed necessary to rebuild, does it have to be rebuilt in exactly the same way as before it was damaged?

A: If the insured wishes to add any changes to the building, they can do so. The insurance company pays for the restoration of the house and the policy holder pays the additional costs of the updates.

In the event that a home is deemed not uninhabitable, what does the insurance company do for the insured homeowner?

A: If the damaged home is classified as uninhabitable, the insurance company will likely help the owner’s family move to a comfortable hotel. In the event that home repairs take a long time, the insurance company will help move the family to temporary housing that has amenities similar to the previously damaged home.

Will the policyholder be denied coverage to live temporarily over time?

A: The policyholder can expect to be covered for temporary housing for the duration of the repair work on the damaged home. This applies even if the term of the owner’s policy has expired.

What does an insurance company do about protecting a home’s contents during the time it takes to repair a home?

A: The insurance company bears the transportation and storage costs during the repair period.

These and any other questions related to the homeowners claim process should be directed to an experienced independent agency.