We get this question a lot. For clients with hurricane damage it is probably the most important question. Most homeowners have no idea exactly how much it will cost to repair the damage wind caused to their home and how much of the repairs the insurance company will cover. This means they also likely have no idea whether the settlement their insurance company is offering is fair. While every home and situation is different, it may help to know about these three things that will typically determine how much your settlement should be so you can determine whether your insurance company is offering a fair payment for your damage:
- Your Wind Coverage. Ask your insurance company or your insurance agent for a complete copy of your policy—not a specimen or just the declarations page and endorsements, but the complete policy—and read it. Carefully. Some wind policies will only pay for the actual cash value of your damaged dwelling or contents. Meaning, what your property is worth as it sits today: worn, used, or damaged. Other policies will pay for the replacement cost value, meaning what it will cost you to replace or repair your worn or damaged property, but only after you actually make the repairs or replacements and can prove the costs you incurred, i.e., by showing receipts or paid invoices. With respect to damage to the interior of your home (sheetrock, flooring, contents, etc.) caused by incoming rain, many policies require proof that wind caused an opening in a roof or wall that allowed rain to enter. This provision often leads to a heated dispute over the cause of interior water damage and whether it is covered. Note that flood coverage is typically covered under a separate, National Flood Insurance Program (NFIP), policy that is different than your wind policy.
Your Deductible. With the number of hurricanes that have hit the Gulf Coast in the last fifteen years, insurance companies often write policies with very high hurricane deductibles, typically between 1% to 5% (if not greater) of the limit of coverage for your home. Meaning, if your home is covered up to $200,000.00 and your hurricane deductible is 2%, you will have to reduce your settlement by the applicable $4,000.00 deductible. This can have a significant impact on the value of your settlement.
- Your Damage. Every home is different. The repairs, materials, and services needed to restore your home to the condition it was in before the hurricane will not be the same as your neighbor's. Also, every home is filled with different items—different beds, washers, dryers, cooktops, clothes, paintings, rugs, etc. The actual cash value of your property and the cost to replace or repair it all—every wall, window, and appliance—is often not something a typical homeowner can accurately estimate on their own. It usually requires years of experience and training in the construction industry and familiarity with building codes and regulations. Insurance companies often capitalize on your shortcoming in this manner by asking you to prepare a sworn proof of loss which is essentially a request that you estimate your own damages, a difficult and arduous task that you should not take on lightly or without assistance.
If you are working with your insurance company to reach a settlement over your hurricane damage and you are unsure what your settlement amount should be, or your insurance company has asked you to prepare a sworn proof of loss of your damage, you should seek help. Settling, or submitting a sworn proof of loss, for less than your claim is worth can have a devastating impact on you and your family's ability to repair your home and get back on your feet after a hurricane. We can help. Our experienced attorneys have been helping with hurricane insurance claims since Hurricane Opal in 1995. We know how to talk to the insurance company and advocate for you and we never charge any fee or cost to simply sit down with you, review your insurance claim, and answer your questions. Contact us today for a free, no-cost, no-obligation consultation.