How to Work With Your Insurance Company on a Claim

If you’re wondering how to work with your insurance company on a claim, you’re not alone. In 2021, more than 5% of insured homes had some type of claim.[1]

Whether you’re dealing with damage from wind, fire, theft, or accidents, a claim can make you whole again. But you’ll need to follow the right steps in the right way to get the money you deserve. 

Follow the Claims Process

An important part of understanding how to work with your insurance company on a claim is determining what steps are involved. While every company is a little different, most use a streamlined process to guide homeowners through the damage to the money they need. 

A typical claims process involves the following steps:

• Review your coverage. Before you file your claim, ensure that your policy covers the damage you’ve endured. Determine if your losses are large enough to merit a claim or if you should repair them independently. 
• Document the damage. Your insurance company will require both words and photos that describe what’s been lost or ruined. Keep records of everything.
• Contact your company. Reach out to your insurance agent with your proof of a covered loss. Some organizations have formal paperwork for homeowners to complete, while others take down client data in phone calls. 
• Allow inspections. Most insurance companies send professionals to homes to examine the damage firsthand and ensure claims aren’t fraudulent. 
• Accept a fair settlement. After the inspection, the company should provide a monetary amount to cover your losses. If you agree, you can get started on repairs or replacements immediately. If you don’t, you’ll have more conversations with the company until you reach an amount that works for both parties.

Let’s dig into these steps and highlight exactly what you should do when something terrible has happened to your home or belongings. 

What to Do Immediately After an Incident 

When your home or belongings are damaged, it’s critical to take action right away. The following steps are typically required to file a claim:  

1. Understand Your Policy

Two-thirds of Americans have no idea what their home insurance policy covers.[2] You may be one of them. Before you contact your insurance company, read through your insurance documents very carefully. 

Look for data about deductibles, and determine if you’ve lost more than you’ll pay before the company kicks in. Ensure that your plan covers the loss you’ve endured. For example, you may have lost thousands in a basement flood, but your policy may explicitly exclude these problems as natural disasters. 

Read all the fine print, so you’re prepared to fight for the right type of settlement. 

2. Document the Damage 

Experts like the National Association of Insurance Commissioners encourage all homeowners to complete a detailed inventory before a disaster strikes.[4] When you know what’s inside each room (with the photos to prove ownership), filing a claim is much easier. 

Take photos of what’s been damaged. Take wide-angle shots to encompass large areas (like entire rooms) that have been ruined, and use close-up shots to detail items that have been ruined or are missing. Compare these photos with those you took in your inventory, and you’ll have plenty of proof to show your insurance company. 

3. Promptly Report the Claim

Don’t delay in filing a claim. The amount of time you have to report the loss to your insurance company varies by state.[4] Missing this deadline can mean getting no money at all. Delays can also make proving that you’ve lost something much more difficult. 

Contact your insurance agent and explain that you’re ready to file a claim and have gathered evidence of the loss. Follow all instructions the agent gives you. 

4. Provide Accurate Information

Insurance fraud costs companies more than $40 billion per year.[3] All insurance professionals are encouraged to be on the lookout for people who lie, exaggerate, or otherwise make false claims. If you fudge the truth, you’re likely to get caught. 

Tell the agent exactly what happened, what’s been damaged, and how the issue happened. Be honest and truthful in every conversation. 

5. Communicate Clearly & Promptly

After your initial conversation with your agent, you may face follow-up questions, scheduling concerns, and requests for more proof. Prioritize your close connection with the insurance company. Be as responsive as you can and do everything you’re asked. Your hard work will pay off when the claim is processed and paid. 

6. Keep Accurate Records

Even simple-seeming claims can become complex with time. If you’re forced to fight an unfair-seeming settlement, accurate records could be critical.

Start a spreadsheet and record the following information:

• Dates and times of all phone calls, email messages, texts, and visits 
• The name of the person you connected with during each of these touchpoints
• What you discussed and agreed to 

7. Be Prepared for Inspection 

Most insurance companies use claims adjusters who inspect the damage and offer a sum for repair or replacement.[5] You may feel like your photos and written descriptions provide enough data to prove your losses, but your insurance company may insist on sending a person to see the damage in person. 

Ask your agent when the inspector will come and what you should do in the interim. For example, can you put plywood over a broken window? Should you mop up standing water on the floor? Ensure that you don’t fix problems the inspector needs to see to truly understand the damage you sustained. 

Understanding Settlement Offers

At the end of the claims process, you’ll start talking about money with your insurance company. The amount you’ll get is called a settlement, and understanding how to work with your insurance company on a claim ends with this step. 

Four main settlement types exist, including the following:[6]

• Replacement: The insurance company offers funds to replace or repair at current market rates. If you’re living in an older home, this option may not be available. 
• Functional replacement: The insurance company offers funds to repair the damage with modern materials to make your home functional. 
• Actual cash: The insurance company estimates the current value of your home and belongings and offers that amount in a lump-sum fee. 
• Stated: The insurance company offers a fixed amount, as stated in your policy.

If you agree with the proposed amount, your insurance company will pay your settlement.[7] The company will likely cut a check made out to both you and your mortgage company. The funds may be issued in installments, allowing you to start repair work and pay the balance when the job is finished. 

If you don’t agree with the proposed amount, talk with your agent.[8] Prepare to offer proof about why the amount doesn’t seem fair, including photos, conversations, and estimates. If you’re still not satisfied, you can contact your state’s insurance department and file a formal complaint.