I Filed a Homeowners Insurance Claim. What Happens Next?

Step 4: The Property Is Inspected

The scope of the inspection depends on the type of loss.

For a hail or wind claim, the inspection may include:

• Roof slopes;
• Shingles or metal roofing;
• Gutters and downspouts;
• Vents;
• Flashing;
• Siding;
• Windows and screens;
• Fencing;
• HVAC equipment; and
• Interior water damage.

For a water claim, the inspection may include:

• The source of the water;
• Plumbing components;
• Flooring;
• Drywall;
• Cabinets;
• Insulation;
• Moisture readings; and
• Areas where water traveled.

For a fire claim, the inspection may include:

• Fire-damaged areas;
• Smoke and soot;
• HVAC systems;
• Personal property;
• Structural components;
• Emergency services; and
• Areas potentially affected beyond the immediate fire origin.

For foundation or structural claims, the carrier may involve an engineer or another specialist.

The Field Adjuster May Not Make the Coverage Decision

This is another common misunderstanding.

The field adjuster may inspect the property, prepare an estimate, take photographs, and report observations.

But the desk adjuster or another carrier representative may make the ultimate coverage decision after reviewing:

• The inspection;
• The policy;
• Photographs;
• Estimates;
• Expert reports;
• Prior claim information;
• Weather data;
• Statements; and
• Other evidence.

That is why what the field adjuster says during the inspection is not necessarily the final answer.

Statements like:

“This looks covered.”

“I see hail damage.”

“I’ll put it in my report.”

“This should be replaced.”

may be encouraging, but the carrier’s formal coverage position typically comes later.

Document the Property Yourself

Do not rely solely on the insurance company’s inspection.

Take your own photographs and videos.

Document:

• The damaged areas;
• The source of the loss if known;
• Interior damage;
• Exterior damage;
• Damaged contents;
• Emergency repairs;
• Removed materials;
• Water lines or staining;
• Roof conditions when safely possible; and
• Other relevant evidence.

If you have photographs from before the loss, preserve those too.

Conditions change.

Water dries.

Damaged materials are removed.

Roofs are repaired.

Debris gets discarded.

Your own documentation may become extremely important if a disagreement develops later.

Step 5: The Insurance Company May Prepare an Estimate

Many property claims are estimated using Xactimate or another estimating platform.

The estimate may include:

• Labor;
• Materials;
• Quantities;
• Measurements;
• Removal and replacement;
• Taxes;
• Depreciation; and
• Other applicable items.

But remember:

An insurance estimate is still an estimate.

It is not necessarily the same thing as a contractor’s actual repair proposal.

A contractor may identify additional work, different quantities, code-related items, access issues, or other costs not included in the carrier’s initial estimate.

That does not automatically mean the contractor is right and the insurance company is wrong.

It means the competing scopes and estimates may need to be compared.

Why Your Contractor’s Estimate Can Matter

A detailed contractor estimate can help identify differences between what the carrier allowed and what the contractor believes is actually necessary to complete the repairs.

Useful contractor documentation may include:

• A detailed scope;
• Measurements;
• Photographs;
• Material specifications;
• Repair methodology;
• Pricing;
• Code requirements where applicable; and
• Explanations for items omitted from the carrier’s estimate.

A vague lump-sum proposal may be less useful when trying to identify exactly where two estimates differ.

The more detailed the documentation, the easier it is to understand the dispute.

Step 6: The Insurance Company Makes a Coverage Decision

After investigating the claim, the carrier may:

• Accept coverage;
• Accept part of the claim and deny another part;
• Request additional information;
• Issue payment;
• Apply a deductible;
• Withhold depreciation;
• Apply a sublimit;
• Rely on an exclusion or endorsement; or
• Deny the claim.

Read the coverage letter carefully.

If the carrier denies or limits coverage, identify the actual policy language it cites.

Common issues may involve:

• Wear and tear;
• Deterioration;
• Prior damage;
• Cosmetic damage;
• Repeated seepage or leakage;
• Water backup;
• Flood or surface water;
• Faulty construction or maintenance;
• Roof-payment schedules;
• Actual-cash-value provisions; or
• Other exclusions, limitations, and endorsements.

The wording of your actual policy controls.

What Happens When the Claim Is Covered?

If the carrier accepts coverage, the amount paid may still differ from the total repair estimate.

Several things can affect the initial payment.

Your Deductible

The deductible is generally the portion of the covered loss you are responsible for under the policy.

Depending on the policy, you may have:

• A flat-dollar deductible;
• A percentage deductible;
• A separate wind or hail deductible;
• A named-storm deductible; or
• Another deductible structure.

Check the declarations and applicable endorsements. The Texas Department of Insurance explains how homeowners deductibles work.

Depreciation

If the policy initially pays on an actual-cash-value basis, depreciation may be deducted from the replacement cost.

Some depreciation may be recoverable after repairs are completed, depending on the policy.

Other depreciation may not be recoverable.

Again, the policy language matters. The Texas Department of Insurance explains roof coverage and actual cash value.

Mortgage Company

If you have a mortgage, the payment may include your mortgage company as a payee.

That can require you to work through the lender’s loss-draft process before funds are released.

This can be frustrating, but it is common.