1. FEMA only pays for temporary living expenses
If a home is destroyed in a storm that is later declared a disaster by the federal government and grants are made available, claims still need to be made through the homeowner's primary insurance company.
Policyholders should understand that their home insurance is their primary source of coverage. FEMA only pays after insurance. For example, when Superstorm Sandy hit the east coast in 2012, FEMA determined that there was enough damage to make an 'individual assistance' declaration and they provided grants to homeowners to help them with temporary living expenditures such as finding food and shelter, etc. These grants were not intended to rebuild their homes," says Marini.
2. One storm can be categorized as multiple events requiring separate deductibles
When the tornadoes hit Oklahoma City in May 2013, many homes were destroyed. For those homeowners who sustained property damage, what seemed like one large storm was labeled by their insurance companies as multiple tornadoes. Why does this matter? Because multiple tornadoes require separate deductibles.
One of the biggest issues Oklahoma had, in this instance, was that from May 19 to May 31, there were tornadoes that were constantly happening and the rain didn't stop. "A lot of people had additional damage on May 31 because their roof was torn open on May 20. The reason why this matters is that some insurance companies are starting to call these separate storms and are applying two deductibles. Homeowners should be aware of this when saving up funds for emergencies," says Alice Young of public adjusting firm Brown - O'Haver in Oklahoma City.
3. There is a 30-day waiting period for flood insurance to kick in
Many people may not be aware that flood insurance is something that you have to purchase separately from your regular home insurance policy, says Stephen Figlin, senior vice president of Young Adjustment Company in Philadelphia. He notes that the National Flood Insurance Program (NFIP) is administered by a group of insurance companies that were selected by FEMA to manage the program.
If there's a storm approaching, it's already too late to buy flood insurance. There's a 30-day waiting period after the purchase before the coverage actually takes effect.
4. Catastrophe claims take a long time
When storms hit, almost every homeowner affected files insurance claims immediately following the event. This means that insurance company adjusters are inundated with claims, phone calls and questions.
"In emergency situations, people have to understand that due to the large volume of claims that can happen at one time, it sometimes takes longer than usual for insurance professionals to arrive on the scene, work with them and turn around results," says Figlin. "Although these can be very stressful events for consumers, I advise homeowners to be patient with the process."
5. Have a reputable contractor on your team to meet the insurance adjuster
You as a homeowner may see damage differently than a contractor. Contractors are trained to understand each piece of your property. They will defend you and show them damage that could of initially been missed. Most general contractors are very well versed with insurance companies and know how to walk you thru the entire process.
6. Catastrophe adjusters can change frequently so document everything
During catastrophes, insurance companies may send in large teams of adjusters to deal with the high volume of claims. Catastrophe adjusters are often not permanent employees of the insurance company but rather contractors who are hired on a loss-by-loss basis to handle weather disasters across the nation. For that reason, they may only be available for a short time.
"Unfortunately, catastrophe adjusters may move on to other areas or go back home before claims are closed and then homeowners have to start again when the next group of adjusters arrives on the scene. This can be very frustrating for consumers. I recommend that homeowners keep their own files and document everything, including who they have spoken to and what they have been told. This way, they won't have to start from ground zero every time their file changes hands," says Papa.
7. Volunteers can remove items and make it hard to get claims paid
Removal of debris by volunteers can be a major problem when it comes time for homeowners to submit property inventories to their insurance companies. Young said that after the tornadoes hit Oklahoma, volunteers from all over the world came to help those who were affected by the storms. Although their intentions were good, some volunteers threw away damaged items that had not yet been accounted for by homeowners.
8. Many people are under-insured for storm damage
A large percentage of homeowners hit by recent hurricanes, tornadoes, hail storms and wildfires were underinsured. It is very important to review your policy and understand what will be covered in these situations.
"We have found that many homeowners are not able to rebuild after weather disasters because their policies weren't large enough to cover the costs," said Bach. "In United Policyholders' '2012 Colorado Wildfire One-Year Survey Results for the High Park and Woodland Heights Wildfire,' 54 percent of survey respondents reported being underinsured on their dwelling by an average of $101,000. I recommend that homeowners get at least two opinions about the replacement value of their home for purposes of setting adequate dwelling limits so they can make sure that their policies will cover the cost of rebuilding if disaster strikes. Be careful about relying 100 percent on the number set by your insurer."
9. Wildfires are treated like regular fires
A fire is a fire. Insurance policies don't differentiate between wildfires and, say, kitchen fires.
"They're considered the same thing. The problem is that most [wildfires] are total losses," says Scott deLuise, president of Matrix Business Consulting.