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Product Reviews

Winning homeowner’s insurance claim takes time — and savvy

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Many consumers shop for home insurance once, then forget about it. Home-loss claims are uncommon to begin with, and losses tend to be relatively small.

Push comes to shove, however, on the biggest losses. In a Consumer Reports survey, the 6 percent of homeowners who had claims of $30,000 or more had the most hassles. A whopping 41 percent of those claimants had at least one problem, including disagreement over damages, disputes about coverage, delays, and slow payout. By contrast, only 19 percent of filers with claims below $30,000 hit such snags.

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To protect against huge losses is exactly why you buy home insurance. So Consumer Reports went back to the survey respondents who suffered the most to find out what advice they could offer.

Pick a top insurer. Consumer Reports’ readers judged Amica, USAA, and Auto-Owners more favorably than most other insurers on satisfaction. Amica especially stands out for earning the top spot in Consumer Reports Ratings for as long as the magazine has evaluated that service.

Prepare for a fight. And prepare long before a disaster. “Find a reliable agent or broker, and ask questions right now, before you suffer a loss,” says Justin Rubin, a retired insurance claims executive whose Long Beach, N.Y., home sustained significant damage from Hurricane Sandy in October 2012.

Ask about the house value and applicable “minimum” coverage required to get full protection in a total loss. Review the “perils” listed in the policy. Fill “exclusion” gaps with separate insurance for flood, hurricane, or earthquake, based on the threats you face in your region.

Befriend a good contractor — today. While the weather is fair, find work around your house for a trustworthy contractor, because a good one is harder to come by after a major storm.

Beware of falling trees. The standard homeowner’s policy covers damage caused by trees that fall on insured buildings on your property plus the cost of removing the tree itself, generally subject to a $500 or $1,000 limit. Know the limits of your policy. If your neighbor’s tree hits your house, your policy covers it, not theirs. If a tree falls on your car, your auto insurance pays — if you have comprehensive coverage.

Surprise troublemaker:your mortgage company. Many homeowners are surprised when their settlement check also has their mortgage company’s name on it, a fact of life that aims to keep irresponsible claimants from blowing the money in Vegas instead of repairing the lender’s collateral. So the bank will demand forms to be filled out before funds are released, often in stages as work is completed. There may be inspections of the work, and — of course — extra bank fees.

Tap buried treasure. The promise of home insurance is to restore your house to pre-loss condition. But sometimes you can do better. A number of readers were able to get materials upgrades, including wind-resistant garage doors, safety window glass, and new carpeting by paying the incremental extra cost on top of what the insurer was going to pay.

Consumer Reports writes columns, reviews, and ratings on cars, appliances, electronics, and other consumer goods. Previous stories can be found at consumerreports.org.
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