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Understanding the Settlement Process of Your Property Damage Claim

Understanding the Settlement Process of Your Property Damage Claim


After filing a property damage claim with your insurance company, obtaining a settlement can be a long and arduous process with complex rules and extensive paperwork. Even when insurance companies agree to settle, it’s not as simple as receiving a lump sum for your agreed-upon amount. Understanding the claims process can help you be ready for each next step and be aware of any complications that may arise.

If you’re looking to make a property damage claim, a property damage lawyer from Nessler & Associates can help you better understand the processes and complications that can arise when receiving your settlement. Your attorney can guide you through the steps and ensure that your insurance provider produces proper and swift compensation.

Step 1: Adjusting Your Claim

When you can return to your home, contact your insurance company about meeting with a claims adjuster. They will inspect your home to create a monetary value for repairing or replacing the damage. Three things typically happen after this:

  • Receive a check as an advance against the total amount. The rest of the payment will come after.
  • Be offered an immediate settlement quote. If the amount is reasonable for you, you can accept. In the event that you find damage to your home later on, you may reopen and file for an additional amount. Typically, you’ll be required to file a claim within a year of the incident.
  • Receive two or three separate checks based on circumstances. The first check will be for the home’s structure, the second will be for any personal belongings that may have been damaged, and the third is for additional living expenses if you cannot live in your home during repairs.

Step 2: Dealing with Your Mortgage

If your home is mortgaged, any settlements paid will have your mortgage company listed as payees on most settlement checks. This gives the mortgage company control of how the funds are released to you.

The mortgage company will likely ask for documents such as the license and a signed contract from the contractor performing repairs to the damaged property and may want to inspect the property after repairs before the funds are released to the construction company or contractor.

Step 3: Selecting and Paying for a Contractor

Finding the right contractor to repair your home is a crucial step in the settlement process. You can find a contractor by asking friends and family or checking with your local Chamber of Commerce, Better Business Bureau, or Home Builders Association. Make sure they are licensed and have insurance coverage.

If a natural disaster caused your property damage, it’s common for professionals to go door-to-door in the damaged areas to offer clean-up or repair services. Some businesses are reputable and willing to help those in need. Others are not. Dishonest contractors or scam artists will pocket the payment without intending to do repairs or will use inferior materials that will leave your home not up to code and possibly a hazard.

If your home is mortgaged, you may need to get the contractor cleared by your lender before moving forward. While this is a long and sometimes annoying process, the lender wants to ensure the home will be adequately repaired and won’t have problems in the future.

Many of the funds paid to the contractor will also come directly from the mortgage company via your settlement check. You may need to sign something with the contractor or construction company that allows the mortgage or homeowners insurance company to pay them directly.

Step 4: Receiving Payment for Personal Belongings

You will typically need to do two things to receive full reimbursement for any personal belongings. First, you must submit a list of your damaged items to your insurance carrier to show the cash value of your items, even if you have a replacement value policy. The value of your items should be the replacement cost and not the price you paid for them, as it may have increased.

Secondly, most insurance companies require you to purchase replacements for your items before receiving compensation and provide proof of purchase within a set timeframe.

You may need to contact your bank or credit card company to show proof of purchase for any high-value items you claim. Also, most insurance companies provide 50-70% of the amount of insurance you have on the structure of your home for personal belongings. So if you have $100,000 worth of insurance on your home’s structure, you have $50,000-$70,000 worth of coverage for your belongings.

homeowners insurance

Contact a Property Damage Attorney Today

Claim settlements are difficult to navigate but can be even harder to deal with after the stress of the significant losses that necessitate them. If you need help with a property damage claim, contact Nessler & Associates now at (800) 727-8010 for a free, no-obligation legal consultation.

Our property damage attorneys understand the complexities of a property damage claim. By handling your insurance claim from start to finish, we can give you the assurance and peace of mind you need to recover after a devastating loss.

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