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If I File a Water Damage Claim, Will My Contents Be Reimbursed?
Navigating an issue with your insurance company can seem as fun as getting a root canal. Insurance companies are notorious for using complicated terms and fine print to make policies difficult to decipher. After you need to actually use your insurance, you might find out that you weren’t covered for as much as you had assumed you were.
Insurance companies profit by reimbursing you the bare minimum, and if you weren’t paying a higher rate for the most thorough coverage your insurance company offered, you’re probably going to find that you’re out of luck. If it isn’t too late, you should consider making adjustments to your current policy.
Reviewing and Interpreting Your Current Policy
It’s more than likely that you’ll find within your policy that your insurance company has no intention of reimbursing you for your contents you lost to water damage. If you’ve been shelling out extra cash for policy additions that specifically cover reimbursement, you’ll have one of two kinds of policies. The first, replacement cost, is the ideal scenario. The other, actual cash value, is better than nothing, though certainly not great.
Replacement cost is exactly what you need right now. If a pipe burst within your wall and ruined your wall-mounted TV, replacement cost coverage will provide you with the same amount of cash you spent purchasing the TV in question. You’ll be reimbursed exactly what you spent, so you can go out and replace the TV with one of equal value.
Actual cash value helps a little, but the system isn’t perfect. If you purchased the wall mounted TV in the example several years ago, your insurance company won’t see it as being worth what it was when you bought it. You’ve put several years of use into it. The technology isn’t current anymore. With actual cash value policies, your insurance company is going to reimburse you less than what you initially paid for the TV.
They calculate a depreciated value for the damaged items, and you’ll receive what your insurance company perceives they were worth before the water damage transpired. If you’re looking to replace damaged items with new items, you’ll be paying the difference out of pocket. If the costs of new alternatives to your damage property after you receive your depreciated value reimbursement is too high, you can always purchase things secondhand.
Choosing Policies and Understanding Limits
There are distinct advantages and disadvantages with both policies. The policy you choose should be based on your budget and your goals. How much you’re looking to spend on insurance and the type of property you want covered are also important considerations when it comes to selecting a reimbursement plan.
The least expensive plan is actual cash value. Because your insurance company isn’t going to pay out the sticker price of a new replacement when something is damaged, it won’t run you as much money every month to add the coverage to your policy.
A replacement cost plan will run you more money, but it may be worthwhile if you have a myriad of possessions that will depreciate with time, such as technology. If you have a home office, a theater room, or a lot of electronics, it could be more advantageous for you to utilize a replacement cost plan. With actual cash value, you’ll wind up spending a lot more out of pocket to replace your ruined possessions.
It’s important to note that neither of these plans are perfect. Many insurance companies have a hard maximum limit on how much they’re willing to reimburse. It doesn’t matter which policy you have or how many items are damaged. This limit, usually less than $2,000 unless specifically stated otherwise, is the most you’re going to get.
When deciding on a policy, knowing how that limit will apply to you can put a lot of weight on your decision. If the limit is abysmally low, it may not be worth it to opt for full reimbursement coverage. Over time, you could wind up paying way more than what the full value of your possessions are worth, having nothing to show for it when it comes time to file a claim.
Your only other option to protect your more expensive possessions is to have them individually appraised by your insurance company. By adding these items to your policy separately, they’ll be protected under umbrellas of their own. You’ll be able to receive the maximum amount of each item in the event that it’s destroyed. This option is a better investment, as theft and damage from sources other than water are also covered.
Dealing with Your Insurance Company
Water damage restoration companies will be able to help you navigate the labyrinth of filing an insurance claim. They work with insurance adjusters every day, and they understand the complicated foreign language that they sometimes speak. If your policy provides you with coverage for damaged items, your restoration specialists will be able to help you document and submit the damage to your insurance company.
Waiting around won’t do you any good after a water damage disaster has occurred. It’s not good for your belongings, and it’s not good for your home. If the source of the damage isn’t located and properly repaired, you’re only risking the security of the rest of your possessions – as well as the safety of your home. There’s no reason to allow a small problem to snowball into a larger one. That’s a costly and complicated mistake.
Restoration Local aims to help homeowners who find themselves overwhelmed with the burdens of water damage. Available 24 hours a day, 7 days a week for assistance with water damage recovery, we’ll be able to pair you up with a certified water damage restoration specialist who can help you get the ball rolling on the process. With a free estimate, you’ll understand what you’re getting yourself into. The sooner you call us at 1-888-443-3110, the sooner you can get back on the right track.