From the ruins I will rebuild it and restore its former glory.
From the ruins I will rebuild it and restore its former glory.
Filing and navigating an insurance claim can be confusing. The team at Phoenix is very familiar with the storm damage insurance claim process, and we can help you better understand your paperwork and policy. While Phoenix Restoration is not a public insurance adjuster, (in most states it’s seen as a conflict of interest and therefore illegal to be both the public adjuster and the contractor on the same claim) we are able to discuss the scope of repairs on the insured’s behalf with your insurance adjuster. Public Adjusters have fees for their services. If a public adjuster is needed, there are those in our network with whom we are familiar working with. Below is an outline of how a typical insurance claim is filed and the different stages an insurance claim goes through. This section is filled with helpful tips, knowledge, and direction.
a: If you are sure that you have storm damage to your property, contact your insurance company and get an insurance adjuster scheduled to come inspect your home.
b: If you’re not sure your home has suffered damage or if you’re unsure if an insurance claim is warranted, contact Phoenix Restoration for a free roof inspection.
After verifying that your home has significant enough storm related damage, a Phoenix project manager will help you file your insurance claim to relay all the relevant information about the damages, any specific challenges the assigned adjuster might encounter, and any other relevant information to avoid the rescheduling of the appointment e.g. needing a two story ladder or any special equipment to inspect steep roof slopes. (Adjusters come in all sizes, shapes, and ages) as well as give our company information as the assigned contractor to streamline coordination on the rest of the claim.
The claim filing process will in most cases take roughly 5-10 minutes to complete.
You will need the date and approximate time that the storm damage occurred, along with your policy number. (Or a phone number attached to the policy that the operator can use to look your policy up.)
All insurance providers have a claims hotline to speed up the claim filing process. (This is the method we use on site) You do not need to contact your agent if you do not wish to do so. Most insurance companies also have a way to file online through their respective websites. If you have a specific way you’d like the insurance company to reach out to you during the claim process, you can give them a preferred method of contact during any one of these three ways to file a claim.
Once the claim is filed through your insurance providers’ claim department you will be issued a claim number.
The claim number will be a reference point for your entire claim process. Any correspondence with the insurance company about the claim will require this number. This is how the insurance company finds your specific claim in their system. This number will also be listed on all documents you receive concerning the claim from both Phoenix Restoration and the insurance company.
Once the claim has been filed, typically within two business days, an insurance adjuster will be assigned to your claim.
After the adjuster has been assigned, the adjuster is required to contact you (through your preferred method of contact) within 48 hours to set up the adjustment date and approximate time of their inspection. If they need access inside the house to inspect for any reported interior damage, you can request a time of day that is convenient for you. If the inspection is only to the exterior of the property, you are not required to be there. If there is a dog out in the yard with no one home to secure them, the adjuster will likely reschedule the adjustment date to the end of their appointment calendar.
This adjustment date is usually scheduled within 10 days of the adjuster being assigned but can sometimes be set out up to a month. On occasion, adjusters will schedule appointments on Sunday’s and holidays.
Upon making your appointment or receiving the date and time of the inspection, make sure to contact Phoenix or our project manager with that information so we can get the appointment in our calendar. If there’s a high volume of claims in the area, scheduling can become an art. Short notice appointments can sometimes become difficult to meet.
The insurance adjuster is a representative of the insurance company and will naturally tend, to some degree, to have the insurance companies’ best interest in mind.
It’s beneficial to have your own representation present during the adjustment process.
During this inspection the adjuster will be looking for items that are a direct physical loss as a result of the storm. The adjuster usually won’t be looking for things subsequent to the direct physical loss. This typically takes place later in the process.
As your representative: We don’t get to make a decision for the adjuster in determining what’s damaged, and we don’t get to make a decision for the adjuster in extending coverage. Unfortunately, that’s at the sole discretion of the insurance company.
We can however point out any damage we see for their consideration, and discuss what they see, if they’re willing to talk with us about it.
If the adjuster confirms that they’re going to replace something, we can talk about plans, specifications, codes, laws, rules, regulations, and industry standards for workmanlike construction and repair. Often, we’ll have to submit documentation of these items later on in order to be approved and upheld.
Sometimes an adjustment is a straightforward and easy approval and other times we know that it’s just the first meeting of many.
Being that the insurance company has the only right to say yes or no, we’re always playing from behind. They get to approve or deny, and any contractor who says or intimates otherwise is being less than honest. There are powers that we as contractors just don’t have.
If they want to approve it, they will. If they want to deny it, they will. These are both scenarios that we’re well versed in handling.
These days, many insurance companies are hiring third parties to do the inspection for them. Meaning that the adjuster that’s on the property doesn’t have the authority to confirm or deny coverage or the authority to discuss what’s damaged. A third-party adjuster once said to me “Yeah, I can’t answer that, I’m basically just a glorified picture taker.”
In this situation, the third-party adjuster silently takes a bunch of photos and then sends them to the actual decision maker, the desk adjuster. We don’t get to find out for a week if it’s approved or denied.
For these reasons, we go in preparing for what comes after the adjustment.
If they don’t want to approve the damages at least we know what they were looking at. We’ll have photos of what they marked and didn’t. And we’ll know what their attitude was about it. This places you, and us in the best possible position moving forward.
Our goal is that they approve the claim, whether they do it right away on their first visit or not.
While it’s not ideal, at the very least we want them to agree that the property was in-fact hit by a storm and did sustain some damage as a result.
Admitting that there is one damaged item is vastly different than saying no damage at all.
The adjuster and the project manager will inspect the entire perimeter of your property, the roof, and any reported interior damage. As well as any outbuildings and personal property in the yard that may have suffered damage.
This process takes an average of one hour to complete.
Upon approval of any damaged items found during the insurance adjustment, the insurance adjuster will create a scope of repairs intended for Phoenix Restoration to use as a point of reference in getting the exact items listed replaced or repaired.
Up to this point we don’t 100% know exactly what they’re covering and what they’re not.
Once this paperwork is in writing, it’s legally binding, meaning the insurance company is legally compelled to honor it. There are no takebacks.
Phoenix will use this paperwork as the basis of any arguments, technicalities, laws, ordinances, etc. to get any warranted items added to the scope of repairs. (See our section on Maximizing an Insurance Claim)
This paperwork and first payment usually arrive between 7-12 business days through the mail.
As an alternative, the scope of repairs can come as an email much more quickly and the first check will still come by way of the post office.
On the seemingly rarest of occasions, a staff adjuster will write a scope of repairs and print a check on site immediately following the adjustment.
It is very important to get a copy of the paperwork to your project manager as soon as you have it, in order to expedite the rest of the claim process.
Again, sometimes the initial scope of repairs is closer to full and complete, and other times it’s more barren. We just don’t know.
If the scope is incomplete, the process to fully indemnify you can take anywhere from a few days, a few weeks, to months. There’s a lot of variables.
The quicker we can begin to examine, devise, and implement our strategies to expand the scope of repairs, the better.
If the scope of repairs is comprehensive, we will hold your place for job scheduling. If your claim has several trades or a lot of complexity, we will begin drawing up a timeline of coordinated scheduling. At this point we’ll want to sit down with you to go over products, materials, color selection, and draw up the building contract and projected schedule. This process can take 30 minutes to an hour. Of course, making a decision on your long-term vision for your home can sometimes take some deep consideration. We can also leave you with samples and coordinate electronically. At Phoenix we have remote options for every part of the process that’s currently possible. (We still don’t have computers or robots that can build the roof.)
Nearly every full and complete insurance scope of repairs is still missing at least one item. Usually code related items. Being insurance companies are mostly national companies; they just leave regional and local codes up to those who work there. Which is fair, I can’t imagine a data base with every set of HOA rules across the country listed out. They instead require that we send in documentation to show that your particular state or province requires that item or method.
And of course, there may be extra items that were discussed at the time of the adjustment but were still missed on the scope of repairs.
There may also be the addition of subsequent repairs incurred as a result of a direct physical loss that were not apparent at the time of the adjustment.
E.g.
If the roof felt had to be changed but was previously installed beneath the drip edge, then the drip edge would have to be carefully removed and put back or replaced entirely in order to remove and replace the roof felt.
Different systems of a house are designed to be independent of each other. Previous alternative construction methods, while still functionally correct, can sometimes deeply intertwine those systems. These situations end up beneficial to the policy holder during an insurance claim.
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Every storm related insurance claim can be paid out in a number of checks (usually between 1-3) according to what type of policy you have.
Payments are as follows:
1. Actual cash value payment (paid immediately after the claim is approved),
2. Depreciation payment (paid upon fulfillment or completion of the scope of repairs)
3. (If applicable) any additional payments are paid out as Supplements (also paid upon fulfillment or completion of the scope of repairs)
(for more about supplements, see our section on Expanding The Coverage Of An Insurance Claim)
Insurance payment totals are split between two columns.
Actual cash value payment amount vs. Depreciation payment amount.
These payments are calculated based on a percentage of:
How old the damaged item is vs. its expected lifespan.
The newer (has many years left in its lifespan) the roof (damaged item) the higher the ACV column amount will be, and the lower the Depreciation amount will be. E.g. (Newer damaged item: 90% in ACV and 10% in Depreciation)
If the damaged item is older (nearing the end of its lifespan) then the ACV column amount will be lower and the Depreciation amount will be higher. Eg. (Older damaged item: 10% in ACV and 90% in Depreciation)
Those two numbers (ACV+Depreciation) would still sum up to the same amount no matter if the damaged property were new or old. (90+10 and 10+90 are both still 100)
Age only matters to determine how much goes in each column (Actual cash value column or Depreciation column)
**Which columns you are eligible to collect from is determined by what type of policy you have (ACV or RCV).**
Every (ACV policy) storm insurance claim is usually paid out in a single check. The Actual cash value payment is the only payment (the only column that you are eligible to collect from).
ACV policies are not eligible for Depreciation payments and are not eligible for most Supplement payments.
ACV policies will therefore have expected lower insurance payouts due to the calculated Depreciation being non reimbursable. For this reason, ACV policies can have larger and sometimes substantial out of pocket costs for repairs.
To reiterate on ACV policies:
The first payment: Actual Cash Value payment (ACV) is issued along with the first set of paperwork immediately after the claim is approved.
If the damaged property being covered by insurance is 1 year old (in it’s usable lifespan) then the depreciation payment is almost a negligible amount. If the damaged property is 100 years old (in its usable lifespan) then the depreciation payment is almost all of the funds in replacing it.
An ACV policy is great in the 1 year scenario and completely worthless in the 100 year scenario, due to the fact that the calculated Depreciation is non reimbursable.
Out of pocket costs are expected.
A Replacement Cost Value (RCV) policy makes the age of the damaged property irrelevant in getting it replaced.
Replacement Cost Value (RCV) is treated as: The market value of your entire project as of the date in which the project was completed. Insurance ultimately pays (if it’s actually replaced) what it costs to replace your damaged property with a like kind and quality (equivalent material) today.
While the payments can still be tilted towards one column or the other, the insurance is responsible to pay for the entirety of the cost of replacement outside of your co-pay (policy deductible) no more, *no less.
*No less is one of the most commonly misunderstood parts about home property claims, probably because auto claims work slightly differently. If the insurance company says the RCV of a home claim is $10,000, it means up to $10,000, if you try to cut corners and get it done for $9500, they pay $9500.
There are other ways to turn an insurance claim into usable cash flow while legally satisfying the insurance obligations if that’s something you’re looking to do. (See our section on financing)
To reiterate on RCV policies:
Every (RCV policy) storm related insurance claim is paid out in a minimum of two payments. However, it’s not uncommon to receive more than two payments.
The first payment: Actual Cash Value payment (ACV) is issued along with the first set of paperwork immediately after the claim is approved.
The second payment: (Depreciation payment) is issued once the job is complete and a final invoice for up to the approved RCV value is sent to the insurance company by Phoenix Restoration.
Any additional payments: are first approved by the insurance adjuster and are considered Supplemental items (see our section on Expanding The Coverage Of An Insurance Claim) and will be added to the total replacement cost value of the claim in the form of Depreciation and sent out as a single payment. On rare occasions the Depreciation payment and Supplement payments are sent out separately.
There are no out of pocket costs to fulfill or complete the approved scope of repairs outside the policy deductible.
Nearly 100% of homeowners have an RCV coverage policy on their personal home.
ACV coverage policies are slightly more common on single family investment homes (Rental Properties)
*Phoenix Restoration does not require any payments to be made until your materials have been delivered to your home.*
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The policy deductible can range from $250-$5,000 or more.
Most deductibles are between $1,000-$2,500.
The most common deductible for a storm related claim is $1,000.
The Replacement cost value (RCV) will first be calculated by the insurance adjuster. That number will be put into two columns: Actual cash value and Depreciation. The policy deductible (your co-pay) will be removed from the ACV total before the first check is sent out.
E.g.
The RCV total of the claim is $10,000.
Your policy deductible is $1,000.
The Actual cash value was figured to be $4000
the remaining $6000 was placed into Recoverable Depreciation
The adjuster would then take your Policy Deductible out of the ACV total ($4000 -$1000) as that is your agreed upon out-of-pocket portion.
The adjuster would send out the first check of $3000
The insurance company will pay out up to $9,000 in total for the claim at the current market value of $10,000.
The missing $1,000 deductible is your co-pay
**Insurance laws mandate the payment of the policy deductible on home property claims.
The insurance company may require proof of payment or a written agreement outlining the terms and intent to pay.
Waiving a home property claim deductible falls under the federal criminal code of insurance fraud.
Insurance fraud is a federal crime.
Insurance fraud can have severe legal repercussions. (Including a fine that’s way bigger than the deductible and possible jail time.)
Both you and Phoenix will be held liable**
We understand that deductibles can be an unexpected expense. For that reason, we offer in-house financing of your deductible payment over a series of months or up to 1 year (depending on amount) with no fees or interest.
While nobody likes an out-of-pocket expense for something that was sudden, accidental, and outside of our control, it can have its upsides.
If the materials being replaced were near the end of their lifespan it only costs the price of the deductible to reset their age.
Really, the same thing is true for middle aged material and even some things that were considered newer.
If a shingle has a life of 30 years, it will take approximately 36 months to be at a break-even point in replacing it for the cost of $1000.
Anything over 36 months would be winning. If it were a more expensive material, say metal, there’d be no question if it were winning unless you just put it on yesterday.
If Phoenix can add items to the scope of repairs, the value of what you pay in a deductible is higher or worth more.
Let’s say the insurance was going to pay $10,000 for your claim and it only included the roof. If we found other items that were damaged or were able to utilize insurance laws to expand the size of the scope of repairs by say $4,000. Your same $1,000 deductible would have a value of $14,000 instead of $10,000. (See our section on Maximizing Your claim)
It’s not all that uncommon that we more than double the size of the scope of repairs. Typically, we are able to increase the size of the scope of repairs between 15%-40%.
Prorated items: If the insurance thought that an item was already past its usable life or compromised in some way when you bought insurance they may have included as a condition of insuring the property that there would be a certain percentage of cost of that particular item that you would be responsible for in the event it was damaged.
Non recoverable depreciation: Very similar to Prorated except that the part that they don’t cover is determined by the passage of time instead of a flat rate.
Policy exclusions: Metal Marring/Cosmetic Waiver for example, is a policy exclusion for a few insurance companies. Meaning that if the damage just made it look worse, and its functional use is not compromised that they don’t owe for it.
Separate wind and hail deductibles: some policies have different co-pay amounts depending on what the peril was. If both perils did damage to the property, then the damages would first be separated by wind or hail (kind of like having two claims at the same time but still being treated as one claim.) and then each branch would be calculated like normal.
Endorsements (bells and whistles): these are policy enhancements that an insurance may offer for a low additional cost to your premium. Essentially giving you extra coverage in certain circumstances. For example, they may offer a matching clause in a state where it isn’t mandated by state law.
As a standard part of the insurance company’s contractual obligation to you, your insurance policy is confidential. Meaning that they are not allowed to discuss with us what’s actually written in the policy without written permission from you.
If you have a home loan with a mortgage lender, that mortgage lender might be listed on all checks as an additional payee.
There are some lenders that have a certain dollar amount, as a criterion, that if reached, they are required to be listed as an additional payee.
The mortgage company has a vested interest in the condition of the building.
They will usually require that you send to them by mail or shipping company: a hard copy of The Scope of Repairs and a copy of a written and signed Contract with Phoenix Restoration, along with the check. They will want to see what’s being repaired (Scope) and the intent to repair it (Contract) before they will put their endorsement on the check and mail it back to you.
*You should never endorse an insurance check before your mortgage lender does (unless they require you to). If you sign it first and mail it to them, they will then sign it and mail it back. You’d have a cashable check that’s moving through the post office or sitting in your mailbox. For your own protection, it’s better to have a half endorsed un-cashable check moving around the country till it’s back in your hands ready for final endorsement.
Mortgage lenders sell our loans to other mortgage lenders. This is a common and completely normal practice.
The problem is their clients are not always notified when this happens.
As a result, your insurance company may have the wrong lender listed in their records.
In consequence, they will send out all checks with the wrong lender listed on them, rendering those checks useless.
You’ll have to:
1. Have the insurance company invalidate that check.
2. Find out what company actually has your loan.
3. Let the insurance company know who the lender is.
4. Have the insurance company reissue the check with the correct information.
*During the beginning stages of the claim process or before the insurance company issues any checks. Please double check who currently holds your loan and that the insurance company has that lender listed in their records.
There’s a lot of work that goes into a claim that’s not the construction part. These jobs can be really top heavy and expensive for us.
Mortgage payee listed checks can sometimes take months to rectify and receive. Delays are usually due to incorrect information. If there’s anything that I would ask outside of a review or a referral, it would be, please be diligent with a mortgage listed check. They can really make life hard for us sometimes.*
Start by giving Phoenix Restoration a call to speak with one of our qualified Project Managers or click below.
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