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Financial Recovery and Risk Management

By Brenda Procter, M.S., State Specialist & Instructor, Personal Financial Planning, University of Missouri Extension

Someone attempting to restore their life and home after a storm will face difficult decisions at a time when stress can cloud their thought process. In many cases, the decisions will involve large investments. Naturally, people want to recover as much as possible through their homeowner’s insurance policy. Where insurance falls short of needs, other types of assistance may be available, especially where the President has declared a disaster area. Claims that aren’t covered by insurance or other reimbursements are tax-deductible if they exceed 10 percent of adjusted gross income.  Here are some tips for recovering if it happens to you.

Documenting Losses and Claims

Whether you’re filing for insurance, seeking assistance or claiming a casualty tax deduction, you will need proof of your losses. Before you start cleanup, take pictures. If you can’t take pictures, describe the situation accurately, listing the specific items that have been lost or damaged. Keep damaged materials for proof of loss until your insurance adjuster authorizes their disposal. It’s okay to remove the damaged articles from their original location to prevent further damage to the building, but do not throw them away without insurance company approval.

Remember to also document the losses in your landscape and garden. In addition, document the amount of debris you will have to remove, and whether it came from your property or elsewhere. Some homeowner’s insurance policies cover debris removal.

  • Save all receipts for your temporary lodging and food if your home is not fit to live in. Some policies pay the difference between normal living expenses and the cost of living elsewhere.
  • Save receipts for temporary repairs you made to protect your property from further damage.
  • Save receipts for any materials you bought and for other items you needed to protect your building or its contents from further damage. You may be able to claim these on your homeowner’s insurance policy.
  • Keep a copy of all letters and receipts that you send to insurance companies or relief agencies.
  • Keep a record of all phone calls you made to get reimbursements or aid.

Filing for Insurance

These tips are offered to guide you in filing insurance claims for damage to your home and loss of personal property:

  • Call your insurance adjuster immediately, and provide a phone number where you can be reached. If phone service is not available, work through disaster assistance workers from the Federal Emergency Management Agency (FEMA) or the Red Cross for assistance in reaching your insurance adjuster.
  • If possible, wait for an adjuster to survey damage. Meanwhile, carefully document losses and begin cleanup and salvage to prevent further damage to your home. Keep damaged materials in an isolated spot as far from the building as possible.
  • Follow up on your insurance call with a letter detailing your problems. Keep a copy of the letter.
  • Leave phone numbers where you can be reached when the adjuster arrives.
  • Ask the adjuster to assess damages. Sign the proof of loss statement. Report additional damage as it is found.
  • Provide any other information the adjuster requests.

Be sure to file your insurance claim within the policy’s imposed time limits. For homeowner’s policies, it varies. Review the settlement steps outlined in your policy. If you’re dissatisfied with the proposed settlement offer, explain your position in writing.

The Missouri Department of Insurance (MDI) can help if you feel you’re being unfairly treated by your insurer. For example, if the company didn’t contact you within 48 hours after the claim was reported, or if the company refuses coverage that is specified in your policy.

For more information about MDI, call 1-800-726-7390 or review the “Consumers” section on their website at http://www.insurance.mo.gov/.

For information and tips to help you work through the recovery process effectively, as well as information about homeowner’s and flood insurance; credit and other sources of release; contracting for repairs and rebuilding; and federal disaster assistance, read further at: http://missourifamilies.org/features/copingarticles/coping9.htm.