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Disaster Insurance Claim Guide

Authored By: Lagniappe Law Lab

Post-Disaster Insurance

 

Understanding Hurricane Deductibles

Does your homeowners insurance policy carry a hurricane, named-storm or wind and hail deductible? 

  • Homeowners policies carry a basic all peril deductible typically ranging from $250 to $2,000 depending on the insurance company. 
  • After Hurricane Katrina and Rita, seperate hurricane, named-storm and wind and hail deductibles became common in coastal states. These deductibles typically run between two and five percent. 
  • A higher deductible means higher out-of-pocket expense in the event of a loss. 
  • You can find out how much your deductibles are on the first page of your homeowners policy, or call your insurance company for more information. 
  • In 2009, the single season hurricane deductible law was enacted after Hurricanes Gustav and Ike struck Louisiana back to back in 2008. Having a single season hurricane deductible lessens the impact the policyholder must bear when multiple storms cause damage to an insured property during a single storm season or calendar year. This will allow homeowners to better plan and manage the cost of recovery if they are hit more than once in a hurricane season or calendar year.

  • If the amount of your claim falls below your deductible so that you paid the entire claim out of pocket, make sure to document the damage with photographs and keep receipts for the repairs, because that money spent will count toward the next deductible if you sustain damage from a second storm during that same storm season.

Post-Disaster Insurance FAQ

Any Louisiana insurance consumer who feels that they have not been fairly compensated for their insurance claims can contact the LDI at 1-800- 259-5300. Consumers may also file a complaint against their insurance company online at www.ldi.la.gov/ ConsumerComplaintForm. Keep in mind that in order to complete your complaint form, you will need to have your insurance card, claim number, insurance company and/or agent name and any electronic documents you would like to attach to your complaint.

No. 

  • Independent adjusters are representatives of insurance companies and cannot be hired by policyholders. They are typically contracted through an independent firm or agency to process and settle claims for an insurance company. They receive compensation from the insurer, not the insured.
  • Public adjusters, however, are hired and paid by policyholders directly to represent them during the insurance claims process. They act on behalf of the insured, compiling evidence to help support their clients and get them the best settlement possible.

Common duties of a public adjuster are to:

• Investigate and prepare claims on behalf of the insured.

• Research and examine relevant documents, including insurance policies and other forms.

• Inspect property and determine the amount for settling covered damages. • Negotiate a settlement with the

insurance company.

Your insurance company will need to see proof of damage to properly process your claim. However, they do not need to see actual damaged items as long as you remember to take plenty of pictures of them before they are discarded.

When filing an insurance claim, it’s always best to record the model and serial numbers for all of your damaged property. Doing so will greatly benefit you in getting the best settlement for your claim and assist your adjuster during the claims process.

Taking photos and videos of your property is the best way to document damages for your insurance company. Creating a home inventory before a disaster strikes will help make the process of documenting damages to your property a whole lot simpler. The National Association of Insurance Commissioners (NAIC) offers a free downloadable app for your smartphone called myHOME scr.APP.book that can help you document photos and descriptions of your valuables.

About Homeowners Insurance

Homeowners Insurance is a “package” policy that covers both property and liability claims.

  • Property claims are made when loss or damage occurs to your home or personal possessions. This coverage extends to possessions that you carry for personal use when you travel.
  • Liability claims arise when someone else suffers a bodily injury or damage to their property because of something you did or did not do. Liability claims may result in a lawsuit against you.

There are six basic types of homeowners coverage that are designed to provide varying amounts of protection. Different insurance companies may give them different titles, but the perils they insure are basically the same.

  1. The Basic Form protects your home and personal property such as furniture, carpeting and personal belongings. The policy covers damage due to fire or lightning, removal of property endangered by peril, windstorm or hail, vandalism or malicious mischief, theft, damage from vehicles and aircraft, explosion, riot or civil commotion, glass breakage and comprehensive liability.

  2. Along with benefits provided by the Basic Form, the Broad Form insures your home and personal property against building collapse, freezing of or accidental discharge of water or steam from within plumbing, heating/air conditioning systems, domestic appliances, falling objects, weight of ice, snow or sleet and rupture or bursting of hot water heating systems. It also provides comprehensive personal liability coverage.

  3. The Special Form covers your home against “all risks” except for certain specified exclusions, such as floods and earthquakes. This policy covers other structures (such as a detached garage) and all perils covered in the Broad Form, damage to or loss of personal property and comprehensive liability.

  4. The Tenants Policy is a Broad Form policy that supplies coverage for personal property and liability. This policy provides no coverage for the dwelling.

  5. The Comprehensive Form insures a dwelling and personal property against all risks except certain specified perils such as floods and earthquakes. This is often the most expensive homeowners policy because it covers so many potential losses.

  6. Special Condominium Coverage is designed for condominium unit owners and is not presently offered by all insurance companies. It provides the basic coverage offered in the Tenants Form and provides special protection needed by owners of condominium units. It insures only the interior of the dwelling, not the structure itself.

When deciding which form is right for you, be aware that there are some properties and perils that are excluded from most homeowners policies.

  • Animals, birds, fish, automobiles and business property that are away from the covered premises are not covered by most homeowners policies. Loss and damage caused by flood, surface water, water that backs up through sewers or drains, earth movement, nuclear damage and war are not covered. In some instances you can purchase additional coverage for excluded items.

Personal liability and medical payments do not apply to operation or ownership of any aircraft, automobile, recreational motor vehicle, water craft powered by more than a 50-horsepower motor, or to bodily injury or physical damage caused by an intentional act of the insured.

 

Figuring Out the Costs

The settlement amount the insurance company offers, of course, differs with each situation. However, it helps to know the two basic ways to value your property.

  • Actual Cash Value is the replacement cost of the item minus depreciation. For example, if a new television set costs $2,000 and your 7-year-old television set is damaged in a fire, you may end up receiving only $1,200 because of depreciation of your television’s value over time.

  • Replacement Coverage is the cost of replacing an item without deducting for depreciation. For example, if the current cost of a television similar to the one you bought seven years ago is $2,000, you will receive the full $2,000. Most policies require you to actually replace the item in order to receive reimbursement.

Check your policy to see which kind of coverage you currently have. If you have actual cash value and would prefer replacement coverage, it may be added to your policy for an increase in your premium of about 10 to 15 percent.

Don’t forget about deductibles.

  • Check with your producer to find out if there is a hurricane deductible written into your policy. There is a trend among insurance companies in Louisiana to apply a hurricane deductible to homeowners policies due to the frequency of storms in our state. For example, a two percent hurricane deductible would require you to pay up to two percent of the insured value of your home instead of the usual deductible you pay when you have other types of losses. When considering the purchase of a policy, keep in mind that most companies restrict the sale of insurance once a hurricane or tropical storm is approaching.
  • Most policies limit the amount of reimbursement for valuable items, such as jewelry, furs, silverware, guns, antiques and computer equipment. If you have some particularly valuable items in these categories, you may need to purchase additional coverage. This type of coverage is usually not expensive and is based on the value of the item being insured. Contact your insurance company or producer for more information about valuable items coverage.
  • A personal liability, or umbrella, policy pays liability limits above those you can get on your homeowners or other basic liability policy. If you are thinking of buying a personal liability policy, begin by finding out the maximum amount of personal liability your homeowners policy provides. Make sure you coordinate the liability limits so that the umbrella policy covers any liability claim in excess of the amount your basic policy will pay, up to the maximum limits of the policy.

Flood and Windstorm Insurance

Since flood damage is not covered under homeowners policies, purchasing a separate flood insurance policy can help homeowners and commercial interests protect their homes and businesses.

  • Although the Louisiana Department of Insurance (LDI) can answer basic questions about flood insurance, the Department does not regulate the National Flood Insurance Program (NFIP), approve its rates or changes or have any authority over the program. However the LDI monitors how these changes impact policyholders in Louisiana. For more information on flood insurance, please visit the NFIP’s website at www. floodsmart.gov or call 1-800-427-2419.
  • As a coastal state, Louisiana has relied heavily on the National Flood Insurance Program (NFIP), whose majority of current indebtedness resulted from Hurricane Katrina and Rita payments in our state. There are 5.6 million NFIP policyholders nationwide.

Flood Insurance Basics

Flood insurance protects homes, condominiums, apartments and non- residential buildings, including commercial structures. While some may believe that flooding only affects properties in coastal and low lying areas, the truth is everyone is vulnerable to floods. In fact, property owners outside of high-risk flood areas are responsible for 25 percent of NFIP claims in Louisiana. Rising floodwaters can prove to be hazardous no matter where you live, yet only one out of every four single family homes in Louisiana have flood insurance. This is why it is advisable for everyone to have flood insurance, even if you live in an area that is not flood prone.

When we talk about flood insurance, “flood” means a general and temporary condition of partial or complete inundation of normally dry land areas from:

  • The overflow of inland or tidal waters.

  • The unusual and rapid accumulation or run off of surface waters from any source.

  • Mudflow, which is a river of liquid and flowing mud on the surfaces of normally dry land areas, as when earth is carried by a current of water.

According to the NFIP, just a single inch of floodwater can cause more than $10,000 in damage to a home.

  • Here are additional flood facts from the NFIP:
    • For those who live in a Special Flood Hazard Area (SFHA) or high-risk area and have a federally backed mortgage, the mortgage lender requires a flood insurance policy.
    • The Standard NFIP flood insurance policy does not provide coverage in excess of $250,000 for your house (Coverage A) and $100,000 for its contents (Coverage B). If more coverage is necessary, it can be acquired through excess flood insurance that can be purchased through private insurers.
    • The Standard NFIP flood insurance policy provides coverage up to $500,000 for a commercial structure (Coverage A) and up to $500,000 for its contents (Coverage B).
    • In a high-risk area, a home is more than twice as likely to be damaged by flood than by fire.
    • Floods and flash floods happen in all 50 states.

Purchasing Flood Insurance

Contact the National Flood Insurance Program (NFIP) at 1-888-CALL FLOOD or visit www.floodsmart.gov. But don’t wait until a storm is coming to purchase flood insurance. It may take 30 days after purchase for a flood insurance policy to go into effect.

What if You Have No Flood Insurance

If you do not have flood insurance, there are other possibilities for reimbursement from some flood damages. Check other property and casualty policies for all opportunities for recovery. These may include:

  • Your homeowners policy covering loss of food by spoilage due to electrical outages or damage from power urges related to storms;
  • Your auto policy covering damage to your motor vehicle if you have comprehensive coverage;
  • Your homeowners policy covering damage by fallen trees.

You may be eligible for Federal Emergency Management Agency (FEMA) federal disaster assistance in the form of low-interest loans or grants if your home is in a federally declared disaster area. Parts of Louisiana have been declared to be a natural disaster after past storms and hurricanes and, therefore, eligible for FEMA assistance. However, federal disaster assistance declarations are awarded in less that 50 percent of flooding incidents. If you are uninsured and receive federal disaster assistance after a flood, you must purchase flood insurance to receive disaster relief in the future.

If Impacted by a Flood

If your property is flooded, you should contact your insurance producer or insurance company right away. Have your policy or policy number handy at all times and provide your phone numbers and addresses where you can be reached day or night. You will want to protect your property from further damage. Take photos of your damaged property and make whatever reasonable temporary repairs are needed. Especially cover broken windows and holes in the roof or walls. Keep a record of these repairs for possible reimbursement by your insurance company.

Wind, Rain and Hail Insurance

  • Wind-driven rain isn’t considered “flooding” and most homeowners policies cover wind, rain, and hail damage. If your policy excludes coverage for windstorm, you should have a separate policy to insure your property for these kinds of losses. If your property is damaged by wind, wind-driven rain or hail, or if you are not sure if the damage is from flood or wind, contact your insurance producer or insurance company right away. Submit your claim for all damages. Your company will send an adjuster to investigate your claim and determine the cause of loss.
  • Generally windstorm damage is covered under your homeowners policy with a separate “named-storm deductible” or “hurricane deductible,” which usually ranges from two percent to five percent of the insured property value and could be higher.

Help Reduce Your Flood Risks

Policyholders can take action to reduce their flood risks in several ways. They can:

  • Take a look at their current, effective flood maps.
  • Talk with the local floodplain administrator to learn if there is a preliminary flood insurance rate map available.
  • Know their risk and start planning for mitigation actions.
  • Call their insurance agent for more details on their policy.
  • Look into FEMA Mitigation programs available to them.

Tips for Working with Insurance Adjusters

 

There are three kinds of adjusters who operate in Louisiana: 

  1. Insurance company adjusters,
  2. Independent adjusters who contract with insurance companies, and
  3. Public adjusters who offer their services, for a fee, to policyholders and others, who want help with getting their claims paid by the insurance company.
  • Insurance adjusters, whether contractors or employees of companies, play a vital role in the claims process. That is never more evident than it is after a disaster. Many companies do not have enough people on staff to handle an unexpectedly large workload so they rely on contract adjusters to help them expedite the overwhelming number of claims they receive.
  • Adjusters go into disaster areas as soon as they are permitted to do so by emergency officials. The time this will take depends on the severity of the damage in the area. If you have reported your loss to your company, they should be able to give you an estimate on the time the adjuster will arrive. Remember, in a severe disaster, claims are prioritized by the severity of damage.
  • Anyone who is representing a company should be able to show you an ID. If you have any concerns about an adjuster or any other insurance company representative, contact the insurance company for verification. Ask for proof of license, as all adjusters in Louisiana are required to be licensed by the Department. Non-resident adjusters responding to catastrophes must be registered with the Department. The adjuster will need to see the damage to evaluate your loss but generally you should make temporary repairs that will prevent further damage to your property. You might want to postpone permanent repairs until the adjuster has inspected the property andyou have reached an agreement with your insurance company on the repair costs. Check with your insurance producer or company for specific instructions. When possible, before meeting with the claims adjuster, determine what it will cost to repair your property.
  • If your property was damaged by windstorm and by flood, you will likely have separate adjusters. If your homeowners and flood policies are written through the same company, it is possible your losses will be handled by the same adjuster.
  • Be present when the adjuster comes to inspect your property. Make sure you have your insurance policy, your list of possessions, any “before and after” pictures you may have taken, and all of your receipts for materials used to make emergency repairs. Also be prepared to provide the claims adjuster with records of any property improvements you made prior to the damage caused by the disaster. All of this will make the adjuster’s work easier and will help settle your claim sooner. It is also important that you and the adjuster come to an agreement on what needs to be repaired or replaced.
  • After inspecting your property, the adjuster will prepare a repair estimate. Ask the adjuster for an itemized explanation of the claim settlement offer. If the first settlement offer does not meet your expectations, do not accept it and be prepared to negotiate. If you cannot reach an agreement, call your insurance company or contact the Department of Insurance at 1-800-259-5300.

Things to Consider When Hiring a Contractor

 

If damage to your home has left you in need of a contractor, be extra careful. Most of the time, an insurance company does not recommend a contractor, so be wary of those who claim the insurance company sent them. Always ask to see something in writing.

  • Get bids from at least three different sources. Do not do business with a contractor who cannot show proof of insurance. If possible, go one step further and ask that the contractor’s insurance carrier mail a certificate of insurance coverage directly to you. With all contractors, request the names and phone numbers of at least two references who have had similar work done by them in the last year. Follow through by calling each reference and discussing the contractor’s work in some detail.
  • Only do business with a contractor who is bonded, which will offer you some protection if the job is not satisfactorily completed or supplies purchased to make your repairs are not paid for. Check the licensing of the contractor with the State Licensing Board for Contractors by calling (225) 765-2301, or visiting www. lslbc.louisiana.gov and clicking on “Find a Contractor.” You can also call your Better Business Bureau to learn if there have been any complaints filed against the contractor.
  • Be on the look out for out-of-state con artists who may have just breezed into town to take advantage of the local situation. Also be wary of contractors who demand payment in full before work is completed.
  • If the contractor needs payment to buy supplies, accompany the contractor and pay the supplier directly. It is also a good idea to record the contractor’s license plate number and driver’s license number.
  • Before any work is started, request a clearly worded, itemized contract. Review it with the contractor and make sure you understand and agree with its content before the contract is signed.

The contract should include the following:

  • A separate breakout of labor and cost of materials.
  • The contractor’s responsibility to get all required permits.
  • The date the project is to begin and the date it is to be completed.
  • Proof of insurance coverage from the job’s start date until work is to be completed.
  • A statement guaranteeing that the work area will be left in its original condition when the job is done.

What to Expect When Filing an Insurance Claim

Below is Information, tips & strategies to help you produce the personal property inventory required to establish the amount of damages sustained in your loss. You are required to prove the full extent of loss-the submission of proof of loss, a list of damaged property and the amount of loss.

  1. An home inventory list is a list of all damaged or destroyed personal property list.
  2. Prepare an inventory of damaged personal property showing the quantity, description, actual cash value and amount of loss.
  3. Work from memory if your property was destroyed and you have no records.
  4. Review & record photos if you have them from inside your home prior to the damage or destruction to show items in inventory list.
  5. Include any photos you take of the damaged or destroyed property. 
  6. Include and attach all bills, receipts, & related documents if you have them that justify the figures in the inventory list of damaged or destroyed items.
  7. Complete a room by room inventory of both the damage to your dwelling and contents. Every single item in your home for which you wish to make a claim must be listed...if you do not claim an item, it cannot be considered for settlement.

Find out how much your deductible is so you can consider whether your loss is likely to exceed the amount of the deductible. The all-perils deductible and any named-storm deductible are listed on the declaration page of your insurance policy. If you don’t have a copy of your policy, your insurance agent can tell you.

They will ask you for a list of all damaged or destroyed personal property (a home inventory list) and receipts, if you have them, showing when you brought the damaged or destroyed items. They might also want a list of damage you’ve observed to the home and other structures, like a garage, tool shed or in- ground swimming pool. You’ll need this list when you meet with the adjuster.

When you call your insurance company or producer about your claim, keep a record of the conversation, including the person’s name and the date and time of the call. The company will then submit a loss form and an adjuster will be assigned to your claim. Ask the following questions as related to your claim: For the name and phone number for every person you talk to. For your claim or reference number. How long you have to file a claim. For a general idea of what your policy will cover. If your insurance policy covers hotel costs. If it does, ask about the coverage limits on length of stay or overall cost. For information about your deductible. If there are any special processes or procedures you need to know about. When you can expect an adjuster to call. What other information the company will need to process the claim

The adjuster will give you some time to make a list after your intial contact. Ask the adjuster how much time you have to submit this inventory list. Work from memory if your property was destroyed and you have no records. Prepare your home inventory list to submit including all photos, receipts, and other related documents. Submit proof of loss and other documentation to substantiate your claim. 

The adjuster may follow up with requests for additional information to clarify or qualify details about specific personal property items.The adjuster reviews the insured's previous loss history, verifies that premium payments are current and proceeds to investigate and gather facts about the loss. The adjuster will communicate with you to conduct an on-site property inspection to gather additional facts about the loss and to document damage to property. The adjuster verifies cause of loss and determines what damages are specific to your policies and endorsements.

Contact the Louisiana Department of Insurance (LDI)

 

Some of the reasons you may want to contact the Department of Insurance are: if you have a specific insurance related question, if you are having trouble resolving a dispute with your company or producer, if you need to learn more about an insurance company or if you want to report suspected insurance fraud.

  • Consumer complaints most frequently filed with the Department include: an insurance company not being cooperative when a claim is filed, not paying claims on time and denying claims that should be paid. With the help of Department of Insurance staff, the majority of these problems can be worked out to everyone’s satisfaction.
  • There are some limits to what the Department can do for you. The Department cannot give you legal advice, act as your lawyer or interfere in a pending lawsuit. We cannot recommend one insurance company or producer instead of another, decide disputes based on who is negligent or at fault, determine the facts surrounding a claim or resolve a complaint if the only evidence is your word against that of others.

 

1702 N. 3rd Street, Baton Rouge, LA 70802 P.O. Box 94214, Baton Rouge, LA 70804

www.ldi.la.gov

General Information: (800) 259-5300, or (225) 342-5900

 

Senior Health Insurance Information Program (SHIIP): (225) 342-5301 Agents Licensing: (225) 342-0860

Company Licensing: (225) 342-1251

Insurance Rating: (225) 342-5203

Fraud Investigation: (225) 342-4956

Consumer Services: (225) 342-1258

Consumer Advocacy: (225) 219-0619

Last Review and Update: Oct 29, 2021
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