It’s a beautiful sunny day in Manhattan and suddenly your ceiling starts to drip water like it’s raining in your house! You run upstairs to find your neighbor isn’t home and they seem to have left their bathtub running...now there are torrential downpours in your apartment! What are you going to do???
You’re a busy person with a million things to figure out and the last thing you want to think about is the insurance claim process.
This does NOT have to be a nightmare! Here is an explanation of how the process works. It’s reasonably straightforward if you have a good insurance company, a good broker and a great contractor.
Here’s a checklist to help you figure out what to do, who to call, where to stay and more:
- Call your broker and file a claim. You pay your broker every time you pay your premium and they are paid to help you!
- All claims will start with your insurance company, other companies may be involved depending on liability but start with your broker and your insurance company.
Your broker will know how to deal with the paperwork, other insurance companies and which insurance company will be liable for paying out your claim. For example, if you have a broken pipe or leaky roof, your building insurance will be charged back for the claim, this is called “subrogation”. If an upstairs neighbor left their bathtub running and it overflowed, then your neighbor’s insurance company will be responsible.
- Call a contractor and obtain a quote for restoring your property to the exact way it was before the incident. Things a great contractor will do:
- Organize a moving company that will photograph all your personal items, take inventory of them, store and put them back in exactly the right place.
- Deal with fighting the insurance company to justify current market pricing to rebuild your home (your insurance company wants to pay as little as possible).
- Tell you exactly how long you can expect to be out of your home.
- Guidance on how to deal with the insurance company and obtaining temporary accommodation comparable to your own home.
- Complete the work, arrange for all your personal belongings to be returned and put back in place and have your apartment thoroughly cleaned before you move back in.
Understanding your claim
There are a million and one ways that things get damaged, and working out who is going to pay for what is the main confusion in any claim.
- Your household contents insurance company will cover anything that you or a previous owner installed. Meaning, that new kitchen that was done 10 years ago? No problem! Rugs, pictures, clothing? You’re covered with a decent insurance company. We recommend Chubb, Fireman’s Fund and Traveler’s. This is where a cheap premium with crappy insurance can bite you in the ass.
- Maybe your neighbor flooded your apartment by overflowing their bathtub. Your insurance company will “subrogate” the claim. They will pay out your claim and then chase your neighbor's insurance company for the money.
- Your building is generally responsible for anything that is “original to the building”, if it was installed by the original developer – kitchen, bathroom, floors etc. – then the buildings (usually crappy) insurance company will pay for the damage. You have very little leverage or control over how much they give you or what they cover. Often buildings cheap-out on insurance because they won’t be the ones making a claim and they want to keep common charges low!
Here are a few different types of scenarios...
- Best case scenario:
My apartment is renovated and I have excellent insurance. Despite the flood, you are in a great position. Simply call your broker, call West Village General Contracting who will provide you with extraordinary attention to detail and get the process moving AND finished in an effective + efficient manner.
- Medium case scenario:
You’re not in a new apartment or an old one. You might have a new kitchen, bathroom or floors and then some features that are original to the building.
Your insurance company is Chubb or similar.
Your housing will be taken care of and the new stuff will be replaced but you may have to put money in to make up the shortfall offered by your buildings insurance company on existing fixtures and fittings.
- Worst case scenario:
Your apartment is on the older side, all original to the building and no one has ever heard of your insurance company. Your buildings insurance company is dodgy and impossible to deal with. You are essentially screwed.
Insurance companies make money hoping that you won’t be making a claim.
Obviously during a time of stress you want to feel taken care of. The last thing you want to worry about is an insurance company questioning you about your claim and trying to pin it on you. You certainly don’t want a cheap general contractor who promises you the work will be done within 3 weeks but it actually takes 6 and doesn’t manage the entire process. So please be careful about which insurance company you choose and which General Contractor you choose. Both are vital in ensuring this stressful time is over quickly and you can get back to your life.
As an added bonus, we created this downloadable insurance claim checklist. Grab it here!