Would you know what to do if a storm or other disaster damaged or destroyed your home?
Over several months, our researchers followed six families who have rebuilt, or begun to, in the aftermath of hurricane, fire, tornado, explosion and other calamities. Based on those interviews, and on conversations with highly rated service providers, our team compiled advice on preparing for and dealing with a disaster:
Before a disaster
• Be aware. No home is immune to catastrophe. Each year, storms and other disasters damage thousands of houses. Property and casualty losses during the first six months of this year totaled $7.9 billion. For all of 2012, losses were $35 billion, the second highest amount of annual insured losses since 1980, according to the Insurance Information Institute.
• Maintain an inventory. Go room to room, photographing or video-recording your home and its contents. Make a list of your property and keep receipts for high-ticket items. Include approximate age, replacement cost and serial numbers for major appliances or electronics. Keep a copy of the inventory somewhere besides your home. (The list is also handy for helping you know when it’s time to consider upgrading or replacing appliances and systems.)
• Review your insurance. Once a year, read through your homeowners policy. The extent of coverage can make or break your post-disaster experience. Consider these questions: Will your policy cover the cost to replace your home and furnishings? Does it include an allowance for cost overruns? If you can’t live in the house, will insurance pay for a hotel room or apartment? Will it cover the cost of rental furniture? Will it cover a cellphone bill that’s exceeded its limit during this time of crisis?
Ask your insurance agent to explain all available options and endorsements, including flood insurance, so you can intelligently choose your preferred level of coverage.
• Consider a safe. It’s a good idea to safely store important documents and items. But be aware that fireproof safes are not necessarily waterproof, as homeowners our team interviewed learned after firefighters doused their house fires. Before buying a safe, be sure it’s been tested to withstand fire and water damage.
After disaster strikes
• Don’t delay your claim. Contact your insurer immediately, even if it’s the middle of the night. If you incur expenses in protecting or repairing what you can, keep receipts to later give the insurance adjuster.
• Document damage. Your cellphone may be the perfect tool for this.
• Pay your mortgage. You don’t want to deal with a negative credit rating or a loan default. But check with your insurance agent and bank to see what’s negotiable.
• Be patient. Walking through the stages of the recovery process will take time and energy. Don’t rush to settle your insurance claim, and consider contacting your state’s insurance department if you believe the settlement is unfair. If your home is a total loss, take as much time as you need to decide about rebuilding.
• Avoid scams. Be aware that storms and other disasters attract unscrupulous vendors. Take time to interview contractors, visit their previous projects and talk to former clients. Make sure the contractor you hire is licensed, bonded, insured and, preferably, local. Don’t sign anything immediately.
• Seek specific experience. Hire a contractor with experience in rebuilding homes, which can be more difficult than building new because of site constraints, neighborhood covenants or other codes.
• Avoid large upfront payments. Be wary of contractors who want a lot of money before the job starts. If your state or locality doesn’t limit allowable down payments, pay only a portion upfront and tie additional payments to project milestones.