Disaster can strike at any moment… What happens if you have a total loss?
Disaster can strike at any moment. It is important to think not if it’s going to happen but instead when it’s going to happen. This is especially true if you live near areas that experience many catastrophic events such as hail, tornados and hurricanes to name a few.
Depending on the event you might experience a total loss which can be a very stressful and overwhelming situation. However, even in this unfortunate situation it’s important to maintain calm, be organized, and professionally work together with your insurance company.
What is a total loss? Total loss is when the damage is done to your home so extensive that the estimated repair cost is greater than your home’s market value. For example, you might experience a total loss if your home’s market value is $250,000 but repairs cost $350,000. This means that it costs more to repair the damages to your home than what it’s worth. Navigating a total loss can be overwhelming, here are some tips on what you should do if your home is a total loss.
To start you’ll need to file an insurance claim with your homeowner’s insurance company.The insurance company will then send an adjuster, engineer, or both to help determine the repair cost. Many insurance companies vary from one another and all have different criteria that must be checked to consider a home a total loss. For example, some companies might write off a total loss if the estimate or repair cost exceeds 80% of the market value of the home while other companies require 90-100%.
Experiencing a total loss can also bring on many challenges and disagreements. Challenges you may face would be disagreements over a total loss and untruthful estimates. Furthermore, this is why It’s important to always get a second opinion on your insurance company’s estimate. Consider getting a second opinion from an estimating company when you feel you received a low estimate or when your home has severe catastrophic damage.
In addition to filing an insurance claim, you should check what your insurance policy covers, for example, it is always beneficial to check if your policy includes personal property coverage. Personal property coverage helps cover personal items that were destroyed, damaged, or stolen. Personal property coverage with proper documentation like audit, receipts, or photos would allow your insurance to estimate the value of your belongings and pay the cash value of the items for today’s market. Also, remember that some insurance policies also cover additional living expenses if you are forced to move out of your home while it’s being repaired or estimated. Make sure to keep a record of all expenses including gas, meals, or hotel bills.
Overall a total loss project can be very stressful and overwhelming. Make sure to always stay on top of your claim, stay organized, keep constant communication with your insurance company and get a second opinion.
