A fire in your home can be a life-changing event. It can be a frightening experience having to evacuate your home and having the fire department come to put out the blaze. Even a small fire can wind up damaging your belongings and your home itself, while a greater loss can be emotionally and psychologically distressing.
As you recover emotionally from the loss, you will also have to worry about financial recovery. Repairing and rebuilding your home after a fire is an expensive proposition. You also have to replace lost belongings and pay to live somewhere while your home is being repaired. Even a small fire can make your home too dangerous to live in due to the hazardous chemicals found in soot.
Mistakes in the process of filing your fire insurance claim and rebuilding your home can leave you in debt or having to make compromises when it comes to what you can replace. These are steps that you can take to protect yourself financially as you file a fire insurance claim.
Hire Someone to Help
The more extensive the damage done to your home, the more likely it is that you should seek help from a fire claims public adjuster or an insurance lawyer. A public adjuster is someone who can guide you through your insurance claim and represent your interests in the process. They make sure that you receive the funds that you are entitled to in your policy.
Budget Your Additional Living Expenses
Depending on the extent of the damage and the complexity of your insurance claim, you could be out of your home for months, if not longer. The Additional Living Expenses part of your claim will help you pay for expenses like rent and additional food costs, but you should be aware of your coverage limits and budget accordingly.
Across North America, rising costs like rent, gas, and food may stretch your budget to the limit. Keep all of your receipts in an organized and safe manner, and be mindful of how much you spend.
Decide If You Want to Replace Your Belongings or Buy New Things
Replacing lost and damaged belongings can be complicated. How it works depends on the type of insurance you have: Actual Cash Value or Replacement Cost. ACV coverage will provide you with the market value of the belonging at the time of loss, with depreciation calculated. In other words, the adjuster may use prices for similar used belongings to estimate your payout. Another example is if the damaged item is 20 years old, a high rate of depreciation will likely be applied, affecting your ability to purchase the same item new.
If you have Replacement Cost coverage, your insurance policy will pay out based on the cost of buying all of those belongings new today. However, you will have to replace those exact belongings and submit receipts for the purchases to the insurer.
Should you want to buy new, different things, you may be able to accept a lump sum cash payout based on Actual Cash Value. You will have less money from the insurance company, but you have more freedom to buy what you want.
Think Twice About Smoke Restoration
One option that you may have when it comes to damaged belongings is smoke restoration. This is a process in which professional restorers remove soot and smoke damage from belongings. It is important that soot is completely removed from belongings, as lingering soot can cause health issues.
Unfortunately, the process can be expensive and is not guaranteed to work. If you insist on attempting smoke restoration, the funds used are drawn from your Contents insurance, even if the process is unsuccessful. You will want to be mindful of funds used in restoration efforts if you have low limits because you may end up paying out of pocket to replace these items if they cannot be restored.