7 magic words to expedite insurance claims

No words can erase a disaster that strikes your home or wrecks your car. But some words can help expedite your insurance payments.

Here are seven magic words that can smooth the claim process.

1. Covered!

You need to have insurance in the first place in order to make a successful claim. That sounds like a no-brainer, but many drivers and homeowners get caught by surprise. Perhaps they don’t have coverage for the damage, or they have exclusions they didn’t know about, or they don’t have enough coverage.

After the 2010 Fourmile Canyon wildfire near Boulder, Colo., 64 percent of homeowners found themselves underinsured on their homes by an average of more than $200,000, according to a survey by United Policyholders, a consumer advocacy group in San Francisco. Surveys in other parts of the country have revealed similar results.

Many of those homes were insured for about $100 to $125 per square foot, but the cost to rebuild was $250 to $300 per square foot, says public insurance adjuster Scott deLuise, CEO of Denver-based Matrix Business Consulting Inc. and a vice president of the national association of public insurance adjusters.

Other gaps that often take people by surprise:

• Many car insurance policies exclude business use of a vehicle. You might have less car insurance than you think.
• Standard home insurance typically doesn’t cover the cost of meeting new codes when rebuilding.

2. Documentation

Reporting as much information as you can to an insurer after a car accident speeds up the claim process. After you’ve called police and made sure everyone is OK, document the details. Accuracy is key, says Robert Villegas, a State Farm spokesperson.

A surprising number of people call State Farm after an accident, not even sure whether the company is still their insurer, Villegas says. “Getting it right the first time saves a lot of time and aggravation for all parties involved.”

Take notes about the other cars and people involved in the accident, and how it happened. Take photos of the scene and the vehicles. Know what to do after a car accident now, before it happens.

Your insurer might have a mobile app to help with this. For example, State Farm’s Pocket Agent lets customers draw the scene and circumstances of the accident, collect information about the drivers and passengers, take down information from witnesses, take and submit pictures and submit a claim. The app is available for Android, Apple devices and Kindle Fire. Once you submit the information, State Farm calls you.

Whether you have a home or an auto insurance claim, keep notes of all the conversations you have with your insurance carrier, including the names of people you speak to, deLuise says.

“Write everything down and confirm by email,” he advises.

3. Police report

You’ll need a police report if you want to file a theft or vandalism claim on your home or car insurance policy. Ask the police for a copy of the report, and get the officer’s name and the incident number.

4. Sudden

Home insurance covers “sudden and accidental” damage — not damage from normal wear and tear or neglected maintenance. As soon as you notice a problem, such as evidence of damage from a leaky pipe, report it. Your claim could get denied if you procrastinate, allowing the damage to get worse.

5. Immediate

Of course safety is the No. 1 concern after an accident or disaster. But once safety concerns are taken care of, call the insurance company right away.

“Timeliness and quality of the information are the key to keep the process moving,” Villegas says. “With car accidents, it aids the investigation to know the details sooner rather than later. [For home insurance claims,] as soon as you recognize there’s damage, we recommend starting the process.”

6. Inventory

Can you list every single item in your home, down to socks, spoons and the stuff stored in the corner of your basement? You’ll need to if your home is leveled by a fire, tornado or other disaster.

“Most people have over 1,500 items,” deLuise says. “Trying to remember that many is almost impossible if it’s not documented.”

That’s why keeping an updated inventory of all your belongings is critical to getting reimbursed for everything to which you’re entitled. Walk through your house with a video camera and get everything on film, including the contents of each drawer, cupboard and closet, deLuise says. Then, keep the record in a secure place away from home.

7. Receipts

Save receipts for anything you buy that is reimbursable from your insurance policy. After storm damage, for instance, keep receipts for any supplies you purchase to cover up holes in the roof or windows before repairs begin.

If your home is uninhabitable due to damage, home insurance covers additional living expenses, such as rent for a temporary place to live, restaurant meals, additional miles if you have to commute farther to work and other costs.

Although you might receive advances from your insurer for big expenses, such as a deposit on a rental home, additional living expenses coverage is generally doled out as you spend. Receipts are crucial.