Eliminate your insurance deductible – ethically and legally. Below are some solid, simple suggestions of how to keep your money in your own pocket when going through an insurance claim for property damage.
The Claim Process
What you claim for insurance purposes is heavily scrutinized. When you make a claim, experts are dispatched to assess damages, and to recommend what gets covered and what does not. Insurance companies take this part of the process very seriously. On one level this may seem like an onerous hurdle when all you want is some relief from the disaster you have just experienced, yet on the other hand this heavy scrutiny is what keeps insurance rates low for all of us in the long run. An important factor going into the insurance assessment is that you are not allowed to profit from your insurance claim. This should seem a bit obvious. If people could make money calling in insurance claims, some would be doing it all day every day. Insurance is there to protect us from financial disaster, and is very important to us when something big does happen. We do not want that protection destroyed by a few unscrupulous individuals.
The Deductible Dilemma
The majority of people making insurance claims have just experienced an unexpected disaster and are really in need of assistance. Yet, when they do need to make that claim, what happens is that they are immediately faced with a deductible. Sometimes $1000. Sometimes $1500. It depends what they signed up for in the policy. This can be a problem for many homeowners who are already facing a stressful time – they often have to take time off of work to make appointments, and they often have to take care of many things that are not covered by insurance but still must be done. So, how can we avoid being hit with the deductible? The answer is that you are permitted to do some of the “allowable” work under the claim yourself (or have a family member do it) – either in the clean-up phase of the disaster, or in the rebuilding phase. Basically, you can do a lot of the “grunt work” that does not require a skilled tradesman. Typically, you will be compensated an hourly rate for the work performed – usually around $15 per hour – for things you might even have ended up doing yourself anyway. The key is to first ask the question of the insurance agent “exactly what is permitted as work which can reduce the deductible?”. The second key is to keep very good records of all tasks performed. Document. Document. (Pictures speak volumes.)
#1: Moving contents out of the way to get at areas that need work done.
If floors are damaged, all furniture must be moved from the area. If walls are damaged, all pictures and fixtures must be taken down.
#2: Vacuuming up debris, and sucking up water.
The sooner water is eliminated from your property, the less damage it will do. Your insurance clause specifically states that you need to do what you can to mitigate damage. The good news is that you can factor the hours you spend on this activity into your claim – thereby reducing your deductible.
#3: Tarping off areas that have holes or vulnerabilities
Anything you can do to prevent rain water from getting in, or critters and rodents from finding a new home in your attic, is a very important step that should be taken care of as soon as possible. The hours spent on this as well as the materials used can be claimed as expenses.
#4: Documenting and removing contents
All contents that leave the property must be documented. Nothing should ever leave the house that isn’t written down. The good news is that the time you spend recording all of these items can be expensed.
There should be three “piles”. 1: Fine. 2: Need to be discarded (sewage damage, fire). 3: Needs to be cleaned (flood).
When the repairs are done, you can also track and claim for the labour involved in carrying the contents back into the home.
#5 Basic home repairs
While all complex tasks must be performed by a licensed and insured contractor, a homeowner is permitted to claim for tasks such as painting – if the painting was deemed a necessary part of the claim. Your insurance company can provide you with a list of tasks a “layperson” is able to perform if they so choose.
If the homeowner is a licensed tradesperson, they cannot be hired directly for the entire repair project, but the contractor assigned to the project is permitted to hire any employees they choose – including that homeowner. The homeowner is permitted to receive a “normal” wage as part of that companies’ contracted duties.
As a general rule there is really no point in performing work above and beyond what your deductible covers if your objective is to simply ensure you don’t have to pay anything out of your pocket. However, if you feel the project is not moving along quickly enough, and you are concerned about things being done “right”, you are permitted to perform tasks above and beyond – you simply won’t be compensated for these tasks. (Unless you decide to take a payout or a partial payout promising to do that work yourself in exchange for signing off on your claim). We hope these ideas helped. Feel free to contact us and share some of your experiences in your insurance claims experiences. We’ll see you on the next blog post.