By Jill Schlesinger
Tribune Media Services
As the East Coast recovers and rebuilds after Superstorm Sandy, it is important to heed some hard lessons. The most important of which is clear: if you’re in the path of such a storm, you need to follow official warnings and evacuation instructions. Many residents in the northeast ignored evacuation orders for Sandy. This type of stubbornness not only puts you at risk, but it also puts first responders in harm’s way. Some older folks didn’t want to leave, which makes it more important for younger relatives, friends and neighbors to encourage and assist them.
It’s also important to create and communicate emergency plans among family members. What are the procedures that your family will follow? Where will everyone meet, and how will you stay in touch? Who will be responsible for older relatives, and what are the contingency plans for a prolonged power outage? If you live in a place where storms frequently knock out your electricity, you may want to consider purchasing a generator. Michael Goodman, CPA/PFS, CFP, of Wealthstream Advisors says “if a generator is affixed and connected to your home, versus one that is on wheels and can be rolled away, the cost can be used to increase the cost basis of a home when you sell it.”
The time to review and become familiar with the terms and details of your homeowner’s and auto insurance policies is not in the aftermath of a severe event, but before it occurs. Many flood victims find out quickly that most standard homeowners’ policies cover structural and water damage only in limited circumstances, like when a tree falls and knocks a hole in a roof or breaks a window and allows rain to fall inside. Most policies don’t cover damages that result from rising water unless the homeowner lives in a designated flood zone and has purchased insurance through the federal government’s National Flood Insurance Program.
There is a safety net available for those who experience flood damage but whose policies do not cover the damage: Residents living in declared disaster areas could be eligible for federal assistance. To apply online, go to www.disasterassistance.gov; apply via smartphone at http://m.fema.gov; and to apply by phone, call 800-621-3362 or TTY at 800-462-7585 for people with speech or hearing disabilities.
If you know a storm is coming and that you could be affected, it’s smart to take pre-storm pictures or video. Once the damage has occurred, take another set of photos before you move anything. You should then make a list of damaged or lost items and include their date of purchase, value and receipts, if possible. Don’t make permanent repairs until the insurance company has inspected the property and you have agreed on the cost of repairs. However, you should inform the insurance company if you need to make temporary repairs to prevent further damage to your property.
Remember that all settlement offers from insurance companies can be negotiated, so don’t go nuts when you first review the adjuster’s written assessment. Adjusters should account for regional differences in the cost of materials and contractors, but if they don’t, you can make a case for a higher amount. For that reason, it is imperative not to cash or deposit the first check from the insurance company until you review the full report and agree with all items and costs. Some red flags include omissions of damaged items, partial or incomplete measurements, and low-ball contractors’ costs. If you see a problem, return the first check and request that the adjuster revise the report. Then request a check from the insurance company for the correct cost of the damage.
If you run into a brick wall with your insurance company, you will have to create a paper trail. In addition to calling, register all complaints in writing. It will help to be courteous and specific about the problem when you document it. Be sure to ask for a resolution within a reasonable time frame. If problems persist, contact your state’s insurance commissioner. Keep working the process – it can take patience and persistence, but ultimately, you have to be your own advocate.
Jill Schlesinger, CFP, is the Editor-at-Large for www.CBSMoneyWatch.com. She covers the economy, markets, investing or anything else with a dollar sign on her podcast and blog, Jill on Money, as well as on television and radio. She welcomes comments and questions at askjill@moneywatch.com.
This was printed in the December 2, 2012 – December 15, 2012 Edition
