How Florida home insurance claims are filed and paid out.

When you suffer a loss to your home due to any circumstances covered in your policy the claim process begins. Your Florida insurance agency will assist you in filing a claim with the insurance company that you are covered under. First an adjuster will come to your home to inspect the damage to your property. After assessing the damages there will be an initial payout to repair the loss depending on the terms, limits and deductible within your home insurance policy. (See tips for buying a home insurance policy)

The initial payment and payout period
This initial payment is often an advance for the total amount of the settlement. Other times the company will offer you a total amount right away but later you may find more damage that became apparent later on. In this case you can reopen the claim and file for additional reimbursements as long as the time limit for the State of Florida has not passed.

The limit for reopening a claim associated with a hurricane is 3 years after landfall. All other claims have a time limit of 5 years to reopen a claim.

Florida state law requires that the insurer provide the homeowner a Claims Bill Of Rights within 14 days of making contact about a claim. And thereafter the insurance company must pay out the entire claim within 90 days from the date the initial claim was reported.

It is common practice for insurance companies to send multiple checks associated with the type of loss you incur. For example you will receive one check for personal contents of your home, one check for structural damage and one check for living expenses if your home is uninhabitable.

Control where the insurance claim payout money goes
In Florida there have been many successful attempts by contractors to over inflate the cost of repairs which will drive up the cost of home insurance unless the Florida Legislature acts with a comprehensive tort reform bill. Florida ranks worst in the state for contractors scamming insurance companies that enriches attorneys and home repair companies. AOB claims filed have gone up from 405 in 2006 to a whopping 28,000 in 2016.

In 2017 the Florida legislature failed to act on protecting insurance companies and homeowners. Write your Florida senator to act responsibly and have them sign Bill 1038 and clamp down on this statewide problem.

Now that you have this knowledge it is very important to always have your home insurance agency that procured your policy work with you to ensure that when a claim is paid out that it does not entirely go to the contractors. This is called a “direction to pay” form or “assignment of benefits” contractors may want you to sign. In some instances it is okay to have a portion of the payout assigned to the contractor but make sure you have been advised properly so that you are not taken out of the process.

Your additional living expenses (ALE) check should always be paid out to you as this is not associated with a repair bill. This is your money for living expenses while your home is in repair.

When your lender or mortgage company has control over your claim payment
If you have a home loan and are not in possession of the title your mortgage company will receive some of the payout. This is common for lenders to include this in your mortgage contract. This applies only to structural damage to ensure the common asset you share with them is properly repaired and that the value is sustained.

Another common practice is for the payouts for a claim be put into escrow and paid out as your repairs are completed. The mortgage company has an interest in protecting their asset so they may also want to send their own inspectors to your property to ensure the work is done properly. You will also have your city building inspector asses the work as well. This is good for the homeowner as they will have two inspectors working for you to make sure your home is repaired competently.

In the case of a total loss your mortgage company will be paid first to settle the debt you have in your home and the remaining amount will be paid to you for rebuilding or to do as you wish.

Personal belongings and contents claims
You should always have a documented inventory of your personal assets and contents within your home to present to your insurance company when filing this type of claim. A replacement value policy will be first paid for the current cash value of the contents loss. This is the total amount you will receive unless you actually replace the items you file a claim for.

Always be sure to have a competent insurance agency that will work with you in the event of a property loss to protect your interests and assist you during the claim process. We hope you find this information valuable in the event you have to file a claim for your homeowners insurance policy. At Blue Sky Insurance we take an interest in the residents of Boca Raton and want to make sure you are an informed consumer. (see how to save on home insurance)