Insurance claims – get paid up front!

Advance payments for insurance claims are not widely known to those who file claims. Often when an insured has a significant loss, such as a flood, tornado, wildfire, hurricane loss, or large water damage loss, the insurance company issues an advance payment of a portion of the advance settlement. . This situation also occurs regularly when a company is in a loss and needs money up front.

It is common and widely accepted practice for the insurance company to issue an advance in these types of cases. Note that there is nothing in the standard property insurance policy that deals with advances. Usually it is just a courtesy that the insurance company extends to your policy holder.

However, they generally do not offer to do so. You have to request the advance.

Here is an example. Joe Smith’s house is struck by lightning and a fire damages most of the house. Joe’s policy has construction limits of $ 100,000, content limits of $ 50,000, ALE limits of $ 20,000. The home can be repaired for $ 70,000, which is less than the policy limits. However, the adjuster expects the content loss to exceed the policy limits of $ 50,000 and the ALE loss to be $ 15,000. The adjuster submits his first report to the insurance company and tells them to expect the loss to be approximately $ 135,000 on these three parts of the coverage.

The insurance company could easily issue an initial advance of $ 25,000 to $ 35,000 for Contents and ALE, and $ 40,000 to $ 50,000 for the loss of the Home.

So what do you do if your Content is damaged and you need the most basic things, like a change of clothes and shoes? What if you need to have a secure contractor in the building and drop tarps on the roof to prevent more rain from entering the building? Most people do not have tens of thousands of dollars in their bank accounts that could be used to begin repairs or to begin replacing personal property. That’s when the insurance company issues an advance.

It is best to make your request in writing. Even if it is just a handwritten letter, it is better if it is in writing. Write or write down your request, keep a copy for your records, and give the copy to your adjuster. It is also a good idea to send a duplicate copy to the claims department of your insurance company. Send it by express courier or certified mail. NEVER trust the adjuster to request an advance on your behalf. You could be late with other jobs and it could be days before you apply. DO IT YOURSELF.

Take control of your claim, my friend! Make an EARLY request in the claims process for your advance payment!