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What happens when I file an insurance claim?

Once your insurance company receives your claim, they will send out an adjuster to look at the property damage. They will determine if you will get funds (a settlement) to make repairs or reimburse you for a total loss. 

After you submit a claim, an insurance adjuster will come to inspect your property, review the damage, and ask you questions about the damage and condition of the property before the damage was done. 

You can provide estimates from your own research about the costs of repairing the damage to make sure you get a fair settlement.

An insurance adjuster works for the insurance company. 

After the adjuster submits a report on your claim, your insurance company may issue a settlement, which is the money they agree to give you to fix or replace your damaged property, for example, fix a hole in your roof, repair your car, or replace your belongings.

Filing an insurance claim is the first part of a journey that has many routes. Read on as we highlight many of the stops along the way. 

No matter which route you’re on things can get confusing. Write down the names of the people who assist you. Ask if there is a case number associated with your account. Once you have come to agreement or understanding, be sure to document everything that you discussed.

Process for home and auto insurance claims

Homeowner’s insurance

When your homeowners insurance pays your settlement, the check will probably be made out to both you and your mortgage servicer or lender. Most mortgage agreements require this in order to protect the lender’s interest. Typically, your servicer will release a portion of the settlement money before work begins so you can hire a contractor. As the work progresses, the servicer will typically release more money. The rest will be released once the job is finished and the home passes inspection.

For more information, download A Consumer’s Guide to Home Insurance by the National Association of Insurance Commissioners.  

Auto insurance 

When your vehicle is damaged, your insurance company assesses the value of your vehicle based on age, model, and other factors. Damage to your vehicle does not eliminate your responsibility to make your auto loan payments. When the cost of repairs is more than the value of the car, the insurance company may declare the vehicle a total loss.

If the amount you owe on your auto loan is more than the insurance paid on your totaled car, you may owe the difference to the lender. This situation is sometimes called "negative equity." Sometimes, people have a type of coverage called Guaranteed Auto Protection (GAP), which covers the difference between the amount due on the auto loan and the amount paid by insurance.

Make sure that you clarify with your insurance company and your auto loan lender what type of insurance policy you have as well as what losses the insurance will cover and what you will still owe. After the insurance process is completed, if you owe more on the loan than the amount paid by insurance, you will owe that amount. If the amount of your insurance coverage is more than what you owe, then the insurance company will pay you the difference.

For more information, download A Consumer’s Guide to Auto Insurance by the National Association of Insurance Commissioners.  

Tip: It’s a good idea to take pictures and videos of any damage to your damaged property (home, car, boat, etc.) and what was inside your property. For example, if your home was flooded and the damage ruined your furniture. If you do have pictures or videos of your property before the damage, this is also helpful in assessing the damage to the condition of your home, car, or other property and contents before the disaster and before any emergency repairs.

How long does it take to get my settlement?

There are many factors involved in how long it will take your insurance company to determine your settlement. 

This includes: 

  • The extent of the damages
  • The length of time it takes to send out an adjuster
  • Whether you and your insurance company can agree on an appropriate amount to compensate you for the damages 
  • Your state law may also set timelines for an insurance company to follow in the claims process

Contact your state insurance department or commissioner for more information. 

If you feel that your claim was unfairly denied or you were not appropriately compensated, you can also file a complaint with your state insurance commissioner or department , and you can contact a lawyer.

How homeowner insurance settlements are determined 

Your homeowner’s insurance policy is the contract between you and your insurance company. Your policy, along with your state law, will control what coverage you have and how your settlement is determined. 

For example, your policy could insure your home for either replacement cost or actual cash value. Replacement cost gives you funds to cover the costs to rebuild your home or repair damages using similar materials. Actual cash value gives you funds to repair or rebuild based on the value of your home considering its age and condition or market value.

Keep in mind that the market value of your home may not match the replacement value. That’s because, in some locations, the materials and labor that go into rebuilding your home may be less than the overall value of your property.

There are also special laws in various states addressing what happens if your home was insured for less than its replacement value. Your state insurance department or insurance commissioner may have useful information. You may also need the advice of a lawyer if you have a large claim.



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