When owning a property one of the things that come along with it is having to obtain insurance for your home(s), whether it be your rental properties or primary residence. While everyone hopes you never actually have to use the insurance there may come a time when damage can occur whether it be a natural disaster or accidental that you will have to file a claim.
If you are an investor chances are you have a commercial policy as group insurance for all your properties, this is often different from a regular residential home policy where you have a flat rate deductible of around $500-$1000, generally the lower the policy amount the higher your deductible will be. Commercial policies are often a higher deductible it usually will equivalent to on average 2% of the value of the home so for example if your home was valued at $137,000 your deductible would be around $2700. This is something you would want to pay attention to especially depending on the severity of the claim it may end up costing you less to just get the work done without filing a claim. In both cases when it is a natural disaster it wouldn’t effect your rate, however if it is accidental you could expect an increase upon renewal.
The process for commercial claims can be a bit different. Generally the insurance company will send out an adjuster within 48hrs to access the damage. Once they do so they will offer a settlement payment for damage which will not necessarily cover the damage. They would then offer you this payment amount to hire a contractor to get the work done yourself. You can then hire a contractor to give a quote for what the work is going to actually cost and appeal the settlement amount, at which point they will re-visit the amount with the contractor. For residential they will often hire contractors they are affiliated with complete the work. I often find either way the pay outs do not cover the complete cost of repairs which is always something to consider when filing a claim.
Written by Scott Esmail