5 Facts from insurance companies and claims.

Homeowners insurance is complicated and confusing, and most people hope they never have to use it. If you’re like most people, you think about your homeowners insurance once a year, when the bill comes due, and then you hope to not have to worry about it until the next bill comes in.

Insurance companies are counting on that. Why? Policyholders who don’t think much about their policies are likely to not know much about their rights, which means that insurance companies can often get away with paying less than they should on claims.

Luckily, we’re here to arm you with the facts. Here are 5 things you should know about your homeowners insurance policy and keep in mind if you ever have to make a claim.

1. If your insurance policy is ambiguous, the ambiguity must be interpreted in your favor.

Your insurance company writes your policy; you don’t. Under the law, the insurance company has to interpret any ambiguous passages in your policy in your favor. Since many insurance policies are quite ambiguous, this can be very helpful for you, but you might need an attorney to help you make this case.

2. Home maintenance is very important.

If your insurance company can make a convincing case that certain damage resulted from lack of maintenance, then they don’t have to pay the claim. Therefore, it’s in your interest to stay up to date on home maintenance and keep scrupulous records proving you did so.

3. There are strict deadlines when it comes to making claims.

Policies vary, but many will state that you have as few as 14 days to make a claim after a damage-causing event. This means that after a big event, like a storm, it pays to have your property inspected for damage right away and to get a claim in as soon as possible. If you only make a claim once the roof starts to leak – which could be months later – you might be stuck paying for that replacement on your own.

4. “Flood damage” doesn’t mean what you think it means.

Let’s say that your roof is damaged by the wind during a big storm, and as a result, there is water damage in your home. Your insurance company might try to state that the damage was flood damage and isn’t covered. But “flood damage” has a very narrow definition, and the insurance company has to prove that your damage meets that definition. If they can’t do that, they have to pay the claim.

5. If the insurance company wants to settle quickly, that might not be a good sign.

It might be tempting to take the first payment that the insurance company offers, just to put this whole mess behind you. However, resist that temptation. Sometimes insurance companies will try to lowball their customers on the first offer in the hopes of limiting their payout. Before you accept any insurance company offer, make sure you have all the facts and know what the damage is likely to cost you. Then, don’t settle for anything less.