It only takes a major derecho storm to travel 770 miles across the country for everyone to really start reading their insurance policies closely and to start asking questions. We are very glad that everyone is reviewing their insurance policies. We ask you to do this every time you get your renewals but if we are honest, most people toss that insurance envelope into a drawer and hope it has whatever they need IF something major happens. We hear time and again of people who had sold a car “a long time ago” or added that garage years ago. There has been lots learned in the last few weeks including a lot of people who have never had to file an insurance claim or go through that process.

It is very important to make sure that your home and buildings are insured for the proper amount and at least 80% of the Replacement cost of the building. Many people get confused when they see how much an insurance company lists their Coverage A amount at. Many people get confused with themarket value and there is no way they can sell their home for that amount or just bought a home and didn’t pay that much for their home. Insurance companies will always look at what it costs to REBUILD or REPLACE your home with like kind and quality. In today’s world, those building expenses have gone up drastically. This is why it is critical that buildings have enough coverages. Insurance agents need to know if you have done an addition to your home, replaced your roof recently, added a building to your property, etc. It is very important to let your agent know if you have done upgrades to your property. Depending on the type of form you have on your insurance policy- you usually get 10% of Coverage A in outbuildings automatically from insurance companies. This is any building not attached to your home that is not used for business use. Soif you have an unattached garage, a tool shed, small shop, etc. If you have buildings that total more than 10% of your Coverage A (ex. A $200,000 home will have $20,000 in Coverage B for outbuildings) then you need to endorse the policy to increase the outbuilding cost. Coverage C is all of your personal property or home belongings. Coverage C can be Actual Cash Value OR Replacement cost. The difference between those two amounts is depreciation. If you have a 5 year old TV that you spent $2000 on when you bought it, Actual Cash Value (ACV) might get you $300 for that TV where Replacement cost (RC) will get you a new tv of like kind and quality regardless the cost.

Another big area has been Loss of Use or Coverage D. This is the amount of money an insurance company will give you to live elsewhere while your home is repaired or rebuilt. To be able to use this coverage, your home must have had some sort of damage, being without power is not a valid reason to use this coverage. There are many endorsements that can be added to a policy, refrigerated products, water/sewer back up, service line, earthquake coverage, equipment breakdown to name a few of the most popular coverages. These are also good to review. Ideally, we would insure everyone for everything and you’d never have to worry but unfortunately all of these endorsements cost extra money. The important thing is to find the balance for you of what is a logical concern versus a risk you are willing to take.

Unfortunately for all the first time claim filers during this storm, this is not your usual claims process. Typically, a company adjuster would be out within a few days to go over the damages with you. Obviously, nobody was prepared for the wide path of destruction that swept the Midwest on August 10. Some adjusters are assigned to up to 100 clients to review damages and some of those site visits are taking more than one day and I am sure very few are less than a few hours. Then you add COVID-19 in the mix and everyone is working from home and things are all delayed while things are routed to the correct person in the mail causing additional delays. Most adjusters and companies are cutting checks to people to start repair work. Typically, again each policy and company are different, and you have to know how your policy works, will cut a check to you for the ACV amount of the repairs. Once the work has been completed and you turn in receipts if the cost was more than the ACV, the insurance company will pay you the difference. It is always critical to save EVERY receipt that it takes to make your property whole again. If you feel something isn’t right, ask. Typically, agents do not have much to do with the claims process once the claim is turned in. It is usually between the company’s adjuster and the insured, however, if you are not happy with something then we need to be told so we can advocate and research the situation. It is the insured’s responsibility to protect their property from any further damage whether that is tarping a roof, boarding a window, etc. We have heard from numerous adjusters that are located outside the Midwest region and they have said most people are amazing to work with especially with everything they’ve been through. We have remained friendly, understanding, etc. This speaks volumes to us as Iowans! WE appreciate your patience and understanding as well. It was an overwhelming situation in the middle of a pandemic and something we hope NO ONE ever has to live through again. There are many disasters happening in our country between hurricanes, derechos, and wildfires. It has never been more important for you to review your coverages with your agent. We are here to help you and again thank you for your patience and understanding as we navigate the storm together.



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