Work with claims adjusters.

If losses are small, you only may be required to provide the insurance company with a simple written estimate for the cost of repairs or replacement. More extensive losses usually are handled by a claims adjuster. If that's the case, the following suggestions can help ensure that the adjuster's estimate of damages is complete and accurate:

  -Provide the adjuster with your list of damages, but note in writing that it's only a partial list. You may remember more later.

  -Fully explain all losses and be sure the explanations are written down by either you or the adjuster.

  -Take notes of all conversations with adjusters and follow up with letters to the insurance company confirming the conversations. This increases the chances for getting a fair settlement, but it may also delay a settlement.

  -Compare notes with neighbors. What are their adjusters saying? Remember policies and coverage vary.

  -These suggestions will cost you more and may cause a settlement delay:

  -Bring in additional adjusters if you're not satisfied with initial damage estimates. If necessary, hire a structural engineer.

  -Consider using an independent claims adjuster if it is a special situation. These professionals can spot claims that homeowners might overlook, especially if the claim is complex or involves a lot of money. Generally, they charge 10% of a settlement. Use the same care and caution in hiring a claims adjustor as you would in choosing any other contractor.

Settle a claim

Use your list of damaged property and possessions to be sure the settlement offer is fair.

Appeal an adjuster's settlement offer to higher company management if you feel it's necessary. If that still isn't satisfactory, try settling through independent mediation or arbitration.

Don't rush to settle with your insurance company. Don't accept settlement checks as "final." You may need to file additional claims later. Keep your right to future payments open until time limits set by your policy require a final settlement. Consider seeking legal advice before signing any waiver that addresses accidents or mishaps other than natural disasters.

Put your settlement money into short-term certificates of deposit or money market funds. Don't invest the money in financial assets that could fluctuate in value, such as stocks or mutual funds. You will need the money soon--all of it!

Obtain loans and grants. Although not meant to replace or duplicate insurance, numerous government, nonprofit, and private loans and grants may be available following a disaster. Watch your TV or newspaper for announcements of their availability. Program sources include:

  -The Federal Emergency Management Agency (FEMA)

  -The Small Business Administration (despite the agency's name, homeowners or owners of personal property may apply for an SBA disaster-relief loan)

  -Your local city or county government (loans or assistance such as property tax relief may be available).

  -Private lenders

  -American Red Cross disaster relief

  -Other voluntary organizations

Avoid contractor rip-offs
Be extremely cautious about contractors you hire to repair or rebuild damaged property. Unfortunately, a few dishonest contractors take advantage of people caught in the wake of a disaster. Also, in cases where federal or state aid may be available, the agency involved may require that an assessment of the damaged property be completed before any repairs are made. Please review the tips below for dealing with contractors.

   -It is safer to hire contractors who belong to an accreditted Association, such as The Home Builders Association. The association will be able to give you a list of comments and complaints regarding contractors who are members. All you have to do is contact your local chapter.

   -Try not to rush into starting repair work.

   -Get estimates from more than one licensed, bonded, reputable contractor. Don't grab the first person who comes along. Call your local Better Business Bureau to check out a contractor.

   -Find out what neighbors are paying for similar work.

   -Be wary of contractors claiming "I can get to you right away and do it cheap."

   -Write down the license plate number and driver's license number of someone offering services.

   -Ask to see proof of the necessary contractor's licenses and building permits.

   -Make certain the contractor shows you a certificate of insurance covering liability and workers' compensation--otherwise, you could be sued if a worker is injured while working on your property.

   -Get a contract in writing. It should cover what is to be done, when work starts, cost and payment  schedules, and the quality of materials to be used.

   -Make sure repairs are done according to local building codes.

   -Be careful that your signature on a contractor's bid is not an authorization to begin work.

   -Don't pay more than 20% down for the contractor to begin work. Then pay periodically, according to the  progress of the work.

   -If the contractor insists on payment for materials up front, then go with him to buy them or pay the supplier yourself.

   -Have the contractor sign a release of lien when the work is done and paid for; this will prevent the contractor from making legal claims against your property in the event of a dispute later.

   -Don't make final payment until the job is finished--and you are satisfied with it.

   -Be sure all work requiring city or county inspection is officially approved in writing before making final payment to the contractor. You may even want a structural engineer to double-check major repairs before you make a final payment.

   -Don't sign over an insurance settlement check to the contractor.

   -Reduce your tax bite. You may be eligible for important tax refunds or deductions (called casualty loss deductions) or other tax benefits that are available for any property or possessions damaged or destroyed in a disaster.

     Rules regarding casualty losses are complex. You may want to work with an advisor such as a Certified Financial Planner® licensee, tax accountant, or certified Public Accountant. These experts along with other information sources could help you be aware of changes in tax laws and rules.

     In general, you may deduct losses if the total amount of losses in one year is more than $100 and more than 10% of your adjusted gross income.

     You must be able to prove that a loss took place, verify its amount, establish that it was due to a specific disaster, and prove that you own the damaged property or are liable for it.

     Keep in mind that some costs of documenting your loss, such as appraisals or photographs, may be deductible.

     You cannot take a deduction for property that has been paid for, or is eligible to be paid for, by your insurance.

     Special casualty loss rules apply in a federally declared disaster area. For example, you can amend your previous year's tax return to report current losses instead of waiting to report the losses on your current year's return. This gives you a quick refund (generally within 45 days) of taxes you've already paid. Also, tax filing deadlines and payment schedules may be extended in a federal disaster area.



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                                      All information obtained from the American Red Cross