You come home one night after a strong thunderstorm and aren’t thinking at all about the weather. That changes when you hear water in your basement upon entering. The sump pump didn’t turn on, and now you have water damage.
It’s probably not what you wanted to come home to, but there’s no need to panic. After all, this is what your homeowners insurance is for. We’re here to walk you through the claim process so you’re prepared to get your home back to normal as soon as possible. Finally, we’ll go over what to expect when your claim is taken care of.
Contact Your Insurance Company
Jason Blevins is a leader on the insurance loss team at Quicken Loans. He says it’s not wise to jump in and immediately start repairing things.
“The first thing you should do when you have any kind of damage to your property is you should contact your insurance provider,” he said. “Give them in-depth information on what exactly happened to your home.”
Let them tell you what to do next. In situations where the damage is likely to worsen without immediate mitigation measures (e.g., a flood or fire), the insurance company will likely tell you to call someone out to take care of it. If this is the case, keep the invoices so you can be reimbursed later on.
It’s really important to listen to your insurance company throughout the process. Not doing so could jeopardize your compensation.
If the damage isn’t likely to get worse, the insurance company will next give you a timeframe for sending an adjuster out.
The first thing your insurance company really needs to do is send an insurance adjuster out to evaluate the damage. They’ll send an itemized list of repairs and the cost of the fix back to the insurance company.
At this point, you may be tempted to hire a public insurance adjuster. After all, the adjuster that was sent out works for the insurance company, so would they really have your best interests in mind?
Blevins doesn’t recommend going this route unless you have a serious dispute and think the insurance company’s adjuster has missed something in evaluating the damages. The reason for this is that a public insurance adjuster gets paid by taking a percentage of your insurance settlement, and you could actually end up getting less after the fee is paid.
The Repair Process
The adjuster has seen the damage, and maybe you even have the check from the insurance company. Now’s the time to strap on the tool belt, right? Unless you’re Bob Vila, the answer is probably no.
In addition to the fact that home repair is a major pain in the neck for most people, Blevins points out another big reason to leave this to the pros:
“Something I would strongly suggest is letting [the insurance company] select the contractor instead of doing the work themselves,” he says. “If you do it through a contractor, your insurance company will sometimes guarantee the work for a certain amount of years, whereas if you do it yourself, they won’t guarantee it.”
You may be confident in your ability to do the work at a high level of quality. However, the fact that the contractor is licensed is a big guarantee for you and your insurance company that the work will be done correctly.
Depending on the amount of the claim, your mortgage lender may schedule a home inspection. The inspector uses a copy of the adjuster’s report given to the lender as a checklist. This is done for a couple of reasons.
An inspection protects you against work that’s done in a substandard manner. Depending on the size of the claim and the status of your loan, multiple inspections could take place throughout the repair process.
“Inspections from the mortgage company are only to help to make sure that the repairs are up to par and that they don’t see anything that could cause further damage down the road,” Blevins adds. “Inspectors are there to make sure the home is being repaired to the same, if not better than, before the claim.”
The second reason is that the mortgage company has a responsibility to protect its investment and make sure the house will continue to hold its value. This is important to investors in your mortgage, like Fannie Mae, Freddie Mac and the U.S. Department of Housing and Urban Development.
For this reason, your lender may be listed on the checks from the homeowners insurance company and, if so, will need to endorse them. If the work is done in stages with multiple inspections, lenders may give the funds back to you in disbursements rather than all at once.
What to Expect After Your Claim
Depending on the nature and cost of repairing your claim, there’s a possibility that your homeowners insurance costs could go up when the dust settles.
It may not be fun, but your home’s history has an effect on your insurance premiums. It’s not a guarantee that the price of your insurance will go up after a claim, but it’s something you should be prepared for.
For more information on what affects your insurance costs, we’ve put together a list of factors that can drive your premiums up.
Rocket Mortgage® Insurance Claims Process
We’re going to go over the process for our clients to file an insurance claim. Know that there are additional details and guidance if you log into your Rocket Account1 at this link.
In all cases, your insurance provider should be contacted first. They’ll send a professional to your home to determine the amount of damage and how much it will cost to repair. They should also provide you with a copy of what’s known as a loss or adjuster’s report or settlement agreement. Finally, you’ll get a check for the repairs.
After you get the check, we ask that you sign it and add your loan number to the memo line before sending it back to us at the following address:
Attn: Servicing Documents Property Repairs
635 Woodward Ave.
Detroit, MI 48226
After you send it to us, we’ll endorse the check and get it back to you via overnight mail so you can get going on your repairs.
If your claim is greater than $50,000, there are a few more steps to take into consideration.
Again, the process begins with contacting your insurance provider and having them send out an adjuster. For amounts over $50,000, we request that in addition to the signed check and loan number, you send us all pages of your loss report. We’ll also need the following documents from your contractor:
- Contractor licenses in the states that require them
- Lien waivers in states that require a lien waiver: Arkansas, Illinois, Missouri, Montana, New Hampshire, North Carolina, Oregon, Texas and Virginia
You can return these documents several ways:
- Upload documents through your Rocket Mortgage®
- Email them to ServicingHelp@QuickenLoans.com.
- Send a fax to (877) 382-6522.
- Send them through the mail to the above address.
When we receive your signed check and insurance loss report, we’ll overnight you a check for $50,000 so you can get started on repairs. In order to receive additional funds, we’ll need the documentation from your contractor.
We’ll send you monthly progress surveys and when you’re ready, we’ll schedule a free progress inspection. You may also respond to the survey by calling (866) 947-8425.
Once progress is verified, more funds will be disbursed. Depending on the size of the repair, you might have a couple of progress and inspections.
If you’re 30 or more days behind on your mortgage payment or your home has been deemed a total loss, give us a call at (888) 980-8022 for instructions on what to do in your situation.
I hope you don’t have to put in a homeowners claim anytime soon, but if you do, now you’re prepared. If you have any questions, leave them for us in the comments.
1 Rocket Account is your account created in connection with Rocket Mortgage®, Rocket Loans®, Rocket Homes® or Rocket HQSM. Quicken Loans, Rocket Homes Real Estate LLC, Rocket Loans® and Rocket HQSM are separate operating subsidiaries of Rock Holdings Inc. Each company is a separate legal entity operated and managed through its own management and governance structure as required by its state of incorporation, and applicable legal and regulatory requirements.
If so, subscribe now for tips on home, money, and life delivered straight to your inbox.