You’re at a disadvantage when you have major house damage or a total loss of your home. You face a home insurance claim process that could easily stretch out for more than a year, require reams of paperwork and leave you exhausted. Here is a look at many of the things that can take people by surprise when they have a large home insurance claim:

1. A claim for a total loss of a house can cost less than rebuilding a damaged house.

Construction from scratch costs less per foot than construction for rebuilding. Often it’s “easier” to fix your problem if your house is simply gone, rather than to try to repair the damaged sections of what’s left. When you start from scratch, you don’t have to incorporate changes that exist with the building, so you have a clean slate. Also, it’s often more costly to retrofit your old house to prevailing code than to start fresh.

2. If you have a mortgage, your insurance checks will be made out to both you and your mortgage bank.

Your mortgage holder is likely listed as a “loss payee” on your home insurance policy, so payments for rebuilding are issued to both you and your lien holder. And don’t expect your mortgage holder to sign over the check to you. Policyholders have to endorse and send the check to the mortgage company, and it will sit in escrow until repairs are made. Mortgage banks typically release the funds back to you in three installments over the course of your reconstruction. Mortgage companies want to be sure your property is repaired before releasing payment to you. As a result, you may have to advance your own money for construction costs until the mortgage company verifies the repairs.

3. Don’t cash any insurance checks marked “full and final settlement.”

In some states, such as California, it’s illegal for an insurer to issue a check like this. You don’t want to cut yourself off from any funds you’d be entitled to if you later discover that not everything has been paid for.

4. Don’t sign a release on your home insurance claim.

This takes the home insurer off the hook for any future payments on your claim. Insurance companies ask the insured to do it when they think there’s a problem or big dispute coming. The home insurance policy does not require the insured to execute a release, so why should you sign?

5. Don’t let your insurance company replace your Pottery Barn stuff with Wal-Mart stuff.

The values of particular items are often disputed in home insurance claims. If you’ve bought expensive items, your insurance company may say it can replace them with very similar items from Wal-Mart or Target. The insured is entitled to be paid for what they had — not a knockoff version of it.

6. Many condo owners have no idea that they need their own home insurance policies.

They think that the condo association’s policy covers their property. However, the association’s policy covers only common areas, typically up to the walls of the condo. If you want your own space and belongings protected, you need an HO-6 home insurance policy. Otherwise, all your belongings, furniture, appliances and cabinets are uninsured. Without an HO-6, you also may have no liability protection if you’re sued for something that happens within your condo, like a slip-and-fall injury.

7. If you’re forced to evacuate, don’t sleep at a shelter.

Your home insurance covers your “additional living expenses” if there’s a mandatory evacuation, including hotels and food — even additional transportation costs. Why sleep on a cot when you could go to a hotel? You don’t realize you have that coverage until you have a loss.

8. After a widespread disaster, insurance companies will bring in company adjusters from out of state who aren’t familiar with local costs.

Adjusters from outside your area may not have a handle on how much electricians, plumbers or other workers charge, or how much it costs to rebuild a house. Often they will rely on a software program called Xactimate, which isn’t very exact if you don’t account for local costs. The insurance company will bring in out-of-state adjusters who are probably not licensed in the state. They’re not as familiar with local building codes. What we saw from the 2007 fires in Southern California was that out-of-state adjusters can’t comprehend that it will cost $800,000 or $1 million to rebuild someone’s house. They can’t comprehend local building values.

9. People regularly settle for less than the total cost of their damages because they are exhausted.

Especially near the end of a complicated claim, such as a total home loss, homeowners just want the process to be over. Even if your policy entitles you to “replacement cost” of your belongings, home insurance companies will initially issue checks for your belongings’ actual cash value. Then, once you’ve replace the items, you must submit your receipts to get the difference between the initial checks and what you actually paid for replacements. In reality, most people don’t go back and submit receipts because they’re so frustrated with the claim, they’re done with it. They’ll settle for less and close the claim and rebuild for less, and the insurance company knows this. Hiring a public claims adjuster can put you on an even playing field with your insurance company. Your insurer may assign three adjusters to work on your claim: one for “additional living expenses,” one for your personal property and one for the building portion of your claim. A public adjuster will be able to explain the process and work on your behalf handling the countless meetings, e-mails, phone calls and paper documents that flow for a large claim.

Read at: http://articles.moneycentral.msn.com/Insurance/InsureYourHome/9-secrets-of-home-insurance-claims.aspx?page=1

Getting away from Reno Real Estate for a moment, Here a few tip I have discovered to help me organize my finances before filing my tax returns.

Review your current system. If you pile your bills on a desk and aren’t sure which have been paid and which are still pending, or if you have trouble locating receipts or invoices, it’s time to make a change.

Save all credit card receipts in one place. A box or file folder is a great place to store this month’s credit card receipts and will give you quick access to compare them to your statement when it arrives. You should keep all receipts at least until you have verified that the charges are correct on your bill. Create a “Receipts to Keep” folder for receipts for items that may need to be returned or that have a warranty or service plan in effect.

Organize your bill paying. Set up a regular time and place to pay bills each month. A good rule of thumb is to coordinate it with your pay schedule. If you are paid on the 15th and 30th, make plans to pay bills at those same times each month. If it makes it easier, you can log your due dates on a calendar. As bills arrive, organize them into “To be Paid” folders and when you pay them, document payment on the statement and file under “Paid.”

Paying bills online can be a great time saver. Whether you use your own financial institution or pay through the vendor’s website, you can often schedule the payments to occur on the day of your choosing. Be sure to jot down the confirmation number as proof of payment.

Pay off credit cards. Make a log with each of your credit card and credit accounts, and list the outstanding balance for each. Set up a schedule to pay off the ones with the lowest interest rates first. When that one is paid off, apply that money to the next card until all balances are paid. Avoid using credit cards to charge more than you can reasonably pay off at the end of the month.

Balance your checking account. At least twice a month, reconcile your bank statement to the bank’s records. This can be done in just a few minutes online, checking off what has cleared your account and making sure you have accounted for any debit card purchases or ATM transactions.

Review your insurance policies. Review all insurance policies to make sure you’re covered properly. Review your life insurance policy to ensure it provides adequate coverage for your family. You can save money by raising your deductibles on auto and homeowners, or renters, insurance. Every few years, shop rates, comparing policies point for point.

Shredding. Purge old files and shred the contents to protect yourself from identity theft. Keep a shredder near your desk and deal with incoming mail immediately. While you should check with your accountant about how long financial records should be retained, a good rule of thumb is to keep credit card statements and tax records for seven years. Keep pay stubs until you get your year-end tax forms, and keep key banking information permanently. If you have not filed a tax return, or have filed a fraudulent return, keep tax records indefinitely.

Check your Credit Report. Consumers can request a free copy of their credit report from each of the three bureaus each year. Set up a regular schedule to get reports from www.annualcreditreport.com. A good rule of thumb is to get the report from one bureau in January, another in May, and the third in September. Notify the bureaus immediately if you find any errors or unusual activity, such as accounts you did not open.

For more information, visit www.cccsinc.org.