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Frequently Asked Questions about Fire/Smoke/Explosion Damage



Important note: Insurance coverage varies by company and by policy. Read your policy carefully to understand your exact coverages. If you have questions about your coverage, call your insurance agent or your company.

General FAQs

Q. I lost my insurance policy and I don't know who my agent is. Can I get a copy of my policy? How can I find out who my insurance company is?
A.
Call your insurance company to get a copy of your policy or to learn the name of your agent. If you don't remember who your company is, call your lienholder. If you paid your insurance premium by check, call your bank to get records of the checks you've written and the payees. If you paid by credit card, call your credit card company.

Q. What do I do if I don't have any insurance on my property?
A.
If your property is uninsured, you might have to pay to repair or replace your property out of your own pocket. You might be able to get help from your community or from assistance organizations like the American Red Cross. Call the Red Cross at 1-800-733-2767 or visit its website at www.redcross.org. If your property is in a state-declared disaster area, call the Texas Division of Emergency Management at 512-424-2138 or visit www.txdps.state.tx.us/dem/index.htm. If the area is a federal-declared disaster area, you might be able to get help from the Federal Emergency Management Agency (FEMA). Call FEMA at 1-800-621-3362 or visit www.fema.gov.

Q: Our house was destroyed. Should we continue to pay our insurance premiums?
A: Yes.

Q. I've received a check from the insurance company, but I'm not satisfied with the amount. I plan to file a complaint to request additional payment. Should I cash the check? If I cash the check, does it mean that I accept their decision and amount of payment?
A.
If you're not satisfied with the amount of your settlement, talk to your adjuster or insurance company before cashing the check. Cashing the check is often considered acceptance of the company's settlement offer, which would release it from any additional liability for your claim. Read both sides of the check carefully. Some companies include a disclaimer on their checks that stipulates that cashing it means you've accepted the settlement as final.

Make sure you understand whether the check is a full or partial payment on your claim. In some cases, a company will make only a partial payment so that you can begin repairs. It will pay the remainder of your claim after you give the company proof that you made the repairs. If you're not sure whether a check is for a full or partial payment for your claim, talk to your insurance company or agent.

Q. If my property is financed, how are claim checks issued? Do checks from insurance companies have to be endorsed by me and the lienholder? If checks are issued to both me and the lienholder, how do I collect?
A.
In most cases, the insurance company will make the check payable to both you and your lienholder. This means both you and the lienholder will have to endorse the check before it can be cashed. You and the lienholder would then agree on conditions for the release of funds. In some cases, the lienholder may keep the money and release it to you as repair work is completed.


Q. What should I do if my lienholder cashed my settlement check without my knowledge or endorsement?
A.
Call the Texas Department of Banking at 1-877-276-5554 or visit its website at www.banking.state.tx.us.

Public Adjuster FAQs

Q. Do I have to hire a public insurance adjuster to help settle my insurance claim?
A.
No. Public insurance adjusters charge fees to help negotiate claim settlements with insurance companies. Be aware that the public insurance adjuster fee is normally a percentage of the claim settlement and therefore is paid out of settlement money you get from an insurance company. If you decide to hire a public adjuster, make sure the adjuster is licensed and that you understand how much you'll have to pay.

Q. Are there any limitations on the compensation of a public insurance adjuster?
A.
Yes, the following limitations apply:
If an insurance company commits to paying the policy limits of certain claims within 72 hours of the date on which you report the loss to the insurance company, the public insurance adjuster is entitled only to reasonable compensation for time and expenses and may not receive a commission consisting of a percentage of the total amount paid by the insurance company. The public insurance adjuster's total commission may not exceed 10 percent of the insurance claim settlement. A clear statement of the public insurance adjuster's commission must appear in the public insurance adjuster's written contract with you.

Q. Can a public insurance adjuster help repair my property?
A.
No. A public insurance adjuster may not participate, either directly or indirectly, in the reconstruction, repair, or restoration of damaged property that is the subject of a claim adjusted by the public insurance adjuster.

Q. Do public insurance adjusters have to be licensed by the Texas Department of Insurance?
A.
Yes. To do business in Texas, public insurance adjusters must be licensed by TDI. You can verify the license status of a public insurance adjuster on the TDI website at www.tdi.texas.gov.



Auto FAQs

>General

Q. I lost the title to my car. How can I get a replacement title?
A.
Call the Department of Motor Vehicles at 1-888-368-4689 or visit its website at www.txdmv.gov/vehicles/titles.htm to request a replacement title.

Coverage

Note: Coverage varies by policy. Read your policy carefully or talk to your agent or insurance company to understand your specific coverages.

Q. If my car is damaged and my policy only provides liability coverage, is there any assistance available?
A.
If your auto insurance policy provides only liability coverage, it will not pay to repair or replace your car. If your car was damaged in a state-declared disaster, call the Texas Division of Emergency Management at 512-424-2138 or visit www.txdps.state.tx.us/dem/index.htm. If the damage occurred during a federal-declared disaster, call the Federal Emergency Management Agency at 1-800-621-3362 or visit www.fema.gov.

Q. Is my vehicle covered for fire, smoke, or explosion damage?
A.
Yes, if you have comprehensive, or other than collision, coverage. Read your policy's declaration page to learn whether you have comprehensive coverage. If you don't have a copy of your policy, call your agent or company.

Q. My car was damaged and I had to rent a car. Does my auto policy cover the cost of renting a car?
A.
It depends. Some policies include rental coverage and others don't. Read your policy carefully to learn whether you have this coverage. You can also call your company or agent and ask. If you do have rental coverage, the insurance company will pay up to the limit specified in the policy for a reasonable amount of time to repair or replace your vehicle. Coverage for rental reimbursement typically ends when your vehicle is determined to be a total loss.

Q. I had to evacuate and the property I'd loaded into my car to move was stolen. Will my automobile policy pay to replace it?
A.
Generally, a personal automobile policy does not cover personal property. Most homeowners insurance policies provide coverage for personal property in your vehicle.

Q. Does my policy cover damage to my recreational vehicle, motorcycle, and off-road vehicles?
A.
Recreational vehicles, motorcycles, and miscellaneous vehicles may be covered by various types of insurance policies.

Totaled Vehicles

Q. How do I determine whether my damaged car should be totaled?
A.
Insurance companies decide whether or not to total a car on a case-by-case basis. Normally, an insurance company will consider your car a total loss if the cost of repair plus the salvage value equals or exceeds the actual cash value of the vehicle prior to the loss.

Q. My car was totaled. The insurance company is going to pay the Blue Book value, but I still owe the lender substantially more than that. Doesn't the company have to pay what I owe on the car?
A.
Probably not. Most policies pay only the current market value of a car. This is called the actual cash value, or ACV, of your car. To cover the difference between the market value of your car and what you actually owe, you need an endorsement or separate policy that provides guaranteed asset protection (GAP) coverage.

Q. What if the insurance company total my car but I want to keep it?
A.
You and the insurance company may negotiate a settlement that allows you to keep the salvaged car. You would then be responsible for the cost of repairs and would have to comply with laws regarding owner-retained salvage. For questions about owner-retained salvage, call the Department of Motor Vehicles at 1-888-368-4689. You should also call your lienholder to find out whether keeping the salvaged vehicle affects the lien.

Q. What will happen to the car's title if my car is totaled? How is the title on a totaled insured vehicle processed?
A.
If you own the car outright, you must sign the title over to the insurance company. In exchange, the insurance company will give you a check for the market value of your car, depending on the terms of your policy. If you still owe money on your car, the insurance company may coordinate with you and your lender to have the title transferred to the insurance company. The insurance company will usually pay the lender the amount you still owe, and then pay you the balance. For example, if the insurance company determines that the market value of your car is $10,000, and you still owe $8,000, the insurance company will pay $8,000 to the lender to release the lien on the car. The insurance company will then issue a $2,000 check to you after you sign over the title. For information about how titles are processed, call the Department of Motor Vehicles at 1-888-368-4689, or visit www.txdmv.gov/vehicles/titles.htm.

Q. What if I don't agree with the settlement offered by the insurance company?
A.
Ask the adjuster to explain how he or she determined the settlement amount. Make sure the adjuster considered any special features, equipment, or upgrades to your car. If you still disagree with the company's settlement offer, you may request an appraisal of the loss.

Mobilowner/Mobile Home FAQs

General

Q. Are mobile homes covered by a homeowners policy?
A.
Mobile homes are insured under various types of policies, including a homeowners policy. However, most mobile homes are insured under a mobilowners policy. Check with your agent or company to see what type of policy you have. If you have a homeowners insurance policy, refer to the Homeowner FAQs.

Q. I lost the title to my mobile home. How can I get a replacement title?
A.
Call the Department of Housing and Community Affairs, Manufactured Housing Division, to request a Statement of Ownership and Location (SOL) to your mobile or manufactured home. Contact numbers and additional information are online at www.tdhca.state.tx.us/mh/faqs-sol.htm.

Loss of Use


Q. Does my mobilowners policy provide additional living expense reimbursement?
A.
Most mobilowners policies will pay some of your additional living expenses if your mobile home is destroyed or damaged by a peril the policy covers. Some companies may provide an option to increase this coverage.


Coverage


Note: Coverage varies by policy. Read your policy carefully or talk to your agent or insurance company to understand your specific coverages.

Q. My mobile home was damaged by an explosion. Will my mobilowners policy pay for my damage?
A.
Yes, subject to the limitations of your particular policy. Damage from fire, smoke, or an explosion are typically covered perils.

Q. Is smoke damage from a fire covered?
A.
Most mobilowners policies provide coverage for damage to property caused by smoke.

Q. Will my mobilowners policy reimburse me for service charges assessed by the fire department for responding to a fire or explosion at my property?
A.
Depending on the policy, you may have some limited coverage for fire department service charges.

Q. Fire caused my tree to fall on my mobile home and damage my roof. Does my mobilowners policy cover the damages to my home and would the company pay to remove the tree from my property?
A.
Fire is a covered peril and your policy would most likely pay for the damage to your roof. The tree itself may be covered, depending on policy language. In addition, most mobilowners policies provide a limited amount of debris removal coverage. Some insurance companies may provide an option to increase coverage.

Valued Policy

Q. My mobile home was destroyed in a fire. Does my insurance company have to pay me the full amount of my policy?
A.
Read your policy or talk to your agent or insurance company to determine whether your policy is a valued policy. A valued policy, also called a liquidated demand policy, pays the limit of liability shown in your policy if the property is determined to be a total loss because of a fire.

Homeowner FAQs

General

Q. Can I make repairs to my property immediately?
A.
Generally, you should make temporary repairs to protect your property from further damage. Don't make permanent repairs until an adjuster has inspected the damage. Most policies cover the cost of necessary temporary repairs, so save your receipts for materials and labor. It's a good idea to take pictures of the damage before making temporary repairs. Read your policy or talk to your agent or insurance company for more information.

Q. What's the difference between the different types of homeowners policies? How does a dwelling policy differ from a homeowners policy?
A.
Homeowners policies may either provide "all risk" or "named peril" coverage. All risk policies typically cover all perils except those specifically excluded by the policy. Named peril policies cover only those perils specifically named or listed in the policy. A homeowners policy provides coverage for the dwelling (the home's physical structure), personal property, and personal liability. A dwelling policy covers only the dwelling. Some dwelling policies might also cover personal property.

Q. What is replacement cost coverage?
A.
Replacement cost coverage replaces your damaged dwelling and personal property with new items and without deducting for depreciation. In most cases, if your policy includes replacement cost coverage, you will only have to pay the deductible. See the Claim Payments section in this FAQ for an explanation of the replacement cost claim process. Some homeowners and dwelling policies automatically include replacement cost coverage for the dwelling; others add the coverage by endorsement for an additional premium. Some policies provide only actual cash value coverage. This means the policy will pay only the current market value for your property. For example, if you have a 10 year-old television set that's destroyed in a fire, an actual cash value policy will pay you only what a 10-year-old television set is worth. It won't pay you for a new TV. Read your policy or talk to your agent or insurance company to learn whether you have replacement cost or actual cash value coverage.

Loss of Use

Q. If I have to evacuate, will my homeowners policy pay for my additional living expenses?
A.
It depends on the policy. Some policies pay for additional living expenses if a civil authority prohibits you from using your residence because of direct damage to neighboring premises caused by a covered peril. This coverage is generally limited to two weeks. Read your policy or talk to your agent to learn how your policy deals with additional living expenses.

Q. Will my homeowners policy provide loss of use coverage on my rental property during an evacuation ordered by civil authority?
A.
Your homeowners policy may provide coverage for loss of fair rents or fair rental value if a civil authority orders an evacuation.


Q. Does a homeowners insurance policy cover my expenses if my home is uninhabitable because of damage from a fire or explosion?
A.
Homeowners and renters policies usually cover some of your additional living expenses if you have to move temporarily because of a covered peril. ALE coverage typically pays the cost of staying in a hotel, motel, or other temporary shelter. Be sure to read your policy carefully or talk to your agent or insurance company to understand ALE coverage limitations. Policies will pay your additional living expenses only for a certain amount of time and only up to a specific dollar limit. If the damage forces you to move, be sure to tell your insurance company where you are and how to reach you by phone.

Q. There is a power outage in my area and we have no utilities in our home. Will my policy pay for a hotel until power is restored?
A.
Probably not. A homeowners policy generally provides ALE only if your home is damaged by a peril covered in your policy and, because of the covered damage, the residence is unfit to live in.

Q. When does my loss of use coverage begin to cover my expenses?
A.
Generally, for policies that include coverage ALE and loss of fair rents or fair rental value, coverage begins once a covered peril makes the residence premises wholly or partially unfit to live in. However, even if your policy includes ALE coverage, it may be some time before you are reimbursed for these expenses. Keep detailed records and receipts of all potentially reimbursable expenses. Read your policy or talk to your agent or insurance company to better understand how your ALE coverage works.

Q: Do I have to give receipts to the insurance company to get ALE? Does the insurance company have to advance me money for ALE?
A:
Yes, you must submit receipts to the insurance company. The company is not required to advance you money, but many insurance companies will. Review the section of your policy that addresses ALE.

Q: If I received payment for a total loss but want to relocate and not rebuild my house, will I still receive ALE?
A:
Yes. Most homeowners policies will pay your additional living expenses for the reasonable time required for your household to become settled. Review your policy.


Coverage

Note: Coverage varies by policy. Read your policy carefully or talk to your agent or insurance company to understand your specific coverages.

Q. Is smoke damage from a fire covered?
A.
Most homeowners policies cover damage to property caused by smoke from a fire.

Q. Will my homeowners policy pay for fire damage to my fence?
A.
Most homeowners policies provide some coverage for fences under the "other structures" coverage.

Q. Does my homeowners policy cover my detached garage or storage shed?
A.
It depends on the policy. Generally, coverage for other structures, such as a detached garage or storage shed that are set apart from the dwelling by a clear space, is included in the coverage for your insured dwelling. The total amount of coverage for other structures is usually 10 percent of the dwelling coverage. Some policies may not provide coverage for other structures, such as portable buildings or buildings that are used for business purposes.

Q. Will my homeowners policy reimburse me for service charges assessed by the fire department for responding to the fire at my property?
A.
Depending on the policy, you may have some coverage for fire department service charges.

Q. Fire caused my tree to fall on my house, which caused damage to my roof. Does my homeowners policy cover the damage to my house and pay for the removal of the tree from my property?
A.
Homeowners policies provide coverage for fire damage; therefore, the roof damage caused by the tree is covered. Most policies also pay to remove a tree if a covered peril caused it to fall on and damage covered property. Some policies limit the coverage for removal to $500 per tree and $1,000 per loss.

Q. Fire damaged some trees on my property. Will my homeowners insurance policy pay for the loss to and removal of the trees?
A.
Yes. Fire is a covered peril for trees, shrubs, plants, and lawns. Most policies pay $250 to $500 per tree, shrub, or plant damaged in a fire, up to a maximum amount stated in the policy. Read your policy to learn the amount of coverage.

Q. The food in my refrigerator spoiled because of loss of power in my area. Will my homeowners policy pay for the loss?
A.
Most homeowners policies will pay up to $500 for spoilage of refrigerated or frozen food caused by an off-premises power failure, if the power failure is a direct result from a peril covered in your policy. If the power failure is a result of physical damage to the dwelling or any equipment contained in the dwelling and is caused by a peril covered in your policy, coverage is not limited to $500. Some companies don't pay for a loss resulting from a power failure off premises unless added by an endorsement.

Q. Is there coverage for loss avoidance measures?
A.
Most homeowners insurance policies provide some coverage for expenses and damage to covered property that you remove to ensure it doesn't receive more damage.

Q: Is clothing covered under personal property coverage?
A:
Yes, clothing is part of your personal property.

Q. If I evacuate because of a fire and my personal property is damaged or stolen while in another location, will my personal property be covered by my homeowners policy?
A.
Homeowners policies provide coverage for personal property while away from the insured location or premises. Most policies limit the amount of this coverage to either 10 or 20 percent of the total amount of coverage for personal property. Some policies limit theft coverage for personal property while away from the residence premises at any other residence owned by, rented, or occupied by you, unless you are temporarily living there. Generally, a personal automobile policy will not cover personal property.

Valued Policy

Q. My home and all of my outbuildings and fences were destroyed in the fire. Does my insurance company have to pay me the full amount of my policy?
A.
Under most property policies in Texas, if the insured property, other than personal property, is a total loss because of fire damage, the insurance company must pay the full amount under the policy for each destroyed item covered by the policy. This is known as "liquidated demand." For some property, like your home, the policy will include a dollar amount for the limit of liability. For other property, like other structures and fences, the coverage is often a percentage of the coverage limit for the dwelling. For example if your home is insured for $100,000 and the policy covers other structures for 10 percent of the dwelling limit, you would have $10,000 available for other structures.

If you have a mobilowners policy, or if you have insurance with a farm mutual or surplus lines insurance company, read your policy or talk to your agent or insurance company to determine whether it includes coverage for liquidated demand.

Q. What if only my home is destroyed and not my outbuildings. Will the liquidated demand provision in my policy apply?
A.
Read your policy or talk to your agent or insurance company to determine specific coverage. Under most policies, you will only be paid for the damage to your home and to your trees, shrubs, and lawn in accordance with your policy's coverage limits. Liquidated demand does not apply to personal property.

Claim Payments

Q. I got a check from my company for damages to my home. It's going to cost more to repair than the amount I received. Did they pay me enough for damages?
A.
That depends on several things. If you have replacement cost coverage, your claim may be paid in two stages. Your first claim check will be for the actual cash value (ACV) of the damaged property. ACV is determined by taking the replacement cost for the covered loss and deducting for depreciation. Once you repair or replace your damaged property, the insurance company will pay the rest of your claim, up to your policy's dollar limits. This amount will usually not exceed the amount you spent to replace your property. You usually must complete repairs or replacements within a specific period of time, usually 180 to 365 days from the date of loss. Some policies let you extend that time frame if you request it in writing.

In most cases, if you adequately insured your property, you should only have to pay your deductible. If you believe your company is not offering you enough to repair or replace your property, you may ask for an appraisal. Have your company explain the basis for its payment and clarify if additional funds are forthcoming. It's important to review your coverage regularly to ensure that your home is adequately insured. Read your policy or talk to your agent or insurance company if you have questions about your policy limits or coverages.

If your policy does not include replacement cost coverage, you will probably only recover the actual cash value of the damaged property. This means you probably won't be able to buy a new item to replace the one you lost.

Q. What do I do it the insurance company issued my settlement check directly to my mortgage company? How long can a mortgage company hold money before releasing any to me? Can the mortgage company disperse the money in small increments? Can they withhold disbursements?
A.
Your insurance company cannot make a check for a claim payable only to the mortgage company. If they do, you should not accept it and request that the check be reissued to you and your mortgage company jointly. If you still owe money on your home, the insurance company will most likely send the check to your mortgage company. Both you and the mortgage company will have to endorse it before it can be cashed.

The Texas Insurance Code requires your mortgage company to tell you what its requirements are for releasing the money to you. It must give you this notice within 10 days after it receives the check from the insurance company. Once you have given sufficient evidence to show that you have met those requirements, the mortgage company has 10 days to release the funds.

If you have a concern about a private mortgage lender, call the Federal Trade Commission at 1-877-382-4357. You may also visit its website at www.ftc.gov. Additionally, you can call the Office of Consumer Credit at 800-538-1579 or visit its website at www.occc.texas.gov.

If the lender is a state-chartered savings and loan or bank, call the Texas Department of Savings and Mortgage Lending at 512-475-1350.

If the lender is a federal-chartered lender, call the Office of the Comptroller of the Currency at 1-800-613-6743.

In some instances, the U.S. Department of Housing and Urban Development (HUD) can help. Call HUD at 800-225-5342.

Commercial Property FAQs

Loss of Business Income and Extra Expenses

Q. My business had to close because of fire damage. Will my commercial property or business owners policy cover my loss of business income or the extra expenses I incur to continue operations?
A.
If your policy includes coverage for loss of business income or extra expense coverage, or if you have a separate loss of business income or extra expense policy, your loss of business income or the extra expenses you incur to continue your operations at your current location, or a temporary location, would be covered.

Q. My business did not suffer any direct damage, but I had to close because of evacuation orders by local authorities. Will my commercial property or business owners policy cover my loss of business income or the extra expenses I incur to continue operations?
A.
If your policy includes coverage for loss of business income or extra expenses due to evacuation by order of civil authority, your loss of business income or the extra expenses you incur to continue your operations at your current location, or a temporary location, may be covered, depending on policy language.

Q. I had to close because an explosion cut off utility services at my business. Will my commercial property or business owners policy cover my loss of business income or the extra expenses I incur to continue operations?
A.
Your losses may be covered, depending on policy language. Check with your agent or insurance company.

Q. My business had to close because of fire damage. Will my commercial property or business owners policy cover the damages to my buildings and business property?
A.
Yes, fire and explosion are perils usually included in commercial policies.



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