Hurricane warning: Don't let your home insurer blow you over

With the 2014 Atlantic hurricane season under way, now's a good time to get ready to weather the big wind that home insurers blow to knock down victims' damage claims. 

In the business of home insurance, push comes to shove the bigger the storm and the larger the claim. So we dug into the last three surveys of 31,861 subscribers by the Consumer Reports National Research Center to find out how well insurers lived up to the expectations of 1,746 claim filers hit by four major storms over the last nine years: Katrina (2005), Ike (2008), Irene (2011), and Sandy (2012).

Surprisingly, the median payout to victims of Hurricane Sandy, as a percentage of the median claim filed, was lower than the percent paid to claimants walloped by the mega-Hurricane Katrina. The median Katrina claim was $15,000, and insurers paid a median $12,000 or 80 percent. The median Sandy claim was $4,500, but insurers paid a median $3,200 or only 71 percent.

That means you need to stand tough and stand up to make sure you get everything you're entitled to under your policy. Here's how to do it.

• Check your policy now, well before you get glued to the Weather Channel, and make sure you're sufficiently covered. Ask your current insurance agent about your home's insured value and the applicable "minimum" coverage required for you to get full protection in a total loss. Review the "perils" listed in your policy, and fill "exclusion" gaps in your coverage with separate insurance for flood, wind, and hurricane. If you already have hurricane insurance, examine the special limits, exclusions, and deductibles that apply to those storms.
• Take pictures of the damage as soon as it's safe and practical after a hurricane pummels your house. Then take steps to prevent further damage, such as covering a hole in the roof with a tarp and moving undamaged furniture and other possessions to a safe place.
• Keep receipts for any money you spend to prevent further losses. But don't repair anything or dispose of ruined property until an insurance adjuster has examined everything.
• Report the loss to your insurance agent as soon as practical. Most big insurers now have smart phone apps that make taking pictures (with the phone's camera) and filing claims a snap. Alternatively, your insurer will send claim forms, which you should return as soon as you can. Ask about the time limit for filing claims, details about what's covered, and how to get repair estimates. If you have an inventory of your possessions, submit it with your claim along with any photos of damage, receipts, police reports, and other evidence that documents the loss.

Get the best protection by choosing the best home insurers. Consumer Reports subscribers can find out who those companies are by checking our latest ratings. 

• Keep notes about any promises that insurance representatives give you, the date and time of each contact, and the name and title of each person you deal with. Make sure the adjuster sees everything. Ask for a copy of his or her report and check for mistakes. You're also entitled to a copy of your entire claims file. Copy everything you give the adjuster and ask for a receipt.
• If the adjuster advises you to start repairs, get that in writing so promises and permissions can be accurately passed on if your case is transferred to another person. If you get payments up front for temporary living expenses, don't sign any documents that make them your last payments or that surrender your right to collect further payments.
• Ask to see the exclusions in writing if your insurer says your policy doesn't cover certain damages or if the damage estimate and claims payment offer are too low. If you've been misled by policy wording, contact a local lawyer who specializes in insurance law. The Consumer Federation of America says that courts have consistently ruled in favor of policyholders on such ambiguities. 
• Tap your contractor's expertise to verify proper repair costs. If you have a dispute over the damage amount, request a sit-down with the contractor and adjuster to go over the estimate line by line. Still disagree? Get a second opinion from an independent contractor. Patience, persistence, and legwork getting multiple estimates are important. 
• Consider getting help from a public adjuster if you reach an impasse with your insurance company's adjuster. You'll pay a hefty fee, typically 10 percent of the policy payout. But one Florida study of more than 76,000 claims found that policyholders who used public adjusters got payments that were 19 percent to 747 percent larger than those who didn't, though the cases took longer to settle. 
• Learn from our subscriber's hard Sandy experience. Justin Rubin, who rode out Hurricane Sandy in his Long Beach, N.Y., home and suffered $80,000 in damages, managed to recover about 70 percent of his losses through pluck, perseverence, and his expertise in home insurance. Get all the details in his success story.

By other measures, our analysis also found some good news that insurers are doing better by homeowners since Katrina.

For example, 27 percent of readers who filed claims related to Sandy, which smacked the Northeast, had problems with their insurer's claim handling or payment, and 79 percent were satisfied with how their home insurer performed.

That's vastly better than homeowners' experience with Katrina, which raked the Gulf coast from Florida to Louisiana, when 50 percent of claimants suffered problems and only 51 percent were highly satisfied with their home insurer's performance.

Claimants from Hurricane Irene assessed their insurers similarly to those from Sandy. About 35 percent of Hurricane Ike victims suffered problems with their insurers, but 73 percent were highly satisfied with their carrier. 

But note that hurricane severity plays a part in insurer performance and customer satisfaction, too. As devastating as it was, Sandy, for example, was no Katrina, the most destructive hurricane in modern U.S. history. Katrina, a category 3 hurricane, packed winds of up to 130 mph. Sandy, on the other hand, had weakened below hurricane strength when it made landfall in New Jersey.

And despite Sandy's catastrophic storm surge along the densely populated and expensive New York and New Jersey coasts, that storm's $50 billion in damages were less than half of Katrina's $108 billion.

—Jeff Blyskal