JEFFERSON CITY, Mo. – As Missouri consumers work through the post-disaster claims process, the Missouri Department of Commerce and Insurance (DCI) continues to provide support and guidance on several insurance-related topics, including supplemental claims and the recovery process.
“Navigating an insurance claim involves many steps that can be overwhelming and confusing, which adds to the stress of disaster recovery,” DCI Director Angela Nelson said. “We’ve received questions from many consumers about supplemental claims, what they are and how they work. That’s why DCI is here – to answer questions like these and help Missourians through every step of the process as they work to get their lives back to normal.”
Supplements are additional payments from an insurance company beyond the initial settlement amount to help cover unexpected costs that weren’t fully addressed in the original damage estimate. This is often due to additional damages uncovered during the repair process, material cost fluctuations or changes in the scope of work.
If a contractor or repair professional finds that additional damage exists, a supplemental estimate detailing the extra work, materials and associated costs must be prepared and submitted to your insurance company. All supplements must be inspected and approved before repairs are completed, which may require multiple inspections.
It’s important to remember that the settlement process is not a single transaction, and additional claim payments are not necessarily full and final. You’ll likely receive a number of payments for different parts of your claim throughout the repair process.
Depending on the type of insurance contract you have, there are different ways an insurance company will settle your claim. An Actual Cash Value (ACV) settlement allows the company to pay you the amount needed to repair or replace your property minus depreciation, which is the decrease in value of your property due to age and/or use. A Replacement Cost (RC) settlement allows the company to pay you the amount needed to replace an item of equivalent kind at current pricing.
When issuing a settlement, the company will first pay you the ACV of an item (meaning depreciation is withheld). Then, if your policy allows for RC coverage, the company will release the withheld depreciation once repairs have actually been made, allowing you the full replacement cost of your property. Be sure to note the length of time specified in your policy for submitting a replacement cost claim. Many policies specify a replacement cost timeframe of 12, 18 or 24 months.
DCI reminds consumers that the recovery and claims process takes time and differs substantially depending on various circumstances.
“We understand that everyone wants to be back in their homes as soon as possible, and while this is certainly always the goal, it is often not the reality,” Director Nelson said. “Full recovery can take weeks, months or even years depending on the scope and scale of the disaster, extent of the damage, and availability of resources, among many other factors.”
After a major disaster, most people find it takes at least 18 to 24 months to repair or rebuild their homes and replace their possessions. Even minor damages can take longer than expected to repair due to a shortage of contractors or supplies.
Your insurance claim will stay open until the insurer has made all payments you’re entitled to under your policy. You should feel free to contact your insurance company or adjuster for a status on your claim at any time throughout the claims process.
DCI experts are on call to help answer questions about claims and any other insurance topics via the department’s Consumer Hotline at 800-726-7390. Consumers can also visit insurance.mo.gov for more information and resources.
DCI’s post-disaster claims guide is a great starting point for navigating the recovery process after a disaster. DCI has also created a dedicated website full of useful tools to help those impacted by recent severe weather.
DCI is charged with protecting Missouri consumers through oversight of the insurance industry, banks, credit unions, utilities and various professional licensees operating in the state. For more information about the department, please visit our website at dci.mo.gov.