4/13/2011 11:07 AM ET|
Get the most from insurance claims
If you understand what your homeowners policy covers and how to properly document damage from a disaster, you're more likely to get what you're owed.
Homeowners are tallying up the damage inflicted by a brutal winter, and insurance claims are sure to mount with each discovery of a damaged roof or burst pipe.
The challenge for many is knowing whether they are getting the full compensation their policies should provide.
"We expect insurance companies to stand behind us when disaster strikes, but far too often we see insurance carriers deny, delay and underpay legitimate claims," says Phillip Sanov, a Houston attorney and the head of the Lanier Law Firm Bad Faith Insurance Practice Group.
Insurance companies, increasingly focused on their bottom lines and appeasing shareholders, will try to cut corners when it comes to claims, Sanov says.
"It's not necessarily the individual (claims adjuster) who comes out and has his feet on the ground," he says. "He has to answer to two or three levels above him and do what he's instructed to by the corporate office somewhere. It's a trickle-down effect."
Underpaying claims happens as often as it does because many policyholders have little understanding of the nuances of their coverage. There are also emotional considerations. After snow crashes through a roof or gale-force winds shatter windows, many homeowners just want to deal with the emergency at hand, avoid a prolonged battle and cut their losses.
"Insurance companies know that nine out of 10 policyholders are just going to give up and say, 'It's not worth it, I don't want to fight anymore,'" Sanov says. "It's only 10% to 20% that will really pursue a claim and get an advocate to fight for what they deserve."
The Florida Legislature's Office of Program Policy Analysis and Government Accountability issued a report last year that looked at the relationship among public adjusters, policyholders and the state-run Citizens Property Insurance program -- an insurer established for those otherwise unable to afford or get coverage -- in the wake of the 2005 hurricane season.
That audit found that policyholders who retained public adjusters for their claims got 747% higher compensation than those working solely with their insurance company. For non-hurricane claims, policyholders got 574% higher compensation.
"The average insured does not know what he is entitled to," says Joseph Zevuloni, the president and CEO of Zevuloni & Associates, a Florida-based public adjusting firm. "They will look at something that is broken and try to figure out what it will cost to fix. However, there are other damages they are not trained to look for or know any better. By the time they find out, the insurance company may say that they waited too long, never reported it, that they don't deserve it or it is not included in their policy."
Six steps homeowners should be prepared to take before and after filing a claim:
Carefully review coverage
Don't wait for an emergency or the need to file a claim before you fully review and understand your existing policy. And, before filing a claim, review your policy in light of the damage or have a professional do so to fully understand what your policy covers and what it doesn't. Coverage should be periodically reviewed to make sure it is adequate and fits your needs.
"Examine your policy ahead of time and know what they are paying for," Zevuloni says. "The average consumer who goes out and buys a policy has no clue what it actually says. Many terms and much of the language are intentionally very ambiguous. The average consumer cannot interpret it accurately without some professional assistance."
Policyholders may be underinsured or face exclusions for things they need.
"Let's say your house was built 30 years ago and it doesn't conform to the same building standards as today," Zevuloni says. "If you apply for some kind of a building permit, they will require you to do certain things to bring it up to code. The policy should provide for that. If it doesn't have that language, you are out of luck."
Take photos and video
The availability and ease of digital cameras allow homeowners to provide the insurer with "before and after" documentation.
"A week before a storm hits (if you know it's coming), go take pictures of your walls and your roof," Sanov says. "The most reasonable thing for a person to do is to take pictures inside their home, of the walls and the ceiling. The carrier will not be able to claim damage was pre-existing or normal wear and tear."
Document the damage
Beyond photographing or making a video to show damage, homeowners can hire their own adjuster, who will act independently of one provided by the insurance company.
Keep track, and have duplicate copies, of all estimates and receipts. Also, prepare a detailed inventory of all damaged possessions, with their approximate age, initial price and estimated cost to replace.
Make temporary repairs
Don't wait for an insurance adjuster to start making temporary repairs. Broken windows and leaking roofs should be fixed right away so the insurance company cannot dismiss some claims as the result of waiting too long to do so. Save all receipts and documentation, as the insurer will likely reimburse most of these expenses.
Don't assume something isn't covered
Just because a claim is initially rejected doesn't mean the policy doesn't say otherwise.
"This happens to us all the time -- an insured will call in and say their claim was denied because mold is not covered and even their agent agrees," Zevuloni says. "But if the mold was caused by a water leak or water damage, it may be covered. If there is causation, the coverage may be limited to $10,000 to $15,000 on most policies, but it is covered."
Gird for battle
"It does become more of a fight," Sanov says. "You hate to talk in those terms, but policyholders are fighting with their insurance company. As claims mount and each adjuster is given a bottom line to preserve, the problems multiply and become greater and greater all the time. It is hard, in the position I'm in, to say anything in defense of them, given the way I've seen policyholders treated."
For those concerned that countering a claim will be costly, Sanov says most attorneys and public adjusters work on a contingency basis. Many states also allow the cost of such expertise to be reimbursed by an insurance company if an initial claim is found to have been inadequate.
Policyholders need not fear their insurer dropping them or raising rates if they challenge a payout. "They will not drop you because of a claim," Zevuloni says. "They will only drop you if you are a risk to them -- if they find out, for example, that you store propane tanks in the house or you have exposed wiring."
This article was reported by Joe Mont for TheStreet.
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the main thing is do your homework before you need insurance. google FBIC. you will get a list of the top 50 good and bad faith insurance companies. do not be fooled by the tv ads. if you happen to use an insurance company at the top or near the top of the bad faith insurers make sure you ALWAYS record ANY conversations with the adjuster. there are reasons a company is listed on the bad faith list. a public adjuster will cost you ~ 10%. if you use one make sure you both are on the same page. if you are messed over an attorney, once they get the case file, may be able to recover lots more money if the adjuster hides/lowballs anything from your claim. believe me, i know.....
and using the state dept of insurance usually does not do much good. insurance companies own a lot of people.
This article is a joke. The author's references are a bad faith attorney and a public adjuster? They make a living arguing with insurance companies. A public adjuster is not an "independent" adjuster as they are paid a % of your claim.
I no long handle property claims but did for 15 years and the adjuster is held to a high standard by each state's Fair Claims Practice Act. The problem with most homeowner's claims is a misunderstanding of how process works and their expectations. Yes policy language is confusing, even for the adjuster, but that is due to litigation and an effort to remove any ambiguity. If there is ambiguity, the court will always side for the insured and companies know that. IF they are telling you something is not covered, that is true 9 out of 10 times and the one time is not intentional.
Most disagreements come on denied coverage or limits built into the policy.
This article needs to be reviewed, revised , and rewritten:
-Carefully review Coverage: Do this when you take the policy out w/ the Agent. Is this an open periled policy or named peril policy? ACV or Replacement Value? Exclusions? Endorsements to add coverage?
-Take Photos and Video: Man, that is not going to help if the footage and film are 20 years old. Keep it up to date, and valuables should have a stated value (jewelry, art, etc.)
-Document the damage: Man, a 2001 Magnavox TV that costs you $1000 is not worth anything today because you can get a 40" Flatscreen from Sony for $1500. Your TV is obsolete and the insurance company will use their own vendor to view comps and you will sign an Affidavit to verify damages to personal items.
-Make Temporary Repairs: Yes, who wants continued water leaking thru the roof or thru a damaged window? It is called Mitigation; limit the amount of your own loss.
-Don't assume something isn't covered: Man, I would be upset if the insurance company came out, did the inspection, made their denial only to later be called back out and overrule their prior decision. Someone does not know what they are doing?
Gird for battle: Multiple Claims can cause Underwriting to raise the Premium or cancel the Policy! Don't believe me, go ahead and try it and you wish you hadn't.
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