Updated: 9/9/2010 9:00 AM ET|
5 things never to tell your insurer
These words and phrases may seem harmless, even well-meaning, but insurance companies see them as red flags, and they could hurt your chances of collecting on a claim.
When making an insurance claim, what you say can mean the difference between a fast payment check and a nightmarish process. Insurance companies are sensitive to certain words, and using them incorrectly could result in a claim delay or even denial.
Of course, lying to your insurance company or misrepresenting facts is fraud -- and your claim will surely be denied if the insurer finds out. But using the right words to accurately describe your problem is important.
"What you say initially can affect the outcome of your claim," says Allan Sabel of Sabel & Associates, an adjusting firm in Bridgeport, Conn.
Here are common "wrong words" that could slow down or scuttle an otherwise legitimate insurance claim. For insurers, these words often conjure up images of a claim that should be denied.
Homeowners often use the word "flood" inappropriately, and it can trigger an alarm with insurers -- since flood damage is not covered under a standard homeowners insurance policy. To an insurance company, "flood" means water from a nearby lake, stream, river or other body of water. This may seem like a minor distinction, but your insurer has a very narrow definition of flooding.
"Many people believe their house is flooded because it's full of water -- but it's not a flood by the insurance definition," Sabel says.
If your water damage did not come from an overflow of a nearby lake, stream, river or other body of water, don't even say the word "flood," says Sabel.
A true flood is covered only if you have a flood insurance policy.
If your basement is filled with water due to a burst pipe, it's not considered a flood -- even if it's knee-high -- and would be covered.
"You just have to be careful," Sabel says. "Know exactly what is in your policy, what's covered, what's not covered, and report your claim accurately."
It may turn out that what you thought was a flood is something totally different to your insurance company.
Avoid using terms like "experimental," "investigational" or "clinical trial" when you need a medical treatment that isn't a common practice. Just because it isn't common practice doesn't mean these terms apply to it.
Plus, health insurance companies typically refuse to cover treatment that falls into the "experimental" category. They generally cover only treatments that are medically necessary and have proved effective.
"Always say, 'It's medically necessary,' when referring to your treatment," says Mark O. Hiepler, a California attorney.
3. 'In my opinion . . . '
Don't offer your opinion. Stick to the facts. For example, following a car accident, people can rarely provide an accurate estimate of the rate, speed and flow of traffic, says Pete Giancola, owner of Pete Giancola's Insurance Agency in Deephaven, Minn.
For example, it's common for drivers to announce the speed at which they were traveling when the accident occurred. But, as Giancola points out, "unless you were staring at the speedometer, you don't know." Also, don't estimate distances -- like how far other vehicles or objects were in relation to your car before the impact. Your estimate could turn out to be false, Giancola says, "unless you jumped out of the car and measured it with a measuring tape."
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It's a shame if not a crime that a policy holder has to jump through hoops after paying a premium just to get the compensation that is owed to them. The insurance companies are glad to take a premium and then train their agents to find ways to increase your premium every year, yet when you file a claim, you need a lawyer to make sure you don't get the shaft.
The wall street protesters are aiming their wrath at the wrong industry. The insurance industry has a long history of avoiding paying what is owed on claims. At the very least, insurance companies do all they can to make it difficult to get the correct compensation for a claim.
Insurance companies will gladly take your money. But when you have to file a claim, the "your best buddy" act goes away real quick...
When a claim comes, the insurance company is thinking:
A. How can we get out of paying this claim.
B. If we can't get out of the claim, can we get then to settle for less...
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