Step By Step: Filing A Claim
If you own a home or other insured property in a region affected by a natural disaster like a hurricane, chances are that you are going to consider filing an insurance claim.
For most people, making a claim and negotiating the insurance claims settlement process is something they have never had to do and the process can be intimidating.
To make the matter more difficult, many people see the insurance companies, with their vast financial and trade association resources, as a formidable adversary, and many people lack the experience or capability to successfully negotiate a fair settlement to their claim.
Before you begin the claims process, it is critical that you know how to go about it. Being well informed and prepared will improve your chances of receiving a fair insurance claim settlement and can mean the difference between a frustrating and confusing process and a prompt and fair settlement.
Most people filing insurance claims are not sure of their rights provided to them as an insured under their policies. They are also worried about trusting their insurance company – and they should be. The interests of the insurance company and the insured are not all the same when it comes to settling a claim.
First, obtain a complete copy of your insurance policy, including all Declarations, Endorsements and Riders. The Declarations page will include each category of coverage (such as dwelling, contents, loss of use, etc.) and the specific dollar limits of each category. Your policy will also include a description of all risks and losses covered under the policy. Your insurance company is an expert on your policy; you need to be one as well.
When you file a claim, you will first report the loss to the claims department of your insurance company; they will create a claim number for your loss and assign the loss to an adjuster who will report to a claims supervisor.
From the start of this very first phone call and throughout the entire process, you should document all contact you have with your insurance company and their representatives. Write down the time and date of every call, what was said, by whom and what are the next steps.
Your insurance company may want to handle your claim with little or no documentation, but you must make sure to document everything. For this reason, it is a very good idea to insist on obtaining e-mail addresses and to send a summary e-mail message of every phone call with your insurance company back to your adjuster and claim supervisor.
Also, document the names, titles, phone numbers and e-mail addresses of all the people in the organization's structure who are accountable for your claim. This will include, from the bottom up:
- Adjuster
- Claims Supervisor
- Unit Manager
- Regional Claims Manager
- Home Office Claims
Also, it's good to know that claims managers and unit managers would much rather resolve a problem at their level than have to explain to their higher-ups why your complaint had to be escalated for resolution.
After the adjuster inspects your loss, he or she will prepare a written assessment of what needs to be repaired or replaced and estimate of the costs for each item.
It's important to know that adjusters typically use a replacement cost computer program to prepare their reports, and the costs for materials and contractors will be based on regional or national averages.The adjuster will quickly provide their report to the claims supervisor, who will then move to issue you a check based on the coverage in your policy and the adjuster's report. If you have a mortgage, the mortgage company or bank will also be named on the check. You will be required to endorse the check and send it to the mortgage company. The mortgage company will hold the funds in a loss draft account to disburse the funds to you in installments as required to pay your contractors/builders.
When you receive the first check from the insurance company, do not deposit it or send it to your mortgage company until you have carefully reviewed the adjuster's report and agree with all items and costs. Look for things such as:
- missing items
- partial or incomplete measurements
- low-balled contractors costs
At times, you may feel that your requests for covered losses are not being responded to fairly, or at all. It is at these times that your written documentation will pay off.
Make all complaints in writing. Be complete but concise. Be professional and polite. Be specific in your written complaint as to the problem; that is, make a specific request for resolution, set a response time frame and make sure to copy the complaint to the person one level up.
Make sure to ask the insurer if they require any additional information from you and when they need it.
Finally, include in your complaint that if a reasonable resolution cannot be offered, that you are prepared to file your complaint with the state's insurance regulatory agency. To find your state insurance regulator, log on the Web site for the National Association of Insurance Commissioners at www.naic.org.
If you have a large insurance claim or there is a large difference between what the adjuster says the insurance company will pay and what you believe should be paid under your policy, you may want to consider using a Public Adjuster.
A Public Adjuster, or PA, is a person who is licensed to represent the insured's claims for the purposes of seeking a full and timely settlement of the claim. In a claim dispute, since the burden of proof is on the insured, a PA will document the loss, gather supporting replacement costs information and negotiate with the insurance company to maximize your settlement. You can find out more about PAs by logging on to the Web site for the National Association for Public Insurance Adjusters at www.napia.com.
If your insurer is digging in its heels and you are getting nowhere, you may have to resort to hiring an attorney. Don't seek the counsel of a family lawyer, but instead seek an attorney who specializes in the practice of law in the areas of "Plaintiffs Insurance Coverage" or "Bad Faith Litigation."
The insurance company will use a very skilled insurance defense attorney to represent them, and your attorney should be a worthy opponent. Check with your County Bar Association and ask for a referral for attorneys who specialize in this area of the law.
The down side with hiring a PA or an attorney is that you will pay additional costs. PAs and plaintiffs insurance attorneys typically charge either a fee as a percentage of your settlement proceeds (10 to 33 percent) or hourly rates that can range from $75 to $350 per hour.
As should be done before hiring any professional, ask for and check client references of any PA or attorney before you agree to retain their services.
The following excerpt from the United Policy Holders Web site, at 981310 www.unitedpolicyholders.org, sums it up well: "If you can communicate effectively in writing and in person with your insurance company with confidence, polite aggression, and insistence on your rights, you may not need an attorney (or a PA).. If you are feeling frustrated, angry or anxious or are unsure about your rights, a qualified attorney (or PA) can help."
Written by Ray Martin