If flood or fire hits your your home, or if your car is hit in an accident, shock and dismay are the inevitable reactions. The only comfort: Your insurance policy should cover the costs of damages.
Outrage is added to injury if consumers find their insurer refuses to pay, or won’t pay as much as they expected on their homeowner’s or auto insurance claim. That outrage is bound to derail your cause, however, say experts. Keep a cool head, plenty of written documentation, and, if necessary, enlist help to plead your case.
Luckily, notes Steve Goldstein, vice president of the Insurance Information Institute, a New York-based industry trade group, most people making claims find satisfaction from their insurance company. He points out that only 3 percent of the 60,000 calls to the consumer help line his organization maintains concern claim complaints.
Many disputes would be avoided, contends Bob Hunter, director of insurance for the Consumer Federation of America, if people took more time to select an insurance company and policy.
If, though, you do experience the unlucky double whammy of suffering both damage and insurance hassles, what follows is a guide to staking your claim for what you deserve. No matter how adeptly you or your representative pleads your case, however, you can’t expect to prevail unless your policy supports your position. “You should get what you are entitled to, not more and not less,” Goldstein says.
– Keep an accurate record. Save copies of every letter, receipt or other paperwork involved in your claim action, counsels Hunter. Every time you speak on the phone to someone at the insurance company or to a party related to the event, write down when the call occurred, whom you spoke with and what was said.
“The potential of getting your problem resolved is directly related to the quality of your records,” says Hunter. “It’s also crucial to get the company to give you the reason in writing why they are denying your claim or refusing to pay more. Once the company gives you a firm reason for their denial, they can’t change that reason or amend it.”
– Take it to the top. If you run into a dead end with a company representative, skirt around him and head for the complaint resolution department, or take the issue to a supervisor or the supervisor’s supervisor, says Hunter. Most insurance firms will have a complaint division, he notes, and if you dispassionately plead your case and display proper documentation, you may prevail–provided you’re not asking for compensation for damages not specifically covered in your policy.
– Call in the state regulators. Luckily for consumers, says Goldstein, insurance companies are regulated by the state where the customer lives. Nearly all states, Illinois included, have a complaint division in the Department of Insurance that can force a company to respond to a consumer’s problem within a certain time frame.
If you haven’t had luck taking your case up the ladder at your insurer, the next logical step is the state, says Goldstein. When consumers call 312-814-2427 or file on-line at www.state.il.us/ins, they receive immediate counseling on how they’ve handled the situation and if the company is acting properly, says Dale Emerson, assistant deputy director of the Illinois Department of Insurance.
Callers can request a complaint form, which, when completed, the department will forward on to the insurance company, giving it three weeks to reply. If the company holds its ground, the insurance department can’t force its hand over claim disputes, says Emerson. But he estimates that about 50 percent of the time, consumers prevail through the process. Even if they don’t, Emerson adds, they walk away with a written opinion from the state which may be useful if they seek litigation.
The Illinois Department of Insurance also can provide information on the number of complaints against a company; call 312-814-2420. Complaint ratios for companies operating here are also available at the above on-line address. Or, you can check out service ratings in publications such as Consumer Reports, says Hunter.
– Can a public adjuster help? Insurance companies use “adjusters” to determine whether you have a legitimate claim, and if so, how much to pay out. Consumers have the opportunity to hire their own adjuster from the ranks of “public adjusters” who are licensed by the state and work exclusively for business owners or individuals who have a property claim.
Actually, homeowners frequently hire a public adjuster not when they have a disagreement over a claim but when a fire causes significant damage to their home. The public adjuster can help the befuddled homeowner in every step of the claim process, from reconstructing the value of lost items to filing lengthy, detailed claim forms.
“Most people don’t know coverages or how to prepare a claim,” says John Fisch of Premier Building Contractors Inc., a Morton Grove public adjusting firm. “They will hire a public adjuster to look out for their interest and to make sure they get everything that they are entitled to.”
Although fires are the most common reason public adjusters are called in, the adjusters also work on wind, water and other homeowner policy claims–but not on auto claims, says Larry Warner, president of Lash Warner and Associates, a Chicago public adjusting firm.
Don’t call a public adjuster for your garden variety flooded basement, however. For one thing, even if you have flood coverage, it won’t cover soaked carpeting or other valuables; only damage to structural elements, notes Warner. For another, public adjusters are typically paid a percentage (10 percent is common) of the amount you recover from the insurer, says Emerson. Very small claims simply aren’t worth the adjuster’s time, notes Emerson, though Warner says he has worked on claims amounting to just $500.
Public adjusters are licensed by the state of Illinois and must follow certain rules. For instance, if a homeowner signs a contract with an adjuster within five days of the event, he can choose to void the contract within 10 days. You can find some adjusters listed in the Yellow Pages under “adjusters, public.” Many adjusters are also affiliated with building contracting companies that specialize in fire restoration.
– Try small claims court or mediation. If your claim is less than $1,500, and you haven’t had any satisfaction from making your complaints to the company and the state, it may be time to try small claims court, or as it is formally known Pro Se Court. It costs a small sum to file a case, and you must act as your own lawyer. To find out more about the process, you can visit the Pro Se desk at the Daley Center.
– Hire an attorney. Disputes over homeowner’s and auto claims don’t usually require an attorney’s services unless the claims involve significant sums or involve bodily injuries, notes Mark DeBofsky of the Chicago law firm of DeBofsky & DeBofsky. What’s a significant amount? Different lawyers have different thresholds, notes DeBofsky, who says he limits his own cases to those worth more than $15,000.
An attorney who frequently takes on insurance firms should be able to tell you how strong your case looks after an initial review, DeBofsky says. The case may settle anytime or take several years to wind its way through litigation. If a lawyer agrees to take the case, he often agrees to a contingency fee–a percentage of the settlement–rather than charging a consumer by the hour for his services, says DeBofsky.
