What really happens when an insurance claim is filed?

Post date: Feb 12, 2014 9:08:43 PM

Insurance is the idea that through mass participation there is an ability to spread risk among a large number of policyholders, most whom will never file a claim. It is fair to expect that this model should lead to a system that pays valid claims at fair market value in a timely manner. In reality this is not what usually takes place. Far too often policyholders are left facing considerable stress navigating an extremely challenging claims environment. A business model that originally began as a safe method of protecting one's self against risk has become anything but a "protection" to many policyholders. All too often I hear a common theme of unfairness in my daily interactions with policyholders. It normally goes something like this: "I have been with this insurance company for 30+ years and have never filed a claim, now when I need them they don't want to pay". It doesn't take a rocket scientist to figure out that 30 years worth of premiums add up to a rather large financial investment. Why would an insurer decide not to pay fair market value on a valid claim? The answer is quite simple and requires just a single word. Profit! The moment a long time policyholder files that first insurance claim marks the beginning of a significant change in that long term relationship. While you were once a greatly appreciated contributor to corporate profits you may now be viewed in an adversarial manner. In your mind you have been a great customer quietly paying ever increasing premiums without complaining and without filing a claim. For years you have fixed small items on your property every time they have been damaged without filing a claim for fear your rates would increase. This did not stop your insurer from raising your rates each year even though you had not filed a claim. What's different now you ask? Easy, you have joined the ranks of claim filing policyholders and the gloves have come off. Your insurer in many cases may choose to do battle with you rather than pay you what they rightfully owe you. This behavior is obvious with some very well known insurers (think TV ads with catchy slogans and you will know who I am talking about).

The moment your insurer brings in "outside experts" such as engineers to evaluate a simple claim it should be blatantly obvious that your best interests are of no concern. Engineers may serve a valid purpose on some large claims such as Earthquake claims where the structural integrity of a building must be determined. On a simple claim these "outside experts" are anything but outsiders. These "outside experts" are brought in to serve a single purpose on simple claims. They are there to assist the insurance company in paying as little as possible on your claim. This is done by the use of written reports that sound convincing to policyholders (and even in Court) but have little if anything to do with the terms of your insurance policy. Engineers are not insurance industry professionals and do not need to know anything about an insurance policy to write a damage report. Engineers reports will contain terms such as "functional damage" to explain why your roof for example is still "serviceable" after a windstorm. The term "functional damage" does not exist in your homeowners insurance policy. Homeowners insurance policies cover you against "sudden and accidental physical damage". "Functional damage" as used by engineers speaks to whether the damaged item has a shortened life expectancy, this is not what you are insured against. "Sudden & Accidental Physical Damage" as it appears in your homeowners policy means simply: the item has changed in appearance since the loss, this is what you are insured against. A classic example of this practice at work is in hail damage claims. Hail damage to an automobile is repaired without question because it meets the definition of "sudden and accidental physical damage". Clearly minor hail dings to the hood of an automobile do not qualify as "functional damage", yet the auto adjuster writes the check without blinking. The same hail storm strikes the roof of your home and the property adjuster brings along an engineer to review your claim and the result is somehow different. The roof has sustained no "functional damage" according to the engineer and your claim is denied. The engineers report may further state that "functional damage" is defined as: a breaking of the matting of your asphalt shingle which reduces the life expectancy of your roof. The dark spots on your roof where hail has knocked granules loose exposing the asphalt underlayment should be covered under "sudden & accidental physical damage" yet the insurance company treats it differently than the auto claim. The engineer likely does not know the policy terms and conditions or worse yet may not care. You see his income is dependent upon his ability to continue to get work from insurers. The engineer is most valuable to insurers when he helps them deny or minimize claims which in turn increases profits. If the engineer starts reading your insurance policy and figures out what it defines as damage they may not feel so good about working for the insurer anymore. In most cases you won't see the engineers report because you did not know to ask for it. You can't refute evidence that you don't know exists. Insurers in most cases won't share with you what you don't ask for. That is why hiring a Public Adjuster to handle your insurance claim can be such a good idea. As your advocate the Public Adjuster levels the playing field by knowing what your insurance policy covers and making sure your insurer doesn't wiggle out of paying what they owe. Many large insurers will tell you on their website(s) that you don't need a Public Adjuster because they will send out an insurance adjuster who will promptly pay you for covered losses. Unfortunately all too often these prompt payments when and if they do occur are a fraction of the fair market value of your damages. More often than not homeowners blindly take what they are given and go away quietly. This is exactly what the insurance companies count on. Due to the complicated nature of the insurance claims process and the strong profit motivation of insurers it is always a good idea to utilize the services of an expert. Call us today to schedule your no cost no obligation damage inspection. Even if your claim has been denied we may be able to reopen the claim and assist you in obtaining what you are rightfully owed. Initial consultations are always at no cost. Dottrio is Maryland's Public Adjuster, call us now at 301-971-4040 or email: admin@dottrio.com

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