What do You expect in case of loss?
Introduction
(Excerpt from the book, "Policy Ensurance")You Thought You Bought
PEACE OF MIND
Imagine for a moment, the government didn't provide you your rights and tax forms but rather, came to your home, inspected your records, calculated and prepared your tax forms for you. Then they told you not to worry because they had your best interest at heart, and the cost of the "extra service" along with the cost of advertising, would be paid from higher taxes. Peace of mind?... not hardly. Well, get ready for reality. This is a very real scenario in the world of insurance and it could happen to any one of us. Most people believe insurance claims only happen to someone else. However, in one year in the United States, millions of policyholders pay more than seventy-nine billion dollars for property insurance, and insurance pays out more than forty-seven billion dollars in property claims.
No matter how fair insurance companies imagine themselves to be, they have a separate interest, self-interest. The more they pay, the less they keep. This can be even more evident and compounded when large sums of money are at stake and policyholders have surrendered their authority, looking to the insurance company for instruction and direction.
In simple terms, it is much the same as putting your property up for sale without finding out how much it is worth, then trusting the buyer with setting the price and explaining the deal. Probably this is not something you normally allow.
Get Ready For Reality
We are even more vulnerable at the time of a personal disaster. If you cannot look to yourself for know-how it is a good rule of thumb to look to a neutral source that has nothing to lose from the transaction.
Although insurance companies have been ensconced and are immune from federal anti-trust laws, there is now legislation for federal regulation of insurance company solvency, claim reserves and rates. However, policyholders also need guidance from a source other than insurance companies who obviously have their own interest to consider. For a start, perhaps insurance companies could pay for their own advertising from their own coffers, instead of from policyholder premiums. This would free those funds for more appropriate use: publication and dissemination of claim forms and instructions, policyholder rights and responsibilities, adjusting standards for claim value, adjusting principles, and general broadcast of the policyholder point of view. Because nearly everyone is a policyholder, company adjusters and agents would also become informed and better educated as well.
Now that the disparity is in focus, imagine that it is you who has suffered the fire, burglary, auto accident, or some other disaster such as earthquake, hurricane, tornado, flood, etc.
You report your loss . . .
Let's say you get less than you expect. Expect what?? It's a good idea
to know! Probably in no other area do people treat anything like they
do insurance. Most people seem content to spend large sums of money on insurance
and just hope for the best. The only insurance security you possess is in
knowing what will happen in the event of a loss. It is best for you to have
an understanding beforehand. Policy limits tell the most you can be paid.
The burden of proof is on you to demonstrate the amount of any loss you may
have and to establish how much your policy owes you.
The operating instructions of a policy seem so complicated that most people would rather leave it up to the insurance company to figure it out for them. This is all fine if the insurance company and you have the same interest and if they have the expertise to prove and establish claims on your behalf, but the truth is they don't. Naturally they are entitled to their opinion but you are also entitled to an informed opinion.
The company has the right to determine the amount of their liability, you have the right to determine the amount of your claim. Don't blur this fine line. When you suffer a loss, you are the one to claim how much your policy owes you. This means much more than just reporting your loss, it means actually knowing what to ask for, asking for it, adjusting your differences if possible, and knowing what to do if you reach an impasse. The wait and see approach gives up your authority and places you in a much weaker negotiating position. It is very difficult to re-establish authority once it has been relinquished.
You Should Be Protected
The policy is a contract between you and the insurance company. Because your interest is separate from the insurance company, you should be protected separately. The problem has been that even if you realized this fact, how would you go about calculating, preparing and adjusting your own claim? Where would you turn for wherewithal?
That's where this book comes in. It provides what you need and shows you how. While you carry the burden of proof, it puts you in charge of compiling how much you claim. This is strictly your business to mind--mind it well. The more you believe in your own real authority and a foundation of factual reference, the more prepared you are to protect your interest.
Remember, values are subjective in nature and vary considerably. This is one important reason to rely on your informed opinion, and claim values that you compile, as the basis for your claim.
It is not unusual for the insurance company to compile values that disagree. These differences are resolved through Claim Adjusting, or if necessary through the Appraisal procedure, a simple, inexpensive form of arbitration. However, many recent changes in wording of some policies have included striking-down the Appraisal process and instead now require us going to court.
This book has been simplified and condensed when possible.
