Ins. Co. - Vent (sorry)

[ash&abby'smom]

Why does it seem ins. companies have no problem taking your money, but when you have a claim they are SLOW and unwilling to pay whats due?

Dh's shop had a few trees fall on it during hurrican Katrina. As soon as the storm passed and the rain was over, dh & my db went out there to assess the damage. The next day the got on top of the shop and removed the trees and covered the damaged part and taped it so that it wouldn't receive anymore damage. Well when a hard blowing rain comes it still leaks. Anyway, we had an adjuster come out and apparently he never filed our paperwork. So another adjuster comes out. He says that he is going to reduce our deductible for removing the trees. We thought great. Today I receive a letter from claims stating that we did not carry the proper value of insurance on the building. Well in 2003 we had an appraisal done and carried an extra 25,000 on it. Well they have a higher value. They say we should have had $60,000 more than what the appraisal was even for. Where do they get this number? Even if the value of the building went up in two years $60,000 seems high. They are assessing us a penalty of 728.00 plus the deductible, Leaving us a big $2800.00. We haven't been able to get our builder out here to give us a quote to even see if this will cover it. It's just aggravating because I feel like they have been giving us the runaround and now this. Everytime we seem to be getting caught up, something else happens.

Just needed to vent to someone, so thanks for listening.

 

[bicker]

It sound like since you were only covered for a portion of the value of the property, their pay-out will be only that portion of the damage.

 

[we3disneygo]

it seems like it's always something.......

 

[bicker]

Insurance is a strange animal -- very true. The folks who sell it need to make us think that we're getting "more for our money," in some abstract way, while in reality, we have to be getting less or they wouldn't make any profit. So they have these voluminous sets of terms and conditions that all are represented by bits and pieces of mathematical models -- in many cases, a few words among the pages of specifics translate into millions of dollars.

I've gotten to the point where I'll only buy insurance for potential losses that I could not afford (or stomach) paying to recover from, from my personal savings. That way, the "profit" the insurance companies would make goes back into my bank account (assuming I don't have a loss).

However, that leaves me paying for only catastrophic insurance, meaning insurance that I hope I'll never use. That is also a very strange thing (paying for something that I hope never to get any return on).

 

[SC Minnie]

However, that leaves me paying for only catastrophic insurance, meaning insurance that I hope I'll never use. That is also a very strange thing (paying for something that I hope never to get any return on).

We all do. I had a professor in college that said insurance is legalized gambling. They are betting you won't need it and you are betting you will.

It always ticked me off that as soon as you need the insurance they will raise your rate because you filed a claim especially car insurance. Someone backed into my car in a parking lot and left. The car had a huge dent in the from quarter panel. I had been paying insurance for many, many years and as soon as I file a claim to get this fixed (wasn't even my fault) they raise my rates (this was the only claim I had ever had to file).

 

[becka]

What you are charged was a coinsurance penalty. The insurance contract states that you are required to carry a certain % of coverage based on how much it would cost to rebuild your home. Building costs in the last few years have skyrocketed leaving many underinsured. Many insurance companies have a "inflation guard" that can be added to your policy so the insurance company will raise your coverage by a certain % each year to help make sure you have the proper level of coverage.

The reason coninsurance came into play in a big way the past few years is because people would intentionally carry much lower levels of insurance on their homes/businesses thinking they would never need any more and then insurance companies were left to pick up the tab on a loss they never received full rated premiums for. Most losses are not total losses and insureds gained from that.

I will agree that insurance is a strange business but you can't really say you are getting nothing for your premium. Insurance by definition is the transfer of risk and that is exactly what you are purchasing when you buy insurance. You transfer your risk of a big financial loss to the insurance company in exchange for the payment of premium.

 

[ahutton]

Why does it seem ins. companies have no problem taking your money, but when you have a claim they are SLOW and unwilling to pay whats due?

Dh's shop had a few trees fall on it during hurrican Katrina. As soon as the storm passed and the rain was over, dh & my db went out there to assess the damage. The next day the got on top of the shop and removed the trees and covered the damaged part and taped it so that it wouldn't receive anymore damage. Well when a hard blowing rain comes it still leaks. Anyway, we had an adjuster come out and apparently he never filed our paperwork. So another adjuster comes out. He says that he is going to reduce our deductible for removing the trees. We thought great. Today I receive a letter from claims stating that we did not carry the proper value of insurance on the building. Well in 2003 we had an appraisal done and carried an extra 25,000 on it. Well they have a higher value. They say we should have had $60,000 more than what the appraisal was even for. Where do they get this number? Even if the value of the building went up in two years $60,000 seems high. They are assessing us a penalty of 728.00 plus the deductible, Leaving us a big $2800.00. We haven't been able to get our builder out here to give us a quote to even see if this will cover it. It's just aggravating because I feel like they have been giving us the runaround and now this. Everytime we seem to be getting caught up, something else happens.

Just needed to vent to someone, so thanks for listening.

I don't know if I can help, but I'll try.

You can dispute the coinsurance penalty they are charging you. I would ask for a copy of the documentation used to determine you were underinsured. Review that and see if it is in line, if it is not you can dispute it. You'll have their evidence, so if you can contradict it you have a great arguement.

If there are repairs that go beyond the estimate you've received (once they start working they find additional damage) your repair person should call the number on the estimate to discuss and get approved for any additional damages.

Also - in many cases (on many insurance policies) the initial payment you receive is for the actual cash value of damaged property, not the replacement cost (assuming you carry that on your policy). Once you actually replace the item(s) you can submit the additional expense to your carrier for additional payment. That is done because LOTS of people will never replace things that are gone, and most policy contracts only pay for the replacement cost if the item is actually replaced.

I know this is a maze, and claims are always frustrating. Hope this helps, and if you have any other questions I'll try to answer them. And while there are a lot of agents out there that will sell you anything for a profit, not all of us are like that. I'm the worst of both worlds, I'm a licensed adjuster AND an agent! *ducks and runs for cover*

 

[Tigger_Magic]

What you are charged was a coinsurance penalty. The insurance contract states that you are required to carry a certain % of coverage based on how much it would cost to rebuild your home. Building costs in the last few years have skyrocketed leaving many underinsured. Many insurance companies have a "inflation guard" that can be added to your policy so the insurance company will raise your coverage by a certain % each year to help make sure you have the proper level of coverage.

The reason coninsurance came into play in a big way the past few years is because people would intentionally carry much lower levels of insurance on their homes/businesses thinking they would never need any more and then insurance companies were left to pick up the tab on a loss they never received full rated premiums for. Most losses are not total losses and insureds gained from that.

I will agree that insurance is a strange business but you can't really say you are getting nothing for your premium. Insurance by definition is the transfer of risk and that is exactly what you are purchasing when you buy insurance. You transfer your risk of a big financial loss to the insurance company in exchange for the payment of premium.

Very good explanation! And a good reminder to everyone to check their homeowner's insurance for 2006.

 

[ahutton]

Becka - I didn't know we were both insurance geeks!

 

[becka]

Becka - I didn't know we were both insurance geeks!

Is it that obvious?