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Hints (from the Consumer Federation of America) to help you get good claims payment ...

The Consumer Federation of America offers the following tips:

1. Keep Good Records

You should immediately start a notebook documenting contacts with your insurance company. List the date, time and a brief description of what was said. If you need to complain (see below) this information will be vital. If an adjuster says he or she will come and does not, write it down. If an adjuster is rude, write it down.

Get out your inventory of possessions or try, at once, to list your possessions. Don't forget that your family likely has pictures of rooms in your house (for example, from Christmas or other celebrations) that can be helpful in recreating a list of your possessions.

Obtain a repair estimate from a trusted local contractor to use as a guide in talking with the adjuster. Keep receipts of emergency repairs and any costs you incur in temporary housing. This may be reimbursable under the "Additional Living Expense" portion of the Homeowners' policy.

2. Deciding on Whether to File a Claim at a Time When Insurers are Being so Tough on Claims

You have paid your premium and are entitled to coverage. Insurers are using tougher standards for renewing insurance for homeowners these days, but this sort of claim should be excused. A hurricane such as Isabel is not the fault of the homeowner. Neither is the wet ground that may precede a hurricane and cause trees to topple when the hurricane hits, nor are any of the circumstances pertaining to claims from any hurricane.

As consumers we must stand together and agree to not do business with any insurance company that would not renew policies with consumers who make a hurricane related claim. We should fight any attempt to use of hurricane claims as an excuse not to renew homeowners' policies and complain to state regulators and, if required, the federal government, to assure that insurers do not take such actions.

3. What If the Claim is Denied or the Offer is Too Low?

If the claim is denied or you feel the offer is too low, demand that the company tell you what language they are relying on in your homeowners' policy to deny the claim or offer too little. This does several good things for you:

a. The company may be right and you may not know it. Once they point you to the appropriate language in the policy, you should be able to determine this. For example, suppose you have $400 in damage and the company points out you have agreed to a $500 deductible.

b. The company may have slipped new costs into the policy and not adequately informed you. Many companies have unilaterally imposed a separate "Hurricane Deductible" which is usually a percentage of the value of the home. CFA believes that many people are not aware of this deductible, which has been introduced since Hurricane Andrew in 1992. Moreover, the disclosure to consumers of this new deductible has often been inadequate. If you feel that you were misled in this regard it might be a good idea to talk to an attorney. The introduction of these percentage deductibles, up to 10 percent of the value of a home, will greatly shift the cost of hurricane damage from insurance companies to insurance consumers, compared to earlier storms. The practice of shifting the cost of previously insured events back to consumers is acceptable, as long as consumers are clearly given the option to select the level of coverage they want with fully informed consent.

c. Once the insurance company tells you the reasons for its action it cannot come up with new reasons later. You have locked them in.

d. If you read the policy and find that it would be reasonable to read it in a way that would pay you for the full amount of your claim, you will likely win if you go to court. Courts consistently rule that if an insurance policy is ambiguous the reasonable expectation of the insured will prevail since the consumer played no part in writing the language.

4. How / Where Do I Complain?

If you feel that the offer is too low or the denial is wrong, the best process for getting your complaint resolved is as follows:

a. First, complain higher up in the insurance company. Use the records you have kept since the claim process began. The more serious the insurance company sees that you are in documenting how you were treated, the more likely they will be to make a more reasonable offer.

b. Second, complain to your state insurance department. All states will at least get responses from your company to the complaint. A few states will actually twist the arm of the insurance company in clear cases of bad claims handling. It is important to dispassionately present your side of the story, using the notes you have been taking.

c. Third, see a lawyer. Now the notes you took are vital. If your treatment was particularly bad, the courts in many states will allow damages not just sufficient to cover your claim but for "bad faith" (since insurance companies take your money in exchange for their promise to make you whole when disaster strikes, they are to act in utmost good faith in performing that obligation).

5. What Isn't Covered in the Homeowners' Policy?

The homeowners' policy does not cover flood, earthquake, tree removal (except when the tree damages the house) or food spoilage from power failures.

6. Do I Use the Same Methods For a Flood Insurance Claim?

The federal government underwrites flood insurance, although an insurance company often services the claim. Follow the same procedures as above except when complaints, contact the Federal Insurance Administration at 888-flood29 or 800-427-5593. The flood insurance program tips on handling claims is at http://www.fema.gov/business/nfip/

Lilly, O'Toole & Brown, LLP
Lakeland Office: (863) 683-1111
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Sebring Office: (863) 471-0003
Lake Wales Office: (863) 676-1991
Haines City Office: (863) 422-1282
Wauchula Office: (863) 767-1111

Also providing legal assistance to clients from:
Wauchula, Lake Placid, Avon Park, Plant City, Brandon, and Valrico, Florida.

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