Tips for Fast and Fair Claims Settlements

Be prepared.

An auto accident, burglary, fire, flood, or other natural disaster can happen to anyone.

And though an unforeseen loss or injury is not a pleasant thought, insurance protection helps to assure your peace of mind.

To assure that you receive prompt, fair payment for your loss, the insurance adjuster can work with you in a team effort to settle your claim.

This brochure will give you common sense guidelines on how to file a claim with your insurance company...and it will help you understand how the claim settlement process can work for you.

Before you experience a loss . . .
. . . know your policy!

It's very important that you know what your insurance policies cover. If you wait until after a loss, it may be too late. Never take for granted that you are covered.

Pay particular attention to the perils, property, and situations covered in your policies, as well as dollar limitations and exclusions. Today, insurance companies write policies that the average person can read and understand.

. . . know the actual cash value or replacement cost of your property.

Find out how your policy will reimburse you after a loss...how the insurance company will determine the value of your property. Policies usually pay for lost, damaged, or stolen property in one of two ways: actual cash value or replacement cost.

If you have replacement cost coverage, your insurance adjuster will pay you the actual cash value before an item is replaced. Once you replace the property, you'll be reimbursed for the rest.

But, if you have actual cash value coverage, your insurance adjuster will deduct the depreciation value of your property from the cost of a new replacement item. This coverage is usually less expensive than replacement cost coverage because your payment is determined by the value of a used item rather than the cost of a new item.

The subject of depreciation can cause misunderstanding in the settlement process. For example, the insurance adjuster must consider the market value of an automobile as well as the age and condition of the vehicle's various components. For instance, a tire with half its tread worn is worth about 50 percent of a new tire.

Claims settlement disputes sometimes occur when the cash value of depreciated items is determined. Be prepared to state your case with evidence if possible.

. . . prepare an inventory.

To be prepared, make a detailed inventory of your belongings: an itemized list of your property. Include photographs or videotapes with your list. Your inventory will help assure a fair, speedy settlement if you file a claim. Keep your list up-to-date and store it in a safe place away from your home, such as a bank safe deposit box, to assure that your documentation won't be lost in case of a fire, for example.

Keep receipts, appraisal certificates, and other statements supporting the value of possessions, too. This helps you remember the value of "big ticket" items and helps your adjuster determine current values promptly.

Car owners should keep documents relating to vehicle ownership, maintenance, and insurance as well. Some papers must be kept in the car, as required by law, so it's a good idea to make copies and keep them in a location away from the car, as well.

If you have a loss . . .

First things first

The checklists below provide important steps that will aid the insurance adjuster and speed

payment of your claim:

Homeowner's Checklist
 
 

•Do not alter the condition of your house before it is inspected by the adjuster; however, you should take steps necessary to protect your property from further damage by making emergency repairs. •Contact your insurance agent or company representative as soon as possible with all information relating to your claim. •Alert your insurance company or agent after an accident occurs on your property that requires a visitor to receive medical attention, even if you don't believe you're at fault. •Follow up your call with a written explanation of your claim. •Keep a record of all expenses you incur as a result of property damage, including expenses involved in temporary repairs. Also include any hotel and meal expenses, since these costs may be covered. •Take photos of the site after an accident or other disaster.
 
 

Remain Calm

Car Owner's Checklist:
 
 

•Get help for the injured. •Notify the police about the accident. •Exchange information (name, driver's license number, insurance) with other drivers involved in the accident. •Don't discuss fault or blame at the scene of the accident. •Get the names and numbers of any witnesses. •Contact your insurance agent or broker. •Take photos of the accident site. •Get estimates for repairs. •Keep records of any expenses you incur as a result of the accident.
 
 

Is your loss covered?

Most people know when they suffer a loss, but question whether or not to file a "formal" claim.

Some people hesitate because they are afraid their policies will be canceled or their premiums will increase.

The best thing to do is call your insurance agent or company representative and ask:

•Is this claim covered by my policy? •Will this claim likely exceed my deductible? •What will filing this claim do to my future insurability?
 
 

Your agent will guide you as you make your decision.

You have the right to make a claim against someone else if his or her carelessness results in your bodily injury or property damage. Such claims, however, have little or no impact on your insurance coverage.

Who will settle your claim?

Many insurance companies authorize your insurance agent or company representative to settle smaller claims.

In most cases, an insurance adjuster will contact you by telephone within 48 hours after you make a claim.

This person is a claims settlement professional who is either a staff adjuster or an independent adjuster.

Staff adjusters are employed by insurance companies and are paid a salary, just like employees in other businesses. Independent adjusters are owners or employees of adjusting companies hired by insurance companies to adjust claims. In either case, the adjuster represents the insurance company and one or the other does not make a difference in how your claim is handled.

Adjusters are responsible for making sure the claim receives prompt attention and fair settlement. They are also responsible for detecting fraud and taking appropriate action when fraud is suspected.

Despite what some people believe, adjusters are not rewarded for minimizing claim payments. Rather, they are judged on the number of claims they resolve, promptness and quality of their reports, their promptness in settling a claim, the number of complaints made against them, and their compliance with company rules.

Some small claims, such as a "fender bender," may be handled by either an adjuster or insurance agent over the telephone. In telephone claim settlements, you will need to answer some questions to establish that the damaged property belongs to you. You will also answer questions about the brand, model, age, and purchase price of the damaged property. You may need to provide receipts and photographs for larger items.

If your home or other property has been badly damaged by disaster, such as a serious fire, hurricane, or tornado, you may be approached by the public adjuster.

This person works for policyholders rather than on behalf of an insurance company.

  Public adjusters usually ask you to sign a contract entitling them to a percentage (usually 10 percent) of the total claim. This gives them an incentive to maximize your claim recovery and assume much of the responsibility for handling the claim through to settlement.

A public adjuster might show up before a company adjuster because some public adjusters learn of disasters by monitoring fire department radio channels. Insurance company adjusters receive their assignments only after they have been contacted by an agent or by the insurance company.

Another option is to hire an attorney.

Usually  attorneys are hired when people suffer serious injuries in auto accidents that they believe are caused by someone else's negligence.

If you hire an attorney, you are responsible for paying any legal expenses. In addition, most attorneys are usually paid 25 to 40 percent of the settlement.

What if someone sues you?

If someone sues you for bodily injury or property damage, your insurance company will provide an attorney to represent you as long as you have liability insurance. This coverage is nearly always included in automobile and homeowners policies.

In most cases, the insurance company appointed attorney representing you will be completely satisfactory unless your potential liability greatly exceeds your liability insurance limits. Then you may want to involve your own personal attorney. Your insurance company covers the costs of the insurance company attorney. These legal defense costs are not deducted from your liability limit, in most cases.

Settling your . . .
homeowner's claim

Your policy allows the insurance company to inspect your damaged property.

The adjuster will probably take photos and spend time with you discussing the cause of the damage, property values, your coverages, and how your claim will be handled.

You may choose a contractor of your choice to estimate repair costs. However, it is important that the contractor be experienced in repairing the type of damage involved. Usually the adjuster can provide you with a list of the names of experienced repair firms.

As soon as the estimates are available, the adjuster and contractor will discuss how repairs will be made, what materials will be used, and costs of repairs.

The adjuster will advise you of the total estimated repair costs including the deductible.

Extra costs necessary to comply with building codes are not covered by the insurance company in most states.

You'll be asked to submit an inventory of your damaged and destroyed items. The adjuster may suggest specialty firms that can clean, repair, or salvage damaged property.

If you have a mortgage payment, payment will be made to you and the mortgage company. If you've assigned your insurance claim to a contractor (not recommended), the contractor will also appear on the settlement check.

Settling your . . .
auto insurance claim

Adjusters dealing with auto accidents have several concerns. These include determining:

•Cause of the accident •Injuries to all persons covered by the policy •Damage to the car
 
 

The adjuster is also concerned about possible liability claims. An example of liability would be a claim by the other driver in a two-car accident that your negligence caused injuries and auto damage.

The adjuster will thoroughly investigate the accident, taking statements from parties involved, visiting the scene of the accident, taking photographs, making diagrams, searching for witnesses, and receiving police reports.

Many people mistakenly believe that they are not liable if police reports indicate they did not cause an accident. However, police reports are not legally conclusive. A driver can still be found partially at fault for causing an accident. This fact may influence the settlement, or in the case of a lawsuit, could affect the size of the award.

The adjuster will seek to settle the claim with you and others covered by the policy. The adjuster may also ask victims to authorize doctors and hospitals to release medical reports in order to monitor treatment and make sure that injuries were caused by the auto accident. The adjuster may request other documentation, such as employment records in the case of lost earnings.

If the vehicle can be repaired and driven safely after an accident, the adjuster probably will suggest that you get one or two estimates from auto body repair shops of your choice and/or from a drive-in claim service of the insurer's choice.

State law may require that the adjuster provide names of one or more repair facilities in your geographic area that can make repairs for the amount of the appraisal. In other states, the law forbids adjusters to recommend repair shops.

It's the adjuster's job to make sure repair estimates are fair and reasonable and reflect repairs that really are needed.

In addition, the adjuster may look to see if any "depreciable" items are being replaced in the repair process.

For example, car parts, such as the battery or tires, are replaced periodically as part of routine care. So if a new battery replaces a damaged two-and-a-half year old battery, you may have to pay part of the cost.

Settlement agreement

Reaching an agreement with your insurance adjuster about your settlement is usually very clear cut and easy. But sometimes there may be instances where you don't agree. If you and your adjuster have difficulty reaching agreement on a settlement, it is probably because either one or both of you need more information.

Insurance companies want to settle claims fairly, promptly, and equitably. The adjuster is responsible for investigating claims as quickly as possible and working with policyholders to resolve any disputes. Some of this resolution may take time. You need to work with the adjuster to provide documentation and to reach agreement on matters that are in question.

If you and your adjuster cannot reach an agreement . . .  most policy provides you the right of an appraisal.

This means you may hire your own Appraiser, having him/her to negotiate your claim.  See below for more information

Receiving your payment

Once the repair estimates are adjusted, you will receive a check for the covered damage, minus depreciation value and the deductible amount of your policy. If you have a car loan, the lending institution will also be named on the check.

If another driver is liable for the damages to your car, you may be reimbursed for the amount of the deductible from the other driver's insurance.

How can you ensure satisfying results?

Call or write to the adjuster working on your case as new developments arise.

Communication and honesty are the key components that you and your adjuster will need to team up effectively.

If you aren't satisfied, call the adjuster's supervisor or branch manager and discuss the situation. Your insurance agent or broker can also intervene. If it appears the claim can't be resolved to your satisfaction, review the insurance policy to see if the dispute can be settled through arbitration or mediation techniques. Another option is to contact consumer service representatives in your state's Department of Insurance. You can also file a complaint, which will be investigated and ruled on by the department at no cost.

As a prepared policyholder who understands the claims process, you can work together with your insurance adjuster to make sure your settlement runs smoothly.

If all else fails . . .  Your policy provides you the right of Appraisal

This means, if you are not satisfied, you may hire your own appraiser and have him/her negotiate your claim with your carrier.  Click on the SEARCH button below for an adjuster/appraiser in your area.

Remember . . . think of yourself and your insurance adjuster as a team . . . working together.

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