Ideally, every claim would be smooth and trouble free. Unfortunately though, that is not always the case as companies and policyholders can both have reasonable views that don't line up. How does this happen? Often it is a result of a miscommunication or a missing piece of information that causes a conflict which is then quickly resolved. Sometimes it is just a difference between the numbers approach that a company takes versus a more emotional approach that the person suffering the loss uses. More of a style than substance issue. Other times though, there may be a distinct difference in opinion that can be difficult to resolve. In more rare occasions, it may be a matter of the company being wrong and then we work with you to correct their position.

When a loss occurs, a company is going to look at the claim and put a dollar value on the cost of repairing or rebuilding your property and proceed accordingly. This may feel a little cold, but their goal is to replace your lost property with a safe, comparable replacement and to do so as quickly as possible. Since it is difficult to provide an exact replacement for most things, the insurance company will try for the most comparable. For example, if your 5 year old car is damaged, they look to repair it with parts comparable to the age of the car. If it needs to be replaced, they look at the dollar value of cars of similar age, mileage and condition. If it is your home that is damaged, they look to rebuild or repair it to a like new condition that is of comparable size, style and features. With a home policy, the materials used will be brand new and of like kind and quality. In fact, a home loss generally allows the homeowner to end up with a home that is nicer than what they had due to the updated materials used in the repair or rebuild.

One of the bigger issues when a claim occurs is the loss of value that may occur to the damaged property. This is mostly related to homes and vehicles and is dependent on the type and extent of damage incurred. This is a real concern for policyholders because the loss can be substantial. Unfortunately, except for some liability type claims, loss of value is not covered under your insurance contract. As such, the company cannot pay for any loss in value that occurs. This is not an attempt by the company to avoid a payment, but a recognition that the policy does not provide this type of coverage. While we hope that the insurance industry will try to address this, one of the big concerns is how do you price for it and how do you calculate the damages? The amount of loss decreases over time and even if you sell the property once it is fixed, the loss in value, if any, is only going to be an estimate at best.

So the question is, with all of the above, how can we make a claim go as smooth as possible? We have listed several steps that you can take to keep a claim on track.

1. Go into a claim with the mindset that the company is working for you, but be ready to support your position. A good company adjuster understands the need to pay what the policy allows and will listen to your concerns.

2. It is important to understand that the company cannot do more than what the contract allows, but they also can't do less.

3. Focus on a fair settlement, not trying to get more than what was lost. The company will reimburse you for what you lost, not for upgrading or a loss in value.

4. When an event occurs to many people at the same time, patience is required as the adjusters will be in great demand. Be sure to make the necessary repairs and cleanup  while waiting for the adjuster. You do not need to wait for an adjuster to take the steps necessary to prevent further damage, or to begin the cleanup. 
 
5. If you do not agree with the adjuster, it is well within your right to get a second opinion. In fact, most companies welcome this additional opinion to assist in concluding your claim. We strongly encourage you to consult with a QUALIFIED third party if you feel the company is wrong. When there is a disagreement, it is important to have your position supported with quality information.
 
6. Contact your agent when a question or problem arises. We are here to work with you and facilitate the claims process. In many cases, we can resolve issues that create problem claims. You are not alone when a claim occurs.

When you have a good company- and ours are-  they will listen to your viewpoint and supporting materials and then will either explain and back up their position, or they will make any necessary corrections if warranted by the information you provide. We see it happen all the time. What doesn't work as well is to demand a different action, but not be able to provide justification as to why it needs to done that way. Unfortunately, while emotions and opinion are listened to and considered, they do not have the same authority as facts and supported positions. Companies have a responsibility to pay your claim fairly, promptly and to ensure the result does not put you in an unsafe circumstance. By the same token, it is necessary for policyholders to remember that they also have the responsibility to be fair in expectations, be cooperative, and to realize that coverage is dictated by the policy.  This is where your agent comes into play as we can help you navigate the claim process and ensure your voice is heard.

Claims are a part of life; they happen every day and range from life changing to an inconvenient nuisance. They all share a common element though; they all involve recovering from a loss and putting you in a condition comparable to where you were at before the loss occurred. While Insurance policies are designed to put you in the condition you were at the minute before the loss occurred, there can be disagreement as to exactly what that condition was and if it is possible to do so. Though conflicts are fairly rare, they do occur as mistakes and incorrect decisions are sometimes made. A good insurance company will work through these times to ultimately reach a fair conclusion. The purpose of this article is not to defend the insurance company, but to simply provide some background as to the reasoning behind why a  decison may be made. In the following paragraphs I will provide some examples of the more common claims that create questions.

Under the auto policy, questions tend to pop up most often under two circumstances. First, a car is damaged and the company is asking that reconditioned vs. OEM parts be used. The idea is that a five year old car has five year body panels and replacing those parts with brand new OEM parts is improving the car, while using reconditioned parts puts the car in comparable condition to how it was prior to the loss. Using reconditioned parts reduces the cost of the claim which helps keep premiums lower. Unlike 10 or 20 years ago when this was first introduced, from a safety and appearance standpoint, there should be no noticeable difference between the results of the two repair methods. The second scenario is payment for a totaled car. This can be a tough claim as we can all agree that when your car is totaled, it is hard to find a comparable example to buy. Instead, you will likely upgrade the car to meet your current needs. Unfortunately, this upgrade will not be paid by your insurance company as the insurance policy is only concerned with valuing the car that was lost, not the one that will replace it. The difference between the customer action and the policy coverage can be a tough point in a claim.

The home policy is generally a replacement cost policy, so repairs and replacements are done more on a basis of using current costs and materials to repair or replace items. The depreciation that is part of most policies is removed when a repair or replacement takes place. While this often reduces conflict on valuing a claim, there are still issues that occur when a customer wants replacement and the company wants to repair. Why does the repair vs. replace issue happen? It happens because the home policy requires the insurance company to choose the lower cost between repairing and replacing. If it is less expensive to repair, that is what the policy dictates. When there is disagreement with being able to repair an item, you will see the company rely on a third party to make the determination. You will be able to provide input, and very often choose, this third party inspector. This is especially true of large home losses where we will see a restoration company and a structural engineer brought in to make sure the decision made is the correct one. We also may see this anytime there is a question on the extent  and cause of damage . Your insurance company should be very open with the information they use to settle your claim. They should also let you bring a representative in to review the estimate and view the inspection process when there is significant disagreement. In most cases, we find that it is not the insurance company trying to be difficult as much as it is the company following the conditions of the contract.

When questions arise during the claims process, your agent is there to help you navigate through the process and ensure that your voice is being heard. In my next post, I am going to talk about how to make the claims process go smoothly.