7 Things Your Insurance Company or Agent Won’t Tell You
February 5, 2009
Here’s a list of things your insurance company and agent may fail to explain to you unless you probe them for information.
1) When they say everything is covered, everything isn’t covered. What they mean is everything is covered unless specifically excluded or limited in the policy.
2) If you have any type of large claim loss or a frequency of claims in a short period of time, they may try and drop your policy.
3) A lot of people think a claim only counts aginst your history if they have to pay you for it. However, filing a claim that ends with a value less than your deductible still gets counted as a claim against your claim history. Remember that when considering #2.
4) Many claims adjusters look for ways to reduce the amount of the overall value of the claim.
5) Many insurance agents and their customer service representatives do not fully understand policy coverages. I used to get many phone calls from agents asking me questions about policy coverage, because their client was in their office asking a question they couldn’t answer.
6) You can file a claim directly with the insurance company instead of filing it through your agent.
7) They will cancel your policy for things like trampolines, certain dog breeds, pool slides, and unrepaired damage on your home. When you buy a new policy the insurance company’s inspector will come out and take a look around your house. They won’t come inside, but they will take take exterior photos. They are looking for things like vicious dogs, pool slides, trampolines, and tree branches touching or hanging over your roof line.
The Dark Side of Insurance
I am not trying to say that every claims adjuster and agent are out to get their customers. There are definitely many agents and adjusters that truly help their customers and look out for their best interest, but I was once in the industry, and I know how some of the companies work.
The insurance companies I worked for put a lot of pressure on you to save them money, and their company policies always favored the best interest of the company rather than the customer. I was put in numerous positions where the coverage in the policy was a gray area and it could be interpreted either way. But, the insurance company forced me to deny coverage.
Many customers did not fight back. They backed down and paid for the damages out of their pockets. A lot of the time, insurance companies get it right, but I think their lack of commitment to putting their customer’s interests ahead of their own in the cases where they don’t is what gets them bad publicity in the media.
Be an informed consumer; do research and ask questions to your agent and adjuster. Do not let them call the shots. You are the one paying for their salary and commission.
If you have any questions about your policy or a current claim open, feel free to contact Erik or check out some of the other questions in the recent insurance series like insurance tips for filing an insurance claim, understanding insurance policies, lowering insurance rates, all about insurance policy riders.
Great Article.
I have an extra one – they will also routinely attempt to get you to insure for much higher than you need. For instance, I know someone who just bought a new house and they tried to insure them for cedar closets, sinkhole insurance, all these ridiculous things that weren’t even relevant (they claimed there was a misunderstanding based on what was on the mls paperwork). Anyway, as a company, if you can insure for things you’ll never have to pay claims for; or even just increase your premiums for a given account at appropriate actuarial assumptions, you’re inflating your profit margin that much more.
Advice – make sure you inspect every piece of paperwork outlining what your premium and coverage assumptions are. Chances are, you’re paying for more than you need at this moment!
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Also look out for the trick we fell for — notice for an exterior inspection, the inspector arrives and tells you it was supposed to be an interior inspection as well. Of course, he’s a nice guy, working for you . . . not. The report made our house sound like a place that had been abandoned for months and should be condemned. Needless to say, the company found reason to drop us.
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Thanks for your contribution to Take Charge of Your Health Care Carnival. You make an important point that Insurance companies are primarily looking out for their interests and not the consumers.
My husband and I are trying to drop our flood insurance as we recently found out that we are no longer in a flood zone, zone x. Anyway, Our insurance company will not let us drop them until we show proof from our lender that one, we are not required to have it and two, that our insurance company does not require us to have it. While we wait for this, we are still paying for it. I don’t understand, can’t they look it up and see for themselves that we are not required to have it? Is this just another way to keep our money? We already sent them one letter from our insurance company stating that we are not required to have it and that wasn’t good enough.