Sushi Money

Have you ever filed an insurance claim on your home, auto or for personal property loss? Do you know what to do if you need to file a claim? Most of us don’t think about it until something happens. But the time to understand what is involved with an accident or casualty insurance claim is not when you’re in the middle of it! I think an annual review of some basic procedures is a good idea. It’s also helpful to go over how you would handle an accident or claim procedure with your spouse or partner. A common response to the question “What would you do after being involved in a fender bender?” is the answer: “I would call you!” Okay, that’s fine, but we can’t count on someone else being there to know what to do… it’s a better idea to understand what is really involved.

Keep in mind that many locations and insurance companies differ with their procedures. For example, in many cities- if you have an auto accident it’s important that the police come as soon as possible to document the circumstances and create a police report. Yet in some communities, the police may only come to “fender benders” if requested by the drivers of one or both vehicles (they normally will always come to injury accidents). Do you know how it works in your community? If not, contact the police administrative office and ask about their procedures. Why is it a good idea to have a police report? Because it provides an official documentation of the circumstances soon after an accident has happened, and possibly includes witnesses. Without the police report the insurance company may only have their own investigators to make conclusions. In my view, it’s nice to have some additional information from a legitimate source. Now I’m sure someone can come up with some reasons not to have the police there, namely receiving a citation, fine and/or other documentation that isn’t desired. Each situation is unique of course, and you’ll have to make your own decision.

With that in mind, here are ten steps to be prepared with in case you need to file an insurance claim:

1. Before filing a claim, review insurance documents (if you can get to them) to ensure you understand your coverage and limitations to coverage.
   
2. Notify the insurance company as soon as possible for accidents and damage that you believe indicates you will file a claim. However, if you are going to handle the issue yourself, then it may not be necessary or desirable to notify your insurance company as discussed above. If you have a personal insurance agent, they can help you clarify questions up front when considering filing a claim.
3. If filing a claim, make only temporary repairs or changes to the damaged property if possible. Don’t allow repair personnel to make changes or repairs unless authorized in writing by your insurance company. Otherwise, the insurance company may deny that portion of the claim if not approved prior.
4. Consider contacting your attorney, and document conversations you may have with insurance personnel and any contractors or other people associated with your claim. You may be required to give a statement under oath… do you need legal advice before hand?
5. Meet personally with any insurance adjuster personnel to discuss damage to your property or concerns. Provide documentation (such as a police report) to help verify your understanding of what happened.
6. Burglary or theft: Report any incident involving crime immediately to the police. In some cases insurance companies may deny some or all of a claim unless it was reported properly to the police. Get a copy of the police report if possible.
7. Keep good records of all belongings and valuables. You may want to take photos of all personal property. If filing a claim, make sure to take photos of property before it is repaired as a record of damage.
8. Keep a list of damaged or stolen property, and maintain receipts and other records of ownership.
9. Comply with all guidance and instructions of the insurance company, however make sure you take charge and clarify any concerns or questions. In many cases you may need to act as your own general contractor to coordinate repairs to your property.
10. Complete all paperwork in a timely fashion, and make copies of all paperwork before sending originals to the insurance company. Consider mailing as registered receipt.

It’s also good to remember that insurance companies maintain file records of claims and inquiries by policy holders, similar in many ways to our credit records. All past history of inquiries and claims are considered when evaluating a given individual’s risk profile, and the ultimate cost that individual will pay in insurance premiums. Why? Well, if you and your neighbor use the same insurance company, and your neighbor is filing a lot of claims for accidents and damages… it cost the insurer too much, and guess who’s really paying for all those claims? You and the other policy holders with higher insurance rates! Just an example, and realistically an insurance company is probably going to drop a policy holder if they file too many claims over time. Personally that’s why I maintain high deductibles on auto and homeowner’s policies- even as high as a $1000 or $2000 deductible. Not only does it lower my insurance premiums (a lot!), but it also makes me think twice about filing a claim if I have a small problem with the home or car. If I really need insurance to cover damages however, I know it’s available. Of course it’s important to decide if you want to handle payment of a large deductible too.

What other issues can you think of? If you have any experience with claims, or feedback, we’d love to here about it. Finally, what about consumer rights, complaints or other issues? Great question… insurance in the U.S. is regulated primarily by State law, and you can check the laws and your consumer rights by going to your State agency. Here’s a helpful map via the National Association of Insurance Commissioners website- just click your state and it should take you to the right agency.

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