How to Deal with a Deadbeat Insurer
Most insurers are upright and honest; they come through in the clutch and convince you that your premiums were not paid in vain.
Nonetheless, consumers file thousands of complaints with their state departments of insurance each year, claiming they've been cheated, wronged, denied, scammed, delayed, abandoned and/or underpaid by their insurance company. Most cases involve health and auto insurance, but a great many involve home and life insurance.
Delay is the most common consumer omplaint. According to data compiled by the National Association of Insurance Commissioners (NAIC), delayed claim handling was the cause for 20 percent of all confirmed complaints in 2008.
(Confirmed complaints are cases where the insurance department sides with the consumer.)
Claim denial came in a close second, with nearly 19 percent-roughly 25,700 cases*-of confirmed cases.
The Most Common Complaints
- Delayed claim
- Denied Claim
- Unsatisfactory settlement/offer
What to do if you think you're being swindled by your insurer
Know thy coverage
Many disputes turn out to be a misunderstanding on the part of the consumer. (Which is understandable given the convoluted legalese found in policy materials.) Double-check your policy's fine print. Then have a close friend or family member do the same.
Explore the easy route first
Put in a call to your agent or the insurance company that issued the policy. In most cases this will resolve or clarify the issue.
Write a letter
If a call to your agent or insurer doesn't settle the matter, write a letter to the insurance company. Include your name, policy information, a description of the situation and any relevant documentation to back up your case.
Document everything
Keep meticulous records. Without them, your case will falter. File any and all policy documents, receipts, appraisals and letters. Take notes during phone conversations and record the names of people you talk to.
Go to your state regulators
Seek redress with your state department of insurance if none of the above actions work. (Find your state insurance department web site.)
Find a mediator
Mediators act as diplomats. Their goal is to get both sides to agree and move on. Mediators cannot bind either of the parties to an agreement. Mediator's motto: "Hey, let's work this out."
Consider arbitration
If you've been wronged and there's a decent chunk of money on the line, consider going the arbitration route, the last stop before full-blown, no-holds-barred litigation. Arbitration can be costly and intense; it's not for minor disputes.
Lawyer up
If you absolutely know that truth is on your side but feel??out of your depth, consider hiring a lawyer.??However, last time we checked, lawyers were pretty expensive, so make sure a potential??winning outcome will exceed the cost of legal proceedings.
