More On Money

In my last entry, I touched upon the importance of reserves in getting your claim paid fairly. This can not be overstressed: if your claim is under reserved, the chances of it being under paid increase dramatically. Now you might be asking yourself why: why doesn’t the insurance company simply increase the reserves?

Typically, the reserves are readjusted early in the claims process. When the loss is first called into the company a claim is created and a provisional reserve is set aside. After the adjuster has initially inspected the loss the reserves will be readjusted to reflect the adjusters opinion of the damage and its’ value. At this point, reserves begin to solidify: like concrete it’s very hard to make changes. The reason for this is simple. The insurance company begins to believe that it has accurately assessed its’ financial exposure. The adjuster believes they have accurately relayed the extent and value of damages. And with the passage of time, both are reluctant to admit to making a mistake.

So what happens if the reserves are mismatched to the loss? If they are less than what is needed, the insurance company will begin the process of attempting to pound the proverbial square peg into the round hole. That is they try and make the loss fit the reserves. This action is different from the normal disagreements that accompany losses. This is tantamount to a constructive denial of what is to the policyholder a covered loss.

When you find yourself in this situation, it is imperative that you remain emotionally detached from the process of the adjustment. Don’t let on that you are frustrated or upset. This only encourages the adjuster to continue down the path of confrontation. Also, don’t speak to the insurance adjuster or anyone from the company, rather, put everything in writing. That way you have a complete record of what is going on.

When you write to the company, explain how their refusal to pay your claim is placing you in financial jeopardy. How you are depending upon their fair and prompt payment to ease your financial burden and how they are letting you down. Ask them to “please help you”. If they insist upon your using their contractor, ask them why they won’t pay enough to enable you to choose a market priced contractor. Ask them why they have to restrict your ability to trade with whomever you wish. So on and so forth… you get the idea.

Write often. A weekly letter imploring the insurance company to help you in your time of need is golden, if you ultimately have to litigate to get your claim paid. The weekly letter is doubly golden if they don’t respond.

It’s a lot of work to get your claim fairly paid, but it’s not impossible.