Insurance claims are getting more and more complicated. Insurance companies are on a mission to increase their profits. That may mean that your insurance company will deny claims, delay claims and defend claims to beef up their bottom line.
The fabled management consulting firm of McKinsey and Company was retained a short time ago by three of the largest Property/Casualty companies in the world. That would be Allstate, Liberty Mutual and State Farm. McKinsey’s mission...as always...is to show companies how to earn more profits. Their final report recommended “The Three Ds”...defend claims, deny claims and delay claims.
All three companies have used this strategy aggressively to boost profits for their shareholders. Concurrently, all three have experienced higher than ever complaints of claims handling. Other companies have noticed the higher profits, and will likely follow suit.
I’m leading with that part of the story to show you that the claims experience you may look forward to...or have had...or are experiencing right now...is not a mistake, or an isolated incident.
So, what can you do when you have a claim?
First: understand that you cannot just trust the insurance company to take care of your claim for you. They are protecting THEIR money. The moment you file a claim, you become their adversary. If you allow the insurance company to handle your claim for you, you are a fool. They will cut corners and pay the absolute LOWEST amount possible to get you to sign a Full Release and close the claim. You will leave hundreds or even thousands of dollars on the table that you could have collected.
Second: just because you have a deductible on your insurance policy doesn’t mean that the deductible amount is all you’re going to have to spend. You need to realize that you might have to spend some extra money to collect the money you’re entitled to collect.
Like what?
- $50-$200 to have your attorney review ALL the documents the insurance company asks you to sign.
- $50-$200 to get an independent appraisal of your car if it’s been damaged.
- $50-$200 to get an independent restoration contractor’s estimate of your real estate property if it has been damaged. Many restoration contractors will do an estimate for free, but be prepared to pay for it.
- $50-$200 to have your attorney supervise your recorded statement with the adjuster.
- $50-$200 for an Independent Medical Examination if you are injured in an accident that was not your fault.
These are just a few of the claims expenses you should EXPECT to pay on your own behalf. Your policy states that it is YOUR RESPONSIBILITY to prove your claim.
But cheer up!! Spending a small amount of money to prove your claim will usually result in you collecting hundreds or even thousands more dollars in your claim settlement.
Tuesday, March 31, 2009
Wednesday, March 25, 2009
America’s Health Insurers: Bullies Meet a Bigger Bully
Think about the depression that we’re entering in America. Millions of people are losing their jobs, and thousands of companies are either laying off workers, closing their doors or dropping employee benefits. Many of those now-unemployed people are also losing their health insurance. There are presently about 48 million uninsured people in the US. This gives Congress the political cover to do what they’ve wanted to do since the Clintons were in the White House...nationalize health care.
I just read an Associated Press report about the health insurance industry. The insurance companies are terrified of the future, which looks like it’s going to include some kind of Federal takeover of health insurance.
America’s Health Insurance Plans and the Blue Cross/Blue Shield Association (BCBS), two giant health industry interest groups, issued a letter to key senators on March 24th. In the letter, they stated that their member insurance companies were willing for the first time to curb the controversial practice of charging higher premiums to people with a history of medical problems.
Although the proposal left open certain loopholes, it’s a pretty big change of the old policy of “risk rating.” In today’s insurance market, insurers charge higher premiums to people with previous medical problems and who are trying to purchase individual coverage. If such a person even gets an offer of coverage from an insurer, many times they cannot afford the premium. However, in group coverage through employers, past medical history is not usually considered.
Last year, the insurance companies offered to forego the practice of denying coverage to sick people.
The conciliatory offers did not extend to small businesses, though. Small businesses with even one sick worker can see their premiums jump up significantly year to year.
It’s somewhat comical to see what the insurance companies will do to save their own skin. For decades, they have been sticking it to individuals on health insurance premiums. But now that it looks like Washington is going to set up national health care that will either be in direct competition with them, or might just put them out of business, they have had a “come to Jesus” experience.
Please don’t misunderstand the tenor of this article. I believe that the free market should dictate health care policy, not government. I believe that nationalizing health care is an unconstitutional usurpation of power. I’m just amused to observe that the bullies in the health insurance industry have met a bigger bully, and instead of fighting, they’re cowering.
If the insurance companies wanted to play hardball with Washington, they could win. All they would have to do is to begin systematically selling off their government securities, such as Treasury Bills and other Federal debt instruments. A small sell-off would shake the very foundations of the Federal Government and threaten to crash the entire financial system.
That would put Congress and the President on the defensive, and stop health care nationalization.
I just read an Associated Press report about the health insurance industry. The insurance companies are terrified of the future, which looks like it’s going to include some kind of Federal takeover of health insurance.
America’s Health Insurance Plans and the Blue Cross/Blue Shield Association (BCBS), two giant health industry interest groups, issued a letter to key senators on March 24th. In the letter, they stated that their member insurance companies were willing for the first time to curb the controversial practice of charging higher premiums to people with a history of medical problems.
Although the proposal left open certain loopholes, it’s a pretty big change of the old policy of “risk rating.” In today’s insurance market, insurers charge higher premiums to people with previous medical problems and who are trying to purchase individual coverage. If such a person even gets an offer of coverage from an insurer, many times they cannot afford the premium. However, in group coverage through employers, past medical history is not usually considered.
Last year, the insurance companies offered to forego the practice of denying coverage to sick people.
The conciliatory offers did not extend to small businesses, though. Small businesses with even one sick worker can see their premiums jump up significantly year to year.
It’s somewhat comical to see what the insurance companies will do to save their own skin. For decades, they have been sticking it to individuals on health insurance premiums. But now that it looks like Washington is going to set up national health care that will either be in direct competition with them, or might just put them out of business, they have had a “come to Jesus” experience.
Please don’t misunderstand the tenor of this article. I believe that the free market should dictate health care policy, not government. I believe that nationalizing health care is an unconstitutional usurpation of power. I’m just amused to observe that the bullies in the health insurance industry have met a bigger bully, and instead of fighting, they’re cowering.
If the insurance companies wanted to play hardball with Washington, they could win. All they would have to do is to begin systematically selling off their government securities, such as Treasury Bills and other Federal debt instruments. A small sell-off would shake the very foundations of the Federal Government and threaten to crash the entire financial system.
That would put Congress and the President on the defensive, and stop health care nationalization.
Tuesday, March 24, 2009
Insurance Appraisers: Property Appraisals and Estimates
In this article, we’re going to look at how the value of a property claim is determined. This could relate to your real estate property or your personal property, such as your automobile or the contents of your home.
Before we go any further…remember this statement:
THERE IS NOTHING IN YOUR POLICY THAT REQUIRES YOU TO GET MORE THAN ONE ESTIMATE.
Many times, you’ll hear an adjuster recommend that you get three estimates. That’s just not necessary, and wastes your time and money. That procedure had everything to do with price, but has almost nothing to do with quality and value. Your home or your property is not a commodity…a mere rubber stamp of every other piece of property. It should not be treated like a commodity. Don’t let an adjuster get away with this.
Here’s another statement to remember:
AN ESTIMATE IS AN APPROXIMATE COST OF REPAIR OR REPLACEMENT OF PROPERTY. IT IS NOT ETCHED IN STONE. IT IS NOT A CONTRACT TO REPAIR OR REPLACE PROPERTY.
Automobile Damage Appraisals
If your loss is an automobile loss, and your vehicle is damaged, YOU seize the initiative and take your vehicle to the body shop of YOUR CHOICE. It would be best to have your vehicle inspected by the insurance company appraiser and your chosen body shop appraiser at the same time. That way, they can agree on the scope of damages before they start calculating the repair costs.
Read your policy. Some insurance companies actually specify in their policy that you must take your vehicle for repairs to the insurance companies “Approved Vendor.” But most policies do not. However, most insurance companies will try hard to direct you to their “Approved Body Shop Vendor.”
Just remember this. Is the “Approved Vendor” on your side or on the insurance company’s side? Did that body shop make a special deal with you to repair your vehicle? NO! So, just who do you think that “Approved Vendor” is going to be loyal to?
The insurance companies make deals with body shops so the repairs will get done at a reduced price. That usually means cutting corners on quality and using inferior aftermarket parts. You do understand that a car can look great from the outside after repairs, and not be the same car you had before the accident?
In Chapter 23 of my book, “Insurance Claim Secrets Revealed!”, I talk about my experience recently in an auto accident. One of the things I write about is insisting that your body shop appraiser write an estimate using Original Equipment Manufacturer (OEM) parts instead of aftermarket parts. Don’t give in on this point, or you’ll be compromising your safety in that vehicle after it’s repaired.
Once you have an OEM estimate from your chosen body shop, you’ll compare it with the insurance company appraiser’s estimate. You’ll likely find that your estimate is higher in price than the insurer’s estimate. Negotiate from YOUR ESTIMATE, not the insurer’s estimate. Once you’ve gotten agreement on the scope of damages and the amount of repairs, you’re ready to settle that part of the loss.
Don’t sign off on the release until the repairs are completed and you have done and extensive test drive and inspection of the repairs. Once you’re satisfied, then you can consider signing off. Have your attorney review the form before you sign it.
Homeowners and Renters Appraisals
In a homeowners insurance loss, in which the dwelling itself is damaged, the claims adjuster will inspect the dwelling for damage. He will photograph the damage and take measurements. He will make notes of all of the damaged items, and note the quality of the building materials. He will note the cause of the damage, if it can be readily determined. All of that information is commonly referred to as the “Scope of Damages.”
You must get a restoration contractor of your own to inspect the damages and write an estimate. Don’t just accept the estimate of the claims adjuster.
It would be a good idea to have your contractor meet you and the adjuster at your home at the time of the inspection. That way, you can all look over the damage, and you, the adjuster and the contractor can agree on the scope.
There should be an agreement between you, the policyholder, the contractor, and the adjuster on the scope of damages. Likely, you won’t have a chance to accept the adjuster’s scope until he takes the information from his inspection back to the office and enters that information into his estimating software in his computer. Most adjusters will be able to print a copy of the scope and send it to you. You should insist on a written scope of damages from the adjuster.
Don’t sign anything without having your attorney review it FIRST.
Adjusters are human and sometimes miss damages. So do contractors. That’s why there should be an agreement on the scope of damages…before you ever begin discussing the cost of repairs.
Think about it another way. Let’s say you are going to build a new house. Your architect would have to make drawings and specifications of all of the materials that were going to be used to build that house. When it comes time to get bids from contractors, everyone bidding has the same information upon which to base their bid.
It’s no different when you’re getting bids and estimates in an insurance claim.
Once you have the scope of damages, you can then expect to receive the estimate from your contractor and the adjuster. The best way to handle this is to insist that the contractor and adjuster reach an agreement on the amount of the estimate. Once that’s done, the adjuster can report to the insurance company and have them pay the claim.
CONTENTS, or UNSCHEDULED PERSONAL PROPERTY
Get a copy of a JC Penney catalog. Even get two…one Fall/Winter, one Spring/Summer. Get your hands on as many other catalogs as you can find. As you look at the pages of the catalogs, you’ll remember the things that you had in your home. You will find hundreds or thousands of dollars in personal property that you likely would not have remembered owning. Not only will you remember dozens and dozens of items, but you’ll have a retail price from a reputable retailer right at your fingertips.
Please don’t misunderstand what I’m telling you to do here. I’m NOT telling you to write down items on your inventory list that you did not own. That’s fraud, and you can go to jail for fraud. I’m simply showing you a way to remind yourself of things long ago purchased, and possibly stored and forgotten. For example, how many parents bought a vaporizer to run in their children’s rooms at night when the young children were sick? That vaporizer might not have been used in years, but you owned it, and you have a right to collect for it under the terms of your policy.
When you have completed the Contents Inventory Worksheets, make copies and submit the copies to the claims adjuster.
In closing, remember this. All insurance claims adjusters and appraisers use estimating software these days. This software is a vast database of materials and labor for any kind of property. But many companies make a deal with the software designers to write software that undervalues the repair costs for the property. Consequently, when the appraiser uses that software, estimates for repair are consistently lower than the actual costs. That’s why you need your own estimates.
Take control of your insurance claims! Add hundreds or even thousands more dollars to your claim settlements!
Before we go any further…remember this statement:
THERE IS NOTHING IN YOUR POLICY THAT REQUIRES YOU TO GET MORE THAN ONE ESTIMATE.
Many times, you’ll hear an adjuster recommend that you get three estimates. That’s just not necessary, and wastes your time and money. That procedure had everything to do with price, but has almost nothing to do with quality and value. Your home or your property is not a commodity…a mere rubber stamp of every other piece of property. It should not be treated like a commodity. Don’t let an adjuster get away with this.
Here’s another statement to remember:
AN ESTIMATE IS AN APPROXIMATE COST OF REPAIR OR REPLACEMENT OF PROPERTY. IT IS NOT ETCHED IN STONE. IT IS NOT A CONTRACT TO REPAIR OR REPLACE PROPERTY.
Automobile Damage Appraisals
If your loss is an automobile loss, and your vehicle is damaged, YOU seize the initiative and take your vehicle to the body shop of YOUR CHOICE. It would be best to have your vehicle inspected by the insurance company appraiser and your chosen body shop appraiser at the same time. That way, they can agree on the scope of damages before they start calculating the repair costs.
Read your policy. Some insurance companies actually specify in their policy that you must take your vehicle for repairs to the insurance companies “Approved Vendor.” But most policies do not. However, most insurance companies will try hard to direct you to their “Approved Body Shop Vendor.”
Just remember this. Is the “Approved Vendor” on your side or on the insurance company’s side? Did that body shop make a special deal with you to repair your vehicle? NO! So, just who do you think that “Approved Vendor” is going to be loyal to?
The insurance companies make deals with body shops so the repairs will get done at a reduced price. That usually means cutting corners on quality and using inferior aftermarket parts. You do understand that a car can look great from the outside after repairs, and not be the same car you had before the accident?
In Chapter 23 of my book, “Insurance Claim Secrets Revealed!”, I talk about my experience recently in an auto accident. One of the things I write about is insisting that your body shop appraiser write an estimate using Original Equipment Manufacturer (OEM) parts instead of aftermarket parts. Don’t give in on this point, or you’ll be compromising your safety in that vehicle after it’s repaired.
Once you have an OEM estimate from your chosen body shop, you’ll compare it with the insurance company appraiser’s estimate. You’ll likely find that your estimate is higher in price than the insurer’s estimate. Negotiate from YOUR ESTIMATE, not the insurer’s estimate. Once you’ve gotten agreement on the scope of damages and the amount of repairs, you’re ready to settle that part of the loss.
Don’t sign off on the release until the repairs are completed and you have done and extensive test drive and inspection of the repairs. Once you’re satisfied, then you can consider signing off. Have your attorney review the form before you sign it.
Homeowners and Renters Appraisals
In a homeowners insurance loss, in which the dwelling itself is damaged, the claims adjuster will inspect the dwelling for damage. He will photograph the damage and take measurements. He will make notes of all of the damaged items, and note the quality of the building materials. He will note the cause of the damage, if it can be readily determined. All of that information is commonly referred to as the “Scope of Damages.”
You must get a restoration contractor of your own to inspect the damages and write an estimate. Don’t just accept the estimate of the claims adjuster.
It would be a good idea to have your contractor meet you and the adjuster at your home at the time of the inspection. That way, you can all look over the damage, and you, the adjuster and the contractor can agree on the scope.
There should be an agreement between you, the policyholder, the contractor, and the adjuster on the scope of damages. Likely, you won’t have a chance to accept the adjuster’s scope until he takes the information from his inspection back to the office and enters that information into his estimating software in his computer. Most adjusters will be able to print a copy of the scope and send it to you. You should insist on a written scope of damages from the adjuster.
Don’t sign anything without having your attorney review it FIRST.
Adjusters are human and sometimes miss damages. So do contractors. That’s why there should be an agreement on the scope of damages…before you ever begin discussing the cost of repairs.
Think about it another way. Let’s say you are going to build a new house. Your architect would have to make drawings and specifications of all of the materials that were going to be used to build that house. When it comes time to get bids from contractors, everyone bidding has the same information upon which to base their bid.
It’s no different when you’re getting bids and estimates in an insurance claim.
Once you have the scope of damages, you can then expect to receive the estimate from your contractor and the adjuster. The best way to handle this is to insist that the contractor and adjuster reach an agreement on the amount of the estimate. Once that’s done, the adjuster can report to the insurance company and have them pay the claim.
CONTENTS, or UNSCHEDULED PERSONAL PROPERTY
Get a copy of a JC Penney catalog. Even get two…one Fall/Winter, one Spring/Summer. Get your hands on as many other catalogs as you can find. As you look at the pages of the catalogs, you’ll remember the things that you had in your home. You will find hundreds or thousands of dollars in personal property that you likely would not have remembered owning. Not only will you remember dozens and dozens of items, but you’ll have a retail price from a reputable retailer right at your fingertips.
Please don’t misunderstand what I’m telling you to do here. I’m NOT telling you to write down items on your inventory list that you did not own. That’s fraud, and you can go to jail for fraud. I’m simply showing you a way to remind yourself of things long ago purchased, and possibly stored and forgotten. For example, how many parents bought a vaporizer to run in their children’s rooms at night when the young children were sick? That vaporizer might not have been used in years, but you owned it, and you have a right to collect for it under the terms of your policy.
When you have completed the Contents Inventory Worksheets, make copies and submit the copies to the claims adjuster.
In closing, remember this. All insurance claims adjusters and appraisers use estimating software these days. This software is a vast database of materials and labor for any kind of property. But many companies make a deal with the software designers to write software that undervalues the repair costs for the property. Consequently, when the appraiser uses that software, estimates for repair are consistently lower than the actual costs. That’s why you need your own estimates.
Take control of your insurance claims! Add hundreds or even thousands more dollars to your claim settlements!
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