How the Claims Process Works

Because it doesn’t happen to us everyday, most of us don’t know what to expect when making an auto accident claim or how to deal with the insurance claims adjuster. Here are the three main phases in the process.

A. Submit Your Claim

After an accident, report property claims and/or a personal injury claim immediately to your insurance company. Reporting to your insurance company in a timely matter is imperative. Be prepared to give the following information:

Your policy number
The date, time, location and nature of your loss
The make and model of your automobile
A description of the damage and injuries
Names, contact information, and insurance information of those involved
Your contact information

B. Your Insurance Claims Adjuster Is Assigned

When your claim is entered into the insurance company’s system, an insurance claims adjuster will usually be assigned to you within a day or two. Your insurance claims adjuster will contact you to gain further information and investigate your property claim, personal injury claim, the damage, your coverage and the cause of your loss.

C. Vehicle Damage Inspection

To determine if your vehicle can be repaired or if it’s a total loss, your adjuster will need to inspect it. If your vehicle is repairable, you may take it wherever you want to get it fixed. Read your policy, though, as now many insurance companies are putting restrictions on their auto policies. Few people know about these until they actually get into an accident.

Some policies charge a co-pay of 20% of the repair bill if you don’t take your vehicle to a network provider. (This usually only occurs with low cost or non-standard polices). You are free to get an estimate from a repair facility of your choice, but most insurance companies require repairs to be based on the insurance estimate only. Any supplements requested by the repair facility will need to be approved by the insurance company.

If your claim is simple, then it can usually be resolved by your insurance claims adjuster within a few days. Minor scrapes or dings are often settled the same day the vehicle is inspected.

However, delays can occur when there is severe damage. This almost always results in supplements, delaying the closure of your property claim. If the claim is more complex than usual, if it involves a personal injury claim, or if there are red flags present, it may take even longer to settle. These situations require detailed investigation by the insurance claims adjuster including an in-person recorded statement, the gathering of medical bills, negotiations with attorneys, etc. If the insurance company believes your claim is potentially fraudulent, they may check your background, run your credit, and require multiple statements from you.

This is why it’s so important to know what to expect in an auto accident claim before you actually have one.

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Most insurance policy holders haven’t heard of bad faith and so don’t even think about challenging their denied insurance claim. But it happens every day in the insurance industry.

Yes, there are many responsible and ethical insurance adjusters out there, but the majority of them are extremely overloaded with claims. They simply can’t handle every single one of them according to their company’s or the Department of Insurance’s guidelines.

After a while, handling claims “in bad faith” becomes routine. And since most people have no idea what constitutes bad faith, they do nothing to fight their insurance claim denial.

That’s why it’s so important to understand the theory behind bad faith so you can protect your “rights of insured”.

What Is Bad Faith? And What Are My Rights of the Insured?

An insurance policy is a contract between you (the Insured) and your insurance carrier (the Insurer). As an insured, or policyholder, you are bound to the terms and conditions set forth in the policy. You also have certain duties when it comes to filing a claim.

However, the insurer is also bound by the terms of the policy and has certain obligations to meet. So in exchange for your monthly premium, the insurer agrees to provide the coverage set forth in the policy. This contract requires that it acts in “good faith” toward you.

When an insurer unreasonably withholds the benefits of the policy from its insured, it is considered to be in “bad faith” and is not upholding your rights of insured.

Insurance attorneys know that insurers attempt to deny or underpay claims for any reason they can. To determine whether an insurer is acting in good faith, the court must determine whether or not their conduct is “reasonable”. To prove bad faith, you only have to show that the insurer failed to honor the contract and had no reason not to pay what was due.

Examples in Insurance Claim Denials

There are many ways insurance companies commit bad faith and violate the rights of the insured:

Failing to promptly and thoroughly investigate a claim;
Unreasonable delay of payment of benefits;
Unreasonable insurance claim denial;
Using unreasonable interpretations in translating policy language;
Refusing to settle the case or reimburse you for your entire loss.

If an insurance claim denial is considered “unreasonable” and is demonstrated to be dishonest, deceptive or fraudulent, a judgment may be obtained and punitive damages awarded as well as compensation for the actual loss under the policy.

However, insurance companies have the right to deny your claim if you haven’t lived up to your end of the contract/policy, if your claim isn’t covered by your policy or is fraudulent.

How to Dispute Insurance Claim Denial

If you still feel you are in the right after having reviewed your insurance policy, collect all of the correspondence you’ve had with your insurance company and other pertinent documentation. Write a letter and send it certified mail to the Director of Claims of the insurance carrier you deal with citing the pertinent points of the policy and demonstrating that their insurance claim denial of benefits is unreasonable. Also write the Commissioner of the Department of Insurance in your state and ask them for a review and assistance in the matter.

If that doesn’t work, take your policy and documentation to a qualified insurance attorney. He or she should be able to determine after a review of the facts whether or not your insurance company has violated your rights of insured and committed bad faith.

How To Fight Back

When an insurer commits bad faith on a denied insurance claim, you have three options: 1) negotiate an acceptable settlement with the insurer, 2) do nothing and give up, or 3) sue the insurer. A vast majority of people unfortunately choose to do nothing and give up.

But often when an insurance attorney becomes involved, an insurer will take the claim much more seriously and try to correct its earlier bad faith direction in order to minimize the amount of the claim and any punitive damages. Typically, even when it is necessary to sue an insurer for bad faith, the case is often settled before the trial.

Why Do They Commit Bad Faith?

There is a good financial reason for insurance companies to unjustly deny claims. Because very few policy holders dispute an insurance claim denial, insurers save a lot of money.

Here’s how it works: Let’s say that an insurer denies 100 claims. Of these 100 claims, 95 go unchallenged and disappear while five policy holders decide to dispute their insurance claim denial.

Of these five, the insurer reverses its denied insurance claim decision on four of the claims. But it continues to refuse coverage on the fifth claim.

The fifth claimant then files a lawsuit for bad faith and is awarded punitive damages against the insurer. Even if this claimant gets millions of dollars, the insurance company still saved millions by not having paid the other 95 denied insurance claims that were not disputed.

And that, in short, is why they do it and how they get away with it.

1. Compare Auto Insurance Companies and Coverage
One way to save on auto insurance is to compare several agencies to see what they offer. Compare the types of coverage, the actual benefits of the coverage (should you ever need to make a claim), and the pricing for each policy. Insurance policies can vary greatly in price, so shopping around will help you find a policy that fits your budget and needs. If you’re classified as a safe driver, you can use this to your advantage as you compare car insurance offers. Hint: The cheapest car insurance is not always best, so check out the company and its history thoroughly before agreeing to a policy.

2. Opt for a Higher Deductible
Most car insurance agencies will offer lower premiums if you opt for a higher deductible. The deductible is a set amount you agree to pay before making an insurance claim. This could be $250, $500, or even $750 or higher. If you agree to the higher deductible, your premium will likely be as much as 15 to 30 percent less.

3. Cancel Collision Coverage on Older Vehicles
If you have an older vehicle, insurance can cost more than the car is worth. You are not required by law to keep collision on an older vehicle as long as you don’t owe a debt on the car through a lending institution.

4. Avoid Buying Sports Cars
If you’re in the market for a new or used vehicle, buy a low profile car – not a sports car. Sports cars can cost substantially more when it comes to auto insurance and they are also very expensive to repair. Sports cars are often targeted by thieves as well. Obtain an estimate of the insurance costs before making a purchase to be on the safe side.

5. Low Mileage Premium Discounts
If you drive under a certain number of miles per year, your insurance company may offer a premium discount for low mileage. For instance, if you drive 8,000 miles or less per year, you might be able to pay less on insurance. Ask the company about this option to see if you qualify. If you don’t currently meet the low mileage requirements, consider car pooling to work if possible.

6. Other Auto Insurance Discounts
You can obtain discounts for being a safe driver (with a clear driving record), if you’ve completed a driving course, or for being a non-smoker. Some companies will give discounts if you insure both your home and vehicle with the same agency. You can also benefit from discounts if your vehicle features certain safety items such as automatic seat belts, certain types of airbags, etc. If your teenager starts driving, have them share a family car instead of buying one of their own. Also, let the agency know if your teen makes honor roll or takes a defensive driving course in school.

7. Avoid Extra Expenses
You can find the cheapest car insurance by avoiding extra expenses such as towing, car rentals, or extra medical coverage (if you already have coverage through a health insurance policy). If buying a new car, read the full factory warranty to see what’s included. Then you can possibly drop these items from your car insurance policy and reduce your premium.

8. Keep Inexpensive Auto Insurance
The best way to keep your auto insurance at a low cost is to maintain a good driving record. Avoid speeding or traffic violations. These can cause your insurance premiums to increase a great deal. Also, try to maintain good credit. Many insurers today are considering a person’s credit rating when determining auto insurance rates. Remember to pay your premium bills on time. Being late on a bill payment can cause your policy to be reinstated to former higher pricing even if you’ve been using the same company for a long while. Combine each of these tips to enjoy great savings on insurance. You can comparison shop online and get instant car insurance quotes. The cheapest car insurance comes only with a little research and staying in step with the rules of your agency.

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A car is often considered to be the second largest investment that a consumer will ever make, so it is absolutely necessary to have car insurance to protect that investment. Although it is incredibly important, it doesn’t have to be expensive and free car insurance quotes are relatively easy to obtain. Many states only actually require drivers to maintain liability insurance, but free auto insurance quotes are not just limited to liability insurance. In fact, many of the companies that offer free auto insurance quotes have a wide range of products and offerings that will protect drivers in a number of different situations.

Sometimes it is necessary to seek out insurers that specialize in a particular area, such as ones that provide auto insurance quotes for women. Most female drivers are able to enjoy lower premiums due to the fact that most insurance companies consider them to be less of a risk than their male counterparts. As a result, most auto insurance quotes for women are significantly cheaper than the same coverage for men.

Most people shop for car insurance by calling a local agent and asking for the best price. Selecting an insurance company solely because it is close by is seldom a good idea and most consumers that pick an insurer out of the phone book do not find the appropriate coverage that they desire. The huge selection of insurance providers can make it difficult, as can the abundance of television advertisements that play constantly. Because there are multiple insurance companies, consumers can use it to their advantage and play the insurers against each other.

Insurance comparison websites are an excellent way to quickly compare multiple estimates from different auto insurers. A wise consumer will make sure that all coverage levels are similar during the quoting process so as to receive the most accurate comparison. Filling out a short online form is often all it takes to be provided with free auto insurance quotes.

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Life insurance in its original design covered a person’s life for a specific amount of time and paid a specific amount of money to a beneficiary upon that person’s death. Thus life insurance, you were covered for your life. Calculations for costs were made, based on average life expectancy, cost of running a business and current long term investment returns. Actuaries would take all this information and calculate the amount of money a person would pay per thousand dollars of coverage and come up with a cost – for life.

Things changed over time. People had short term financial obligations like mortgages, lines of credit etc, wanted to insure it, but only for a certain period of time, or as you would have it, for a “term”. That is where the expression ” term insurance” came to pass. Rather than covering a person for their life expectancy, they were only covered for a term.

This brings the cost of the live insurance down. Think of it this way. Your car insurance premiums and your house insurance premiums are usually established for a year at a time. When your renewal comes up each year there is a “price change”, usually up. This is really “one year term insurance”, except it is on your house or car, not your life. If your car insurance broker said that you could have your rates “guaranteed” for 10 years, it would then become a 10 year “term insurance” plan on your car. We all know the average cost for the 10 years will be greater than if you had it one year at a time.

Just imagine if your car insurance broker suggested that you could get car insurance with a guaranteed cost for the rest of your life. It would never happen and if it did, the costs would appear high now, but 20 years from now the cost would probably sound cheap.

Hope this helps in your thinking. Term insurance is really Live insurance with the costs adjusted every so many years. As well, most term insurance gets prohibitively more expensive when you get into your late 60′s. With the exception of term to 100, which requires an entirely separate discussion, most term insurance runs out by age 80 or sooner, probably when you will need it the most.

Unfortunately it’s true that even the most creative and care-free among us must be insured against the potential difficulties of life. As an independent artist and craftsperson, you are no less in need of insurance than a businessman or an automotive worker, but insurance may be a little trickier for you to obtain. Basically, you have to figure out how to get health insurance, property insurance, and liability insurance.

Health insurance is pretty obvious, but this is probably the type of insurance with the most fluctuation. You can get plans that cover just you or your whole family. Some plans will take care of everything from a visit to the doctor when you have a sinus infection to major medical expenses, but other plans will only take care of the latter.

Here are a few things to consider when it comes to health coverage. First off, think about what you actually need. Although independent insurance plans are cheaper than they used to be, they’ll still eat up your income. If you’re young and healthy, go with a major medical plan that will protect you from large, unexpected expenses, but if you are in poor health or have children, shell out for a better health insurance plan, which may save you money in the long run.

You’ll need liability insurance if you meet clients in a studio or in a booth at an event. You may thing that no one would ever sue you, but it happens all the time. If someone trips in your studio or get cut on a rusty nail at your booth, you need to be sure that you have enough liability insurance to cover a potential lawsuit.

Lastly, you’ll need property insurance. Since you’re dealing with valuable handmade items as well as lots of raw materials, you’ll need a good bit of property insurance. Check around with different providers, who may be able to cut you deals if you buy liability or health insurance through them, too.

When you’re buying property insurance, be sure that you know exactly what it will cover. Get more than enough to replace all of your artwork, supplies, equipment, and structures should your studio burn down one night. Also, be sure that your work is covered in transit and when it is not on your property so that you know it’s covered during shows.

Within these categories, there are a lot of choices to make, but at least now you have an idea of what kinds of insurance you need as an artist.

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Insurance can be so confusing. You get so tired and bored reading the policy that when you get to the end you tend to skim over the last parts. One of the most important parts of the insurance policy is at the end though – the endorsements section. Here is why you should pay close attention to this section.

Most policies’ basic coverage forms end with a section called endorsements. Endorsements add to, take away or change provisions contained in your basic insurance policy form. Endorsements are typically one, two, or three pages long each.

One reason insurers use endorsements is to save money. If they have new provisions or have changed provisions in their policy, using an endorsement will allow them to save on re-printing costs. The insurance company simply adds an endorsement at the end of the policy to incorporate the new or changed provisions. So be to sure to check this section when you are purchasing insurance..

Endorsements are often used to restate a policy provision after a court decision interprets the provision in question in a different way than the insurer has been interpreting it. So you can see why you need to read this section carefully after you have finished looking at the basic policy.

Most commonly, endorsements add exclusions not stated in the basic insurance policy form. For example, in home owners insurance policies these often include such things as dog bites and home daycare services performed for a profit. Also typically flood and earthquakes are excluded from most home owners polices. Separate policies can be purchased elsewhere.

Knowing what the coverage is excluded by an insurance policy is very important, especially when comparing insurance policy quotes.

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Just about everyone can benefit from liability insurance. It’s one of the most affordable insurance options and offers protection from being sued by people who may have suffered an accident that they blame on you. There are many different types of liability insurance, so it’s important to know which ones you need.

Automotive Insurance

Liability should come automatically with your auto insurance. Basically, if anyone is injured while riding in your car or in another car that is involved in an accident with you, you will be covered. It also protects you from legal action should someone decide the accident or injury was your fault.

Cars owners are probably the most likely to have need of their insurance, thanks to the dangers of a moving vehicle. You will make use of it in the event that you ding another vehicle… even with your door, as well as if you are involved in an accident of any kind.

Everyone who owns a vehicle needs this type of insurance.

Home Insurance

Liability policies are common when you insure your home, as well. These protect you against the possibility of legal action due to someone getting hurt on your property. It’s important to have this if you own a house, particularly if you are renting it out. Even simple accidents such as falling down the front steps or tripping on the way into the garden or even a child falling off a bunk bed can become an issue. While it may not be your fault, if you own the property where the incident occurred, you could be held liable. Often, it is even a friend who will take legal action, something that you might never expect, but can happen in the blink of an eye, especially if their children are the ones affected.

All homeowners need to ensure that they are protected by this type of liability insurance.

Business Insurance

For business owners, there are two reasons to consider a liability policy for their business. First of all, if anyone is injured or if property damage occurs (such as a vehicle being vandalized while someone is shopping in your store), it’s important to have business liability insurance to protect yourself against potential lawsuits. This is called general business liability.

There is another type of liability insurance, professional, which protects the business owner against personal financial loss if something goes wrong. These liability policies are not necessarily standard with business insurance, so it’s important to double check the fine print.

All business owners need to have business liability insurance.

In some cases, you might need all three types of insurance. The good news is that liability policies are usually the cheapest types of insurance and you’ll be able to afford all three if needed.

No one likes to think that their friends or clients are going to sue them, but unfortunately, it happens all too often. It’s not good enough to simply trust that your careful attention to detail will prevent this from happening… you’d be surprised at what some people come up against.

For example, a few years back, a man found himself liable for injuries a thief incurred while trying to break into the man’s home! While this is certainly an unusual situation, it’s best to be prepared. You never know when someone will feel that they have sustained injury or personal harm due to negligence on your part, even if you have taken as much care as possible to prevent problems.

In short, if you drive, own a house or a business, you need to invest in liability insurance. It will save you a lot of grief in the future.

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