Friday, March 19, 2010

How do home insurance companies deal with claims?

When facing an insurance case, people often find it frustrating to wait for the insurance company to settle their case and ask how long it takes to process a claim. Many customers look for legal support of their anticipation, asking if there are any laws regulating the duration of insurance procedures.

Every state has its own regulations and legislation concerning insurance activities to which the insurance companies have to abide. In some states you may also find things like "Unfair Insurance Practices Act" or "Unfair Claims Settlement Practices Act", which are more specific and targeted at insurance activities in contrast with broader laws and regulations presented in other states. The nuances and specifics of such regulations have their own peculiarities across different states, however there are certain common points that they all share in regard to insurance companies, imposing them to: a) accept your insurance claim within a specific period of time (usually 15 days); b) conduct a prompt investigation on your claim a) make everything possible to process and settle the claim with a clear liability. Besides, the insurance company has no right to refuse your claim a payment without delivering a valid and clear reason.

In case you feel that your insurance agent or company representative did something without correspondence to state legislation, you might want to speak to the person's supervisor first. In case the attempt wasn't satisfactory, it's time for you to file a report in your state's insurance regulation department. If the department has other similar claims concerning the same company it will conduct an investigation and is likely to impose a fine or even revoke the company's license if the case is quite severe.

In some states you are even allowed to take legal actions against an insurance company individually, if you feel to do so. In case you choose to pursue in a lawsuit against your insurer, there are certain regulations that might help you: a) broader interpretation of coverage provisions, b) limited interpretation of exclusion provisions c) favorable interpretation of any ambiguities contained in the policy. However, take into account that in certain states, in case you're successful with your legal action you will only get the claim amount, while in other states you may also be reimbursed with court fees and punitive damages.

Here are some helpful tips you may use in order to be prepared in case of filing a home insurance claim.

Prior getting the policy:

  • Write down the coverage proposals told by the agent, you may need them for reference in the future

  • through the policy before signing it, making sure that you understand its contents

  • Don't misinterpret or change the information provided to the application

Prior to filing a claim:

  • Read your current policy thoroughly

When the claim is filed:

  • Review your actual home insurance policy and the notes you've taken when signing the policy

  • Inform the insurer about your loss in a prompt manner

  • Keep the claim as objective as possible

  • Log your communication with the insurer (especially when speaking by phone)

  • Get all the materials proving your claim (such as receipts)

  • Have copies of any documents you give to the insurer no matter what

  • Estimate the loss on your own

  • Sign releases or checks only if you think they're fair


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