| May 27, 2005 Unsure Insurance by Kevin Morford, insurgent49 insurance,
n. 1. An ingenious modern game of chance in which the player is
permitted to enjoy the comfortable conviction that he is beating the man who keeps the table. - Ambrose Bierce, The Devil’s Dictionary Insurance companies do not make their money by paying insurance claims. They make their money by collecting premiums, and by keeping the payment of claims down to a minimum. As a result, as long as you are paying their premiums and not making any claims against them, they will do whatever they can to reassure you that they are your friend and will be there for you in your time of need. This helps to ensure the continued payment of premiums. Most people never see the true face of their insurance company until they make a major claim for reimbursement of a loss. That is when the fangs tend to be bared. That does not mean that insurance companies never pay claims. Many claims, especially for smaller amounts and for losses that can be calculated mathematically, are routinely settled on a mutually agreeable basis. If your parked car is sideswiped by a hit and run driver, and your insurance is in good order, the cost of the repairs will probably be paid without being contested. But in many other situations, insurance companies will either refuse to pay anything, or will only offer a lowball settlement. There are many different ways that insurance companies try to avoid or minimize their payment of claims. Sometimes they argue that you failed to give them timely notice of the claim, and therefore have lost your coverage. (Sorry, you forgot to give us notice while you were in the hospital for the last six months.) Other times they argue that the loss is excluded from the scope of coverage of the insurance policy. (Sorry, your home was damaged by a leaking pipe, and flood damage is not covered under this policy.) They argue that some other insurance policy must pay first, before they must pay. (Sorry, that claim should be paid by XYZ insurance company, don’t come to us unless you collect from them first.) Sometimes they argue that some act on your part eliminates their obligation to pay under the policy. (Sorry, but when you signed that release form at the hospital, you lost your coverage under this policy.) Sometimes they invoke an arbitration clause that lets an arbitrator whom they approve decide what your damages are. (Since you won’t accept our lowball offer, we’ll have to let “Joe” here decide how much you should get.) They also seek to induce the insured person to sign a release of the claims before he or she really knows how bad the losses are. (Here, I’ll give you this check for $5,000 if you will sign this release before they pry you out of the wreckage.) This is not a complete list of unscrupulous methods that are relied upon by insurance companies, but it serves to illustrate some of them. Some of these arguments have legal merit in some cases, but they are also often rejected when challenged in court. If the insurance adjustor asserts one or more of these types of defenses, your best recourse to have that defense reviewed by an attorney. Insurance companies like to complain about insurance fraud committed by people who only pretend to be injured. Such things certainly do happen. However, in 21 years of practicing law in Alaska, I have never seen a clear cut case of fraud of that type; while I have seen many cases where an insurance company wrongfully refused to provide coverage on substantial, legitimate losses suffered by a policy holder. In my experience, insurance companies are perpetrators far more often than they are victims. If you suffer a loss or injury that is potentially covered by one or more insurance policies, or if you cause a loss or injury to someone else, you should promptly give written notice to all insurance companies that are potentially responsible for covering the claim. Don’t assume that you know what policies do or do not provide coverage for the claim. Give notice to your homeowners insurance company, your automobile insurance company, your health insurance company, the other driver’s auto and home insurance companies, your worker’s compensation carrier, etc. It does not hurt to give notice, and might prevent a loss of coverage which otherwise would be available. If you need to negotiate with an insurance company over your claim, the first rule is that you should not be in a hurry and should not let the insurance company push you into a quick settlement. Don’t sign any releases until you are ready to settle. Especially with physical injuries, it can take a substantial amount of time for some of the problems to show up. Make sure that you are medically stable, and that you know what any future medical expenses are going to be before you agree to settle with the insurance company. Make sure that you read and understand all documents before you sign them. The second rule is that this is a negotiation, and you do not need to accept the first number that is put on the table by the insurance company. They probably won’t accept your first counteroffer, unless it is very low. Some types of damages, such as pain and suffering, cannot be calculated with mathematical precision. The insurance company wants to settle for the smallest amount possible. Don’t be afraid to start somewhat high, and work down toward an acceptable number. The third rule is that even though you are an amateur going up against professionals, help is available. Many attorneys will be willing to meet with you for an hour or so, and give you their evaluation of how much your claim is worth, and whether the insurance company’s offer is in the ball park. If you still can’t settle on your own, and if the size and merits of the claim justifies it, many attorneys will also be willing to help you pursue your claim in arbitration proceedings or in court. Those legal services are usually not free, but often the assistance of an attorney will result in a higher net recovery for you even after your attorney has been paid. Of course, the information in this article is of a general nature, and is not intended to substitute for a careful professional evaluation of your individual claim by an attorney of your choice. Kevin Morford is a political activist and an attorney in private practice in the Anchorage area. He can be reached at kmorford@insurgent49.com. |
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2005
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Reserved. in-sur-gent (in sur'jent), n. 1. a member of a group which revolts against the policies of its leadership. |
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