First Call Blog

Mistake 4: Failing to Take Control of Your Claim


Have you seen those insurance commercials where a kindly insurance adjuster is at the scene of a disaster, immediately cutting a generous check to the devastated homeowner? If you have, and that's what you think happens, I'm sorry to tell you it's not quite like that.Hit-in-head-by-2x4 Imagine you've been hit by a car. You miraculously survive and desperately need medical attention. The paramedics arrive — O happy day! After a brief examination, they inform you they really want to help — and they absolutely will ... as soon as you complete a tiny little 5K. (Full disclosure: It's going to turn into an Ironman triathlon.) On your mark, get set, go! You find yourself jogging. "Don't worry," they assure you. "We'll be right beside you every step of the way." And they will ... thwacking you in the head with a 2-by-4. That gives you an idea of what it's like settling with an insurance company after a house fire. - Alison Hodgson, Houzz
After disaster strikes, life becomes about survival. Survival of your family, your finances, your business, or your sanity. Unless you’re Martha Stewart, organization and control over the claim may not be at the top of your priority list. However, maintaining control of your claim and what happens to your property after a loss is absolutely essential to making it through the storm and ensuring you have a successful settlement that will allow you to recover as fully as possible. Here are just a few tips, suggestions, and resources to help you in this process:
  1. Stay organized. Document everything. Create a file or binder specifically for all claim communications, vendor contracts, etc… Document phone calls and conversations with adjusters and whenever possible, get it in writing! Create a paper trail by sending follow up emails or letters confirming communications. Just remember that it goes both ways so avoid saying or writing things that are uncooperative.
  2. Control the mitigation immediately after the loss. Do not throw anything away, and secure your property to prevent further damage. Your instincts may be to clean everything up, remove debris and to begin rebuilding right away, but this can severely limit the amount of money you will be able to recover for your loss. See What to do After a Loss.
  3. Vendors: Contractors, Restoration, etc… Obtain at least 3 quotes. Know that you DO NOT have to use the vendors recommended by your insurance company. Do not let your vendors pack out your home, throw things away, or clean items without your approval. See Using Vendors After a Loss and also, Questions to Ask a Contractor.
  4. Take inventory. For a disaster (especially in a home) inventory can be one of the most time consuming and tedious parts of an insurance claim. Take control of your inventory BEFORE disaster strikes. Here are two helpful tools to assist you along the way:
  5. Living Conditions (ALE) – Ask for an advance to purchase necessities. Document everything! Keep all receipts. See Additional Living Expenses.
  6. Know the chain of command at your insurance company. Each person you deal with at an insurance company has an upper limit of dollar authority to settle your claim. As you go up the chain of command, that limit gets higher: Adjusters typically have the lowest settlement offer authority limit; Home Office executives have the highest. Claims departments are often structured as follows: 1. Adjuster 2. Supervisor 3. Unit Manager, over several supervisors by line of business 4. Assistant Manager, over Unit Managers, but not in all offices 5. Claims Manager or Claims Vice President, in charge of local office 6. Regional Claims Vice President, in charge of several offices in a region 7. Home Office Claims: At the home office, there are several levels:      a. Field Management – Senior VP in charge of regional managers      b. Technical Management – Vice Presidents in charge of lines of business, such as auto, general liability, property      c. Major Claims – Such as asbestos, lead paint, claims with long occurrence-type exposures, large and complex claims. (Large being over $750,000.00)  When communicating with your insurance company, start with the adjuster and contact superiors as necessary. What motivates an insurer to resolve an issue is a focused complaint that causes people above the adjuster to pay attention. The higher up you go within the insurance company's claim department, the greater your chances of success in resolving your complaints.  When you raise a concern over how your claim is being handled or how much you are still owed, documentation is everything. If you write to an adjuster, send a copy to his or her supervisor and request a written response in a set time frame (e.g. "Please reply within 10 business days from the date on this letter"). When you send a letter that asks for a response by a certain date, make sure you send it via certified mail so you have proof of the date you mailed it. Follow up with a phone call to confirm that your letter was received. If there is an issue over coverage or procedure, ask your insurer to point you to the specific part of the policy that explains it.  Your letters should not be threatening or lengthy. They should be clear, polite and to the point. It should confirm how cooperative you have been and continue to be. Be the good guy and put the ball in their court. If you are nasty, your next contact may be from a lawyer for the insurer which may block you from continuing to work with the adjuster. Referenced from How to Communicate with Your Insurance Company
  7. It’s not over until you say so. Don’t sign the release until you are positive you have received all that is owed to you. Be aware that sometimes insurance companies will add release language to a check such as “acceptance of this payment will close your claim.” Cross out the language, initial next to it and send a letter back to the insurance company thanking them for the payment, but asserting that you do not consider the claim to be closed.
  8. Want an expert in controlling claims by your side? Hire a public adjuster…See Ten Tips for Choosing a Public Adjuster and Six Red Flags to Watch for When Hiring a Public Adjuster