insurance claim denied

I filed a claim and the Insurance company didn’t Cover it

I keep meeting people that have no idea what or who is covered on their insurance policy – and insurance agents that know a bit about insurance but have high quotas to meet and don’t concern themselves with learning about the insurance products they sell.

I am saying all the above to say; when a person/agent is in a rush to sell you a policy just to reach a quota, a coverage-gap door opens – especially if your situation or coverage needs differ from what they routinely quote or write.

Because the lack of insurance coverage or gaps in insurance coverage can cause total devastation in the case of an uncovered loss, I find it disturbing the number of agents I come across that are just “selling policies” and are also unconcerned with the end result to the client.

I also find it disturbing that most policy holders have no idea what their coverage is.  And many of them are unable to tell you the name of their agent off the top of their heads.  I hear a lot of “I filed a claim and the insurance company didn’t want to cover it”.  And I hear even more of the following:

Client:

  • I’m paying to much for my insurance
  • I don’t need all those extra’s (water backup, law and ordinance, service line coverage, towing, glass coverage, uninsured motorist)
  • No, I don’t have a (enter, vicious dog breed name) – when they do have that dog
  • No, I don’t have a trampoline, or pool – when they do have the pool or trampoline
  • I’m looking for cheaper insurance
  • (insert family member name here) doesn’t drive that car “exclude them” – when they do drive that car
  • I’m single (when they are married because they want to exclude their spouse hoping for a lower premium on car insurance because their spouse has a bad driving record)

Agent:

  • I’ll save you money on your insurance
  • You really don’t need that
  • Don’t worry about that
  • I’m so sorry for your loss, “remember you asked me to remove that so we could keep the rate low?”
  • We can lower your liability limits and/or raise your deductible

I’ve heard agents sell policy holders comp/collision (physical damage coverage) on a salvage title vehicle with a company that didn’t offer comp/coll coverage on salvage title vehicles.  How does this happen?  The underwriting companies system’s don’t always detect salvage or rebuilt titles and you didn’t tell your agent it was a salvaged or rebuilt title, or your agent didn’t ask, so they ran your quote with a clean title, then added comp/collision coverage that wasn’t applicable to a salvaged or rebuilt title.  Now you think you have coverage that you don’t, and so does your agent.

A lot of people don’t know what a salvaged or rebuilt title is and many people buy them unaware that most insurance companies wont cover them with comprehensive and collision damage coverage.  Its especially bad when they purchase a newer vehicle with a rebuilt title and cannot get physical damage coverage.

People actually believe the state minimum liability limits on a personal auto insurance policy in Ohio $25,000/50,0000 is sufficient coverage on a personal auto policy.  And, it could be sufficient coverage, unless the accident is serious or involves multiple vehicles.  My last accident cost my insurance company $90,000.  If I had state limits, I would have lost everything because I was sued.  The other party did not want to sue me. Their insurance company sued mine.  Now just imagine if I only had up to $50,000 in coverage when the lawsuit came up to $90,000,

So, why wasn’t your claim paid when you had an insurance policy in place?  Well, this is typically what happens when a claim is NOT paid; the insurance coverage was not on the policy!  Insurance companies legally have to honor the contracts they agree to and insurance policies are contracts. Your insurance policy is a contract that you and your insurance company agree to.  If you decide or elect to remove or not purchase coverage that leads to a claim,  Guess what?  It will not be paid.

If you will not take the time to find out whats in your policy and you leave out coverage that leads to a claim, guess what?  It will not be paid.  If your insurance agent makes a mistake on your policy and leaves out coverage you asked them to put in, they can be sued by you and they have coverage to protect them called Errors and Omissions coverage.

If you don’t know your agent, they don’t know their products, you leave out important information that the agent needs to know to offer you the best and most comprehensive coverage (that pool, dog, family member/driver), you could wind up screwed in the event of a claim.

How can you protect yourself:

  • Work with an agent that has time for you and is willing to go over your coverage with you
  • Ask questions about and know what and who your policy protects
  • If you are trying to protect your assets from loss, don’t treat your insurance like a “used car bargaining deal”
  • Disclose everything so that, in the event of a claim, your claim cannot legally be denied
  • Let your agent know, If something in your situation changes; new roof, new dog, new pool, added a bathroom to your home, changed vehicles, someone moved in or out of your primary residence that needs to be added to your policy, business added a new piece of equipment, etc.
  • If you have multiple assets or an expensive home, expensive auto’s, or a business, purchase an umbrella policy in addition to your home and auto policy (they aren’t expensive and they are worth it).
  • Use a licensed and insured contractor (rather than unlicensed Uncle Bob) for upgrades to your home
  • Choose me as your agent (Ok, that was a joke, but I thought I’d throw it in there).

Insurance is meant to protect your assets and protect you, and your family or whoever is listed on your policy in the event of a covered loss.  However, the language for that protection has to be in your contract “insurance policy” in order for that contract to be enforceable.  Make sure you protect yourself by taking your coverage seriously and make sure your agent is just as interested in your coverage as your premium.

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