Before You Make That Call To Your Homeowners Insurance Company, Read This.
If you have had something bad happen to your home, you may be tempted to immediately call the insurance company. It’s something constructive to do to help calm you down and feel less like a helpless victim and you likely know there are filing deadlines you need to meet.
But don’t be so quick to do that. Here’s why:
You Probably Don’t Really Know What You Are Doing
Most people today have some form of insurance. It is a necessary evil. There are many things you can’t do if you don’t have some kind of insurance, such as drive a car or have a mortgage on a house.
It’s a very normal thing and it seems familiar enough, but the reality is that most people know far less about insurance than they think they do. Some people pay premiums for years without ever filing a claim and, when it comes time to file, they have no idea what matters most.
Insurance is a complicated industry and subjected to regulation at both the federal and state levels. This means that you can buy the same policy from the same company as your cousin who lives in another state and the policy will be applied differently due to differences in state laws and regulations.
So, while you may think you have some idea what you are doing, you may have no idea at all. And you should probably first get assistance from someone who is actually on your side.
What? Isn’t The Insurance Company On My Side?
Yes, we’ve all seen those commercials where insurance companies promise to be there for you in your time of need. That’s a clever marketing ploy. It’s not reality.
If you think your insurance company is some deeply caring organization that will help you out in your time of need because they care so much, like your local church or your favorite uncle, you’ve been taken in by a marketing campaign. That’s not actually how insurance works.
Insurance is risk management. You could think of it as a form of betting. In fact, insurance began as a form of betting.
So they have a contract with you that covers specific things under specific circumstances. It is up to you to prove that you actually meet all the necessary qualifications and are due funds based on that contract.
These people are not your friends, not your buddies, not your pals. They don’t actually care about you and the insurance industry is very much a numbers game. It’s a numbers game that contains an inherent conflict of interest.
Taking Care Of You Hurts Their Profit Margin
The dirty secret of the insurance industry is that most insurance companies actively look for a reason to deny a claim. They do this because paying claims is a cost of doing business. If they are too generous, it hurts their bottom line.
Of course, if they are too stingy, it can also hurt their bottom line. They need to be generous enough to not get in trouble with regulators and not get a bad reputation that can hurt sales.
But, really, when push comes to shove, the insurance company would much rather give you a smaller check than a larger one. Ideally, they would love to never give you a dime.
So there is an inherent conflict of interest there in the way the insurance industry is designed. They are in the business of handing out money, but if they hand out too much money, then they will go bankrupt.
Coming up with legally acceptable reasons to deny a claim or pay you less is one of the ways they manage expenses. So you really need to understand that you have something of an adversarial relationship with them, much the way you would have an adversarial relationship if you were filing a legal claim in a court of law.
Note how the same words and phrases are used there for both insurance and court cases: Filing a claim. You should see that as a clue as to how to think about and relate to your insurance company.
Your Words Are Legally Binding And You Are Upset
Are you beginning to get the picture here? This is a form of legal proceeding. The last thing you want to do is speak without thinking.
If you are filing a claim on your homeowner’s insurance, you have probably just had something bad happen to you or learned something bad, such as:
- There’s been a fire.
- There’s been flooding.
- There’s been a bad storm.
- You’ve just discovered a mold issue.
You are probably upset, not thinking clearly and also don’t yet have all the pertinent information. Before you talk to your insurance company and say something that could cost you thousands of dollars, you should call a local professional whose job it is to help you remedy the damage to your home.
If you think that’s an exaggeration, stop and think about this: They record all phone calls. So anything you say to them on the phone can potentially be used against you should things go sideways and you end up taking them to court.
In fact, large insurance companies can have in-house counsel — in other words, a department full of lawyers who serve them full time — and they run a lot of things past the legal department before the letter goes out to you. This is especially true for certain kinds of letters they know from experience are a potential legal problem for them.
You should assume that talking to an insurance company is a little like talking to someone’s lawyer. You should assume they do not have your best interests at heart.
But Doesn’t A Service Professional Also Just Want My Money?
Sure, it’s a business. A service professional expects to get paid for helping you.
But, unlike the insurance company, they would like you to get as much money as possible for your insurance claim so you can pay them for their services. If they help you get the money you deserve, it’s a win for both you and them.
This means your interests and their interest is aligned. There is no inherent conflict of interest here. They are actually on your side when it comes to trying to get as much money as possible from your insurance claim.
Plus, they deal with insurance companies and insurance claims on a regular basis. This is part of their job. So they have much more experience than most people in dealing with the insurance company.
While insurance companies aren’t the good guy, a lot of the problems people have with them isn’t really due to them being intentionally bad actors either. An experienced service professional can help you successfully navigate the frustrating experience of filing a claim.
Insurance is highly regulated and bureaucratic. A lot of the frustration you run into with filing insurance claims will be because it’s a big bureaucracy with a lot of picky rules and they need things done a certain way.
Remember, they have to comply with both federal and state laws. So while you may feel they are just trying to deny you the money you are due, they may genuinely need to do it a certain way to not get in trouble with the federal government.
More Reasons To Call A Service Professional First
A service professional can help you document the damage appropriately so you will get the maximum due you. They also know where to look for hidden damage typical for the type of problem in question.
This can be worth thousands of dollars if you find it and file for it. It also can cost you thousands if you don’t realize it until it’s too late to claim it.
This is not the kind of life lesson you really want to learn the hard way. You really want to benefit from the experience of other people who do this all the time and know the ins and outs.
Call A Service Professional First. Do So Immediately!
Yes, there are filing deadlines for insurance. You want to jump on this process promptly. You don’t want to delay.
But your very first phone call should be to a service professional who will be on your side. Not only can they help you find and document all the damage, they may be able to reduce the total amount of damage involved.
You may not realize that there are things that can be done to mitigate the damage. You may think the damage is done, but that may not be true.
Maybe there is a water main that can be turned off and should be turned off. Maybe there are hot spots in the house that could potentially re-ignite and burn yet more of the structure.
Getting a knowledgeable and experienced service professional to your home promptly can be the best insurance for keeping the damage to a minimum. You also want them to begin documenting everything before anything is fixed.
If you start removing debris or repairing anything before any photos are taken, you are basically destroying evidence. This can harm your claim.
So treat it kind of like a crime scene. Don’t touch anything and make that call, not to your insurance company, but to a local service professional.
One Last Reason To Call A Professional First
There aren’t that many people that can talk to your insurance company on your behalf. You can do it. Your insurance broker can do it. Your lawyer can do it. A claims adjuster can do it.
A service professional can help you get your paperwork together before you file and discuss it with you “off the record,” so to speak. You don’t want to have to bring in help after the fact.
You don’t really want to have to call a lawyer and threaten to sue the insurance company. If the claim is not filed correctly and in a timely fashion, it’s much harder to straighten it out after something goes wrong.
Lawyers will either charge a high hourly fee or work for a high percentage of the expected payout if you are suing in a court of law. In contrast, a service professional is far cheaper and is only charging you for actually remedying the problem with your home.
The most profitable answer for you that costs you the least is to do this right from the very beginning. Remember, for most Americans, their home is their single biggest asset. Ask yourself if this is true for you.
In fact, for many Americans, the value of their house accounts for more than half of their retirement nest egg. Think about your assets. If you don’t have substantial stocks, bonds and other assets, this is probably true for you as well.
If your home is involved, your future financial security is potentially at stake. You need to take this seriously in order to make sure you come out of it okay in the long run.
Make sure your first call is the right call. Call a professional who can help you immediately deal with damage, mitigate the situation so the dollar value and hassle involved don’t continue to grow and begin documenting the full and true extent of the damage.
After you have talked with a service professional and you have some idea of what you need to do to best represent yourself in the claims process, then call your insurance company. If you have never filed before, talking to them about basic logistics, like where and how to send the info and what forms to use, can help streamline the process.
You don’t want to wait too long on filing your claim, but you don’t want to contact them prematurely either. You need to be calm and have your papers together.