Have insurance companies lost their shirts this last decade in payouts from hurricanes, terrorist attacks, wild fires and tornados? Not necessarily, but such events have made it easier for insurance companies to rationalize denying homeowner claims and drop customers they can reasonably predict will file a claim. So, what should you do if you are dropped from your homeowner insurance policy, either because of claims filed, or because the company is simply moving out of the area?
Don't panic. You won't go uninsured. Depending on the state or type of mortgage you might have, you simply can't go uninsured. There are devices in place to help you get coverage, no matter what. If you receive notice that you are being dropped, you have a window of time before that goes into effect; just be sure to use that time wisely and shop around.
On that same notice, the insurance company is required to state the specific reason you are being dropped. If the company is moving out of the area (either physical or coverage), then you should have little trouble finding another company to cover you. Check with your state insurance department for referrals to other companies—keep in mind that this is a great opportunity for you to get the exact homeowner insurance and home contents insurance you need. In other words, be sure to shop around.
Due to disasters in recent years, the Federal Emergency Management Agency, or FEMA, has provided supplemental flood insurance to homeowners finding themselves in areas at high-risk for floods. As areas continue to develop residential housing, so do flood plains and definitions of "high-risk" areas. Your home might have shifted to a high-risk area without you even being aware of it, due to factors such as a rise in impervious ground cover. If you're in this boat, you can access FEMA's National Flood Insurance Program at www.floodsmart.gov or through FEMA itself.
If, on the other hand, the reason listed on the cancellation notice has to do with claims previously filed, make whatever efforts necessary to resolve your standing in the eyes of the industry. You don't necessarily have to have your roof wholly replaced by the time you start shopping for a new policy, but a documented good faith effort to reconcile the reasons against you will go far in the eyes of your new insurance provider. Also make sure to take a look at your Comprehensive Loss Underwriting Exchange (CLUE) score, which is like a credit score for your insurance history, and dispute anything on it you might find falsely claimed. (You can do so for free, once every 12 months, at www.choicetrust.com.)
You might find yourself blacklisted for the number of claims you've filed over the years, or because you live in a high-risk area. Again, realize that individual states have agencies in place to help out. Several states participate in a program called FAIR, or Fair Access to Insurance Requirements, to cover those in the high-risk pool. Check with your state insurance regulatory department to find out whether you live in one of the FAIR states. If it's not a FAIR state, it might have another similar policy that will cover you until you leave the high-risk pool. Just put the time into due diligence and you won't be left stranded without homeowner insurance.
1.Don't take their word for what is covered and not covered: A lot of the time claims handlers have never even read the policy. The company just tells them how to pay claims ... and it isn't necessarily right, either. If the policy isn't quite clear about something, the law requires that it be interpreted in your favor. What counts is what it says, not what somebody else is telling you it means.
2.You don't have to give up rights to get your rights: It is unethical, and in most states illegal, for insurance companies to gain leverage over you by refusing to pay that part of your claim that is clear and undisputed, until you agree to take less money on some other part of your claim that the company disputes. But it works so well that some companies do it all the time. It is called "holding the money hostage" until the policyholder pays the ransom.
3.Don't get in a rush. Insurance companies have statistics showing that if they can get you to settle quick, it costs them less. This routine works especially well for them, because fast settlements are packaged as good customer service. But the companies know that many injuries take several days after an accident to even show up, and much longer than that before anyone knows if they are going to last very long or not. The companies also know that if they can't get you to settle quick and cheap, slowing things way down is the next best way to get you to take less. State Farm used to have a Power Point presentation for claim handlers. It said "Money is Power." When you have the power, use it. When you don't, delay! Studies show that patience and going slow maximizes negotiating results. Getting in a rush dramatically reduces negotiating results.
4.Don't put off going to the doctor: If you think you might be injured, the company or its lawyers will use your delay as evidence to suggest there was nothing wrong with you, and you only went later because you decided to bring a claim and collect money.
5.Be reasonable and fair-minded with everyone: At every step in the process, and with everyone you encounter from policeman to doctor, be reasonable, honest, fair-minded and cooperative. Your insurance company is bound by law to be fair with you, and you will be in the best possible position if you "play fair," too. If they decide not to play fair, you will do a lot better if it is clear who has the white hat and who has the black hat.
6.Be responsive and timely: You want your insurance company to be responsive and timely, so do the same thing for them. If you don't, you are giving the company excuses they can later use against you.
7.Courtesy counts: If you need to vent some anger over the situation, do it with your family or friends. If you write a nasty, sarcastic letter to the insurance company, it won't hurt you-as long as you don't mail it. Courtesy and old-fashioned manners really do go a long way to smooth things out, so be polite, even (or especially) when you don't feel like it.
8.Honesty is not the best policy, it's the only policy: It's the right thing to do, and the truth is always more believable anyway. Embellishing the story almost always hurts you.
9.Understand When and How to Get Legal advice: Talking to an attorney is not the right move in every case, but sometimes you need advice: Allstate has statistics showing that on the average it pays 5 times as much money per claim to people who have legal representation, compared with those who don't. Because of those very statistics, Allstate created scripts for its adjusters use in persuading people not to go to lawyers. But you can make bad mistakes in choosing lawyers too. That subject is discussed in another article.
Both Jim Waltrip & Alex Gwen Thomson are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Jim Waltrip has sinced written about articles on various topics from Health Insurance, Auto Insurance and Liability Insurance. US Insurance Online CEO Jim Waltrip is a self-taught software developer and entrepreneur with a passion for building things: teams of employees, software, and new systems. Jim started the company with business partner Ryan Patterson in May 2005. The recen. Jim Waltrip's top article generates over 12100 views. to your Favourites.
Alex Gwen Thomson has sinced written about articles on various topics from Home Management, Income Tax Return and Wrinkles. About The AuthorWhen the insurance companies refuse to give you what you paid for - Abourezk Law will be there. Our lawyers that handle will help ma. Alex Gwen Thomson's top article generates over 673000 views. to your Favourites.