Common Misconceptions When Working with an Insurance Carrier
Turn on the TV any given day and you are bound to see an advertisement from one of the major insurance carriers promising low rates and great coverage. While insurance carriers often deliver on their sweet sounding TV promises, the experience can depart from most people’s expectations.
If you are involved in a property claim, negotiating a new policy, or considering switching carriers, it’s important to understand how an insurance carrier approaches a claim. Here are some common misconceptions when working with an insurance carrier.
For more on who handles insurance claims, check out: “Who Handles an Insurance Claim?”
1) “The insurance company has my interests in mind.”
When you sign up for a homeowners insurance policy, you are not paying for an insurance company to look out for you—you are entering into a contract with them. Because of this, their behavior is oriented toward protecting their own interest and governed by their contractual obligations. Despite some of the ‘feel-good’ catchphrases you will hear in their marketing materials, insurance companies can’t be trusted to fulfill their end of the bargain without guidance.
Telos Thought: Filing a claim on your own leaves you without an advocate while the insurance carrier holds all the cards. Using a public adjuster is the best way to have a party involved that is knowledgeable about the insurance process and has your interests in mind.
2) “My agent will take care of me.”
Until filing a claim, a policyholder’s interactions with the insurance company are often via an insurance agent. The agent is adept at setting up, renewing, and answering questions about your policy and potential coverage, but they do not interact with claims on a policy. The insurance company assigns an adjuster to be the primary handler of your insurance claim, and the agent is not able to directly affect claim outcomes.
Telos Thought: An agent can be a solid advocate for the homeowner, but does not make coverage decisions or materially affect a claim outcome. It’s best to keep them out of the claim proceedings until needed. An agent can try to advocate for the policyholder, but they don’t have the ability to adjust your claim or fulfill the promises made by the policy they sold you. Hiring a public adjuster takes the burden off of you to navigate the claims process yourself and ensures the best chance at a fair claim settlement.
3) “I thought the insurance company agreed to cover it?”
While insurance companies often agree that there was a loss, and even agree to “cover it,” there may still be a dispute over the true cost of repair or replacement. For example, the insurance company may agree that your ceiling has a leak, and that the effects of the leak are covered under the policy. They may pay for a small patch of drywall—but this patch may not reflect the true cost to fully restore the damaged ceiling, like laying ground cover, setting up scaffolding, and painting over the new patch,or even replacing additional drywall if it is necessary.
Telos Thought: A public adjuster ensures the full scope of the loss is covered and matched with the correct pricing for the work to be completed appropriately.
4) “I can file my claim whenever I want.”
Sort of, but not really. Every homeowners policy has a section called “Duties after a loss”—this requires that homeowners alert the insurance company promptly whenever the property suffers damage covered by the policy. So even if your roof, for example, hasn’t collapsed, it’s best to either report the present damages, or resolve the damages yourself. Most policies have an absolute limit on when you can claim damages, which is typically up to 1-2 years after the loss.
Telos Thought: A public adjuster can review a loss and advise whether a claim is reasonable. A public adjuster also ensures the claimant fulfills their post-loss duties in the claim.
5) “If I make a claim, my insurance has to pay it.”
We wish this were true, but insurance companies actually require, under the terms of the policy, that you “prove the loss”—meaning it's not enough to tell them that something happened, but it is up to the policyholder to present evidence of the cause and scope of damage. The insurance company can present multiple reasons why they are not liable for the damage, and it's important to be able to respond to their requests for more information.
Telos Thought: A public adjuster provides an assessment, report, and estimate in order to prove the loss. If your claim is denied or undervalued, they are your best advocate to obtain proper coverage.
If you find yourself considering a claim, in the midst of a claim, or unsure about your property coverages; consider signing up for a free policy review or a Claim Consult with one of our senior adjusters.
