The Insurance Claim Game

If you've never had to file an insurance claim, consider yourself lucky - in more ways than one. While it's terrific that you haven't suffered a loss significant enough to file a claim, you're also lucky not to have had to suffer through the insurance claim game.

How do you play the insurance claim game? Let's just say that there's more involved than tossing the dice, crossing Go and collecting $200. While the object of most games is to win, this game starts with a loss. It doesn't matter what the loss is; it could be a crunched car, burned down house, theft of valuables, water damaged carpets and cabinetry, a blown off roof, or any number of damages. Whatever the loss, that's the hand you're dealt.

Each different loss type has its own related hassles. This makes the game more challenging! Let's say that your house has been flooded thanks to a burst pipe in the walls. Not only do you have a loss, you have a major mess and the potential for further damage (such as mold growth if the home is not dried out within 72 hours). The clock is ticking. Isn't this fun?

But we're just getting started. You also have safety hazards to deal with, emergency repairs to make, insurance paperwork to file, water damage professionals to hire, and temporary lodging to find.

Now, your opponent takes a turn. Who's the other player in this game? Your insurance company and, yes, they are playing against you. At stake is potentially tens of thousands of dollars and this isn't Monopoly money we're talking about. This is real U.S. Treasury currency.

You've paid your premiums and you are entitled to a fair settlement. However, the insurance company is a business that must minimize losses in order to be profitable. This includes minimizing YOUR loss.

Insurance companies often have contracts with "preferred" vendors who have agreed to pre-determined rates in order to earn their business. One of the first moves any insurance company makes is to steer you to their preferred vendors.

Your turn. While using the insurance company's recommended contractor may be fine if you don't have a preference and are unsure of whom to call for repairs, you are under no obligation to follow their recommendation. Most states allow "customer choice," meaning you can pick your own contractor for repairs; in this case, a water damage restoration company.

Your opponent's turn. Your insurance company is on the offense and will send an adjuster to your home to estimate the damage. This adjuster is friendly and likeable. However, he is a company representative that needs to minimize losses. He may overlook those warped baseboards or suggest a coat of paint rather than complete drywall removal. In addition, he won't necessarily prompt you to list all damaged personal belongings.

Your turn. Because your opponent is on the offense, you must put up a strong defense. Start by having either your contractor or a public insurance adjuster (an insurance adjuster that represents you) present when the adjuster arrives. By having a professional on your side, less obvious damage won't get overlooked or underestimated. In addition, have a complete inventory on hand documenting ALL damaged items, big and small. This ensures that nothing is overlooked.

The game continues with your opponent throwing mountains of paperwork your way, claim denials, low-ball settlement offers, unnecessary delays, and other tricks from their play book. If you play your cards right, you'll work out a fair settlement offer, hire a reputable contractor for repairs, replace your damaged items, and restore your home to its previous condition.

If you must play the insurance claim game, remember that your insurance company has a huge home field advantage because the company plays the insurance claim game day in, day out. You only play it a few times in your lifetime - if you're lucky.