How insurance companies try to deny or not pay you full value for your claim and what you can do about it.
You have paid your insurance coverage premiums on time for years without a claim. Now you experience some type of loss and are confident the insurance company will pay you the value of your claim immediately. The insurance company agent assured you were fully covered for this particular peril when you purchased the policy.
Reality versus your assumptions may be about to set in. You have reported your claim and have provided all the requested details to your insurer. You wait patiently for confirmation of coverage and the payment of your documented loss. Sadly, you may receive a letter denying your claim rather than the check that you had expected or you may receive an offer of payment that is only a fraction of the value of your claim.
Many of the insurance giants deny claims or offer meager settlement proposals in an effort to become more profitable. Insurance company claim's adjusters find creative reasons to deny valid claims or to offer low settlement amounts. Common reasons for denial include paperwork errors, assumption of facts contrary to the findings of witnesses and expiration of time periods for the submission of documents. Common reasons for low settlement offers include claims of contested liability and the adjuster not taking in to account all of the relevant facts to properly make a fair valuation of the claim.
Insurance companies have two major reasons to delay reasonable payment of claims. The first is, if the settlement is delayed long enough, there is a chance the injured party may become in great need of the funds and suffer some type of economic duress thereby making an otherwise unacceptable offer something they are forced to take. The second reason is the longer the insurer delays in making payment, the more time the insurance company has to hold onto premiums and earn money on their investments.
Not only do insurance companies delay making reasonable offers and payments, they also attempt to delay court proceedings once the case is put into suit. The insurer hopes the net result will be you give up in continuing the fight due to the stress and aggravation and settle your claim for less than full value.
There are certain ways of expediting the payment of your claim and/or getting a reasonable settlement offer:
Read your policy thoroughly and be sure you understand what you are entitled to receive;
Involve a lawyer as soon as practicable;
Fill out forms carefully. An honest mistake can be used by the insurance company to delay or deny your claim;
Write letters or send emails rather than make phone calls to the insurer. Everything you communicate to your carrier needs to be on paper as proof if you have to later document your dispute;
If the insurance company sends you a check for premium refunds because they are canceling your insurance, do NOT cash the check. If you do, this may be seen as agreement with the insurer's decision;
Do not give up. Perseverance may win the day even if it takes a long time;
and
Involve the State of Connecticut's Insurance Commissioner's office if the problem warrants it as there are statutes that prohibit Unfair Insurance Practices and Unfair Trade Practices.
If your insurance company is unfairly utilizing the "deny, delay and defend" strategy against you, it is strongly recommended you contact an experienced insurance attorney to protect your rights at the earliest possible moment.
