By Mark Goldwich
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There’s an old saying about “not seeing the forest for the trees.” This basically means even though something is right in front of you, you may not be able to see it. I think it is more about not recognizing what is in front of you, because you either aren't focused on it, or you're more focused on something else. And when you don’t recognize something that's right in front of you, it's easy to overlook. It happens to us all from time to time.
When it comes to insurance, here’s what people typically overlook: Insurance companies are businesses. You may say, “That is so obvious, everybody knows that.” And on the surface, this is true. But do you know what it really means – how that fact is actually going to affect your life when you have to file a claim?
If you’ve ever tried to collect on a claim after a major disaster such as a fire, flood, or hurricane, you probably do know what it really means when I say that the insurance company is a business, first and foremost. On the other hand, if you have not yet had this experience, or are just beginning the process of filing a clain, then this blog should definitely be considered “required reading” for you.
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For instance: You may think, because you pay insurance companies to protect you against risks, that you are the “customer” or “client” of the insurance company. While this may be technically true, this attitude can be a big mistake. Even if know your insurance agent well, consider your agent a friend, and even socialize with him or her, when it comes down to it, your friendly agent and your insurance company are two different entities entirely, and as such, they may view you completely differently.
If you think of yourself as the “customer” or “client,” you will expect certain principles of “customer service” to guide the relationship after an unexpected event affects your property. You will also expect the insurance company to be accountable to you in a way that’s roughly similar to the way a furniture store is responsible for delivering furniture in a timely fashion. I hate to be the bearer of bad news, but if you think that way, as most people do, you will almost certainly be disappointed.
As someone with nearly 30 years of experience as an insurance adjuster, working on both
company side and the insurance consumer side, I’m here to tell you a hard
truth. You may want to be treated as a
“customer”, and you may want
the insurance company to be accountable – to fulfill its obligations to you
without you having to do much beyond routine paperwork. It doesn’t
necessarily work out like that.
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Often, you are simply regarded as the next in a very long line of people who are trying to take more from the insurance company than you deserve. The working assumption is likely to be that your claim is not fully justified, even when it is. Rather than viewing yourself as a customer, I want to suggest that you may be better served by thinking of the insurance company as your legal adversary.
Why do I say that? It’s really not simply because I represent people who have claims against insurance companies. It’s because that's how insurance companies tend to treat the people they cover: as one would treat a legal adversary. And if you ever had to face one of your insurance company’s attorneys, you certainly know this to be true.
Consider the case of a Superstorm Sandy victim that aired on “60 Minutes” recently. In this case, a homeowner discovered that his insurance company altered the report of an
engineering firm the insurance company sent out. Instead of saying “structural damaged” as the engineer wrote, the report was altered to say “no structural
damage” in the final version. As you can imagine, this simple word change meant
the insurance company would be spared from having to pay many tens of thousands
of dollars more for each claim like this (if you multiply that by thousands of
claims, you begin to see what the motivation is). When the homeowner saw the
original draft report he took a photo of it with his phone. There it was, proof
the insurance company was trying to defraud him. Well, in court, the insurance
company’s attorney actually suggested it was the homeowner that was trying to
commit fraud; and that by taking a photo of the report, he was “stealing” it.
You see, insurance companies view reports like this to be “work product” – in
other words, they own the report.
I myself handled a claim for a woman whose car was stolen and then dumped into a canal. The car was fairly new, and not causing her any problems. Still, the insurance company suspected she may have had the car taken and dumped in order to collect the insurance money so she could get a newer car. As a result, they refused to pay her anything. Why? They came up with 2 reasons.
- They said cellphone records showed a “ping” on a cell tower “near” the area where the car was located on the night the car went missing. (This statement alluded that she got a call from her boyfriend to pick her up and drive him back home after “the deed was done."),
- They said her taking out “Gap Insurance” was suspicious. That’s right, buying insurance to cover the depreciation gap – the stated purpose of the insurance – is suspicious to the insurance company. Not when it is being sold and the premium is collected, mind you, but just when you try to collect on it. Happy ending though, we got her paid (without having to involve attorneys).
There are dozens, if not hundreds, of equally shameful examples on-line of insurance company lawyers going after customers by using inexcusable tactics to get the desired results. Feel free to take a few minutes (or hours) to search this for yourself online, but be prepared to be overwhelmed.
Don’t overlook the obvious, insurance companies are businesses. They are here to make money – correction – they are here to make a profit. You see, they make money when you pay your premium, and then they make more money by investing the premium money you pay. That’s their profit. When they pay your claim, however; odds are they are paying you more than the premiums you have paid, which means they are paying you with money that was supposed to be their profit. You might imagine they don’t like that much. And in that case, you’d be displaying a remarkable clarity for the obvious.
Mark Goldwich is president of Gold Star Adjusters, a group of public insurance adjusters dedicated to helping citizens get the maximum settlement for any insurance claim.