Insurrance

Survive Bad Faith Insurance Companies

2008-09-20T02:46:00.000-07:00

Step1

I would first like to share that I am writing this article because it has taken my insurance carrier over a year and a half (over 1.5 yr.) to settle our claim. I realize that there will be many other people who experience a tragic loss and that they need somewhere to turn, like we did, during our tragedy.

Also, the more insureds know about the process, the more they will be able to fight against unscrupulous insurance companies.

You will need to determine if you need a public insurance adjuster. Before our loss, I had never heard of public adjusters. There are companies known as "fire chasers" that let me know that they would help with the contents portion of our claim for our loss. The fire chasers found us through a public records search (by way of contacting family members who lived in another city). The "fire chasers" came out to our hotel room (in hopes of getting us to let them conduct the repairs on our home) and spoke to us about their conducting repairs versus the insurance company's recommended vendor conducting the repairs. They shared the ins-and-outs of using our insurance company's vendor. The "fire chasers" shared credible information to consider.

I must share this information with you to provide a glimpse into the chaos that follows. Then, you will be prepared to follow the steps to survive insurance companies.

I was told that when you have a large claim not to expect a good friend to be there, not to be in good hands, and not to look for a good neighbor or friend to be on your side. Step #1, you will have to decide that for yourself.

Step2

Start a log. On your log, have a section for who you talked to, at what number, the date and time you spoke to the person, and the purpose of the call. Additionally, start a log for all expenses such as travel for things connected to fulfilling your obligation under the insurance company's policy.

Keep all receipts. You will need them for reimbursement of actual replacement cost of items purchased. Further, you will need receipts for any demands that your carrier has assessed to you.

Keep four files: one for receipts, one for your attorney, one for your adjuster, and one for communications (bids, requests, etc.).

Step3

If you have a large claim, unless you have about seven (7) or more older children to assist you, consider hiring a qualified public insurance adjuster. I have written an article on hiring public insurance adjusters.

Do not be concerned if they (public adjusters) earn $10K, $20K, or more from your claim. You will receive more money than you could have attained without their assistance.

For large claims, I cannot stress strongly enough that you need an experienced public adjuster.

Step4

Before you reached this point, you must have already been insured with the proper coverage for your additional living expenses, building, and contents of your policy for your claim. Hindsight is 20/20. However, if you are reading this article, you and all your friends, family, and co-workers should get your policy coverage resolved before a tragedy occurs.

Step5

Also, ensure that you have pictures of your belongings and download them to a site, such as Google, so that if there is a loss, your pictures will be preserved digitally. (I've learned this from 20/20 hindsight.)

Step6

But, perhaps you are like we were, not well-insured and at a loss as to how to proceed. If this is you, you'll have to start at this step (and still consider the above steps).

At the beginning of your claim, you will be given advance money. This amount will depend on your overall coverage and fairness of your insurance adjuster. It could be $1,500 to $10,000 (or more). Your insurance company's adjuster may say it is part of the contents money or additional living expenses.

You will likely need clothes, food, and a place to stay (especially if Red Cross has not been able to assist you with lodging your first few days). Purchase the minimum of what you need. In our situation, I home schooled so we lost our home and school. I had to purchase substitute curriculum which greatly reduced our initial advance check.

Step7

Here's a repeat if you started where we started after our tragedy.

Hire an experienced public insurance adjuster for large claims. I have included links below for Ohio adjusters. There should be a list for every state. We had an adjuster from one state and an attorney from another due to the circumstances of our claim.

Do not allow your insurance company to intimidate you because you hired a public insurance adjuster. Your insurance company's adjuster is there to "minimize" your claim. A public adjuster is there to "maximize" your claim. Always keep this in mind.

Step8

Seek professional services from an experienced attorney. Pay twice the retainer fee requested by the attorney. If you're up against a really big insurance company, consider putting down three times the retainer.

Although you have other expenses, it is better to have excellent representation than no representation and no money. People are very charitable, especially if you attend a church or if you are part of a social group. As long as you have clothes and food, retain a qualified attorney. Your insurance company will pay for the rest of your needs (through additional living expenses).

Step9

Do not stay with relatives (unless you do not have additional living expenses as part of your policy). Aside from ruining familial relationships, you are reducing your standard of living. Ensure that you are placed in like kind and quality lodging. Did you have a house with a two car garage? Then, your insurance company is obligated (if you have additional living expenses) to provide like kind and quality living quarters with a garage. For example, we had to ensure that we had at least three bedrooms. A two bedroom place was available through our insurance company's preferred vendor; however, through a vendor we found, there was an immediate opening for a three-bedroom unit for us. Our home had six bedrooms. Our insurance company saved placing us in the three bedroom town-home (which was a reduction in our standard of living). Our insistence was not unreasonable as our children needed separate sleeping areas due to their ages.

Step10

Stop paying utilities at the place being claimed. Have the utilities shut off. Stop paying for trash services, waste disposal services, etc. Stop paying all unnecessary bills. Did you have internet? Have the service contract delayed. For example, we had DirecTV. Our contract was placed on hold for nine (9) months. Otherwise, we would have had to pay them each month or risk ruining our credit with a negative report from them.

Step11

For any items that you do not have pictures of, or other documentation, seek affidavits from people who will go to court to support your ownership of items. Contact your banks, credit card companies, and places you shop for copies of receipts. Although I did not have a picture of my flute, I had a company send me a copy of a receipt where I purchased a book for my flute.

Remember that many banks do not have records past five (5) years.

Many of our items purchased were BK (before kids). This is natural for many parents. Over the years, it is very difficult to maintain records on items purchased BK. Ensure that you take pictures and download them to the internet.

Step12

Now that you are settled, for about six (6) months in a place covered by your additional living expenses, you can focus on compiling your contents list. Your public adjuster will not tell you how to complete the list. I did not know how to complete the contents list as well. The public adjusters will go out to the residence; however, there will be many items destroyed by fire. There is no way to expect your public adjusters to know what was burned up.

We were advised to make a list before our adjusters were permitted to go in and inventory our contents. Even though we compiled our list soon after the fire (within three months), we still think of items today that we forgot to put on the contents list.

We followed the same procedure our insurance company's adjuster used for contents. You may consider waiting for your insurance company to submit their list prior to your submitting your list.

Step13

Things may turn ugly with your carrier. They may demand a "meeting" with you or "EUO" (examination under oath). Sometimes these are tactics to intimidate you or to reduce your claim payout. Your experienced attorney will advise you on how to proceed with submitting to an EUO or a meeting. If your policy does not require you to participate in either, you will be advised not to go; however, most policies include a requirement for you to participate with assisting your insurer.

Step14

Be prepared to continue making payments - even though you should not have to - on your house (car, etc.). Some mortgage companies have foreclosed on home owners whose homes were damaged and the court has ruled against the companies for such behavior. Your attorney will best advise you on how to handle payments on destroyed property. It is possible to delay such proceedings in court when the company knows insurance payments are pending. It is a grave injustice to continue paying hundreds or thousands of dollars on destroyed property because the insurance company is failing to settle a claim. Unfortunately, if you file a suit, you will not receive further benefits. It is most likely cheaper to pay your former bills than to have to pay your bills and new expenses (because your insurer stopped payment when you filed a suit/complaint).

Step15

In our experience, our insurance company asked for similar documents numerous times. Additionally, they asked for documents that incurred a cost. We provided our insurance company with an invoice. To date, our insurance company has not paid for the documentation that they requested. (I will keep you posted on this development.) We did not believe that it was our obligation to pay for an invoice that they wanted (that they may later deny reimbursing us for).

Step16

Your claim has been submitted through your public adjuster, your attorney is standing by for meetings and an EUO. You've received some advance but you're waiting.

That's what you must keep on doing. Wait. You have to allow your insurance carrier to demonstrate bad faith. Has the company continued to file for their extensions? Has your insurance company communicated to you what they are doing and what they need from you? Has the company been volatile toward you? Did they become adversarial? Have they made unreasonable demands (such as a short notice for a meeting the day before or after Christmas)?

Document all such behavior that is adversarial to you and your family.

Step17

Either your carrier will make an offer after all their delays or they will deny your claim. Your attorney will advise you whether to file a civil case for a bad faith claim. Ask your attorney if he/she will continue on the case on contingency or retainer. If your attorney advises he/she wants to continue on retainer, they do not believe that they will win the case. Once you pay them your money, it is gone. Consider seeking another attorney or whether you want to proceed on a retainer fee basis. Sometimes a lawyer does not have confidence in winning the case so they ask for a retainer for bad faith insurance cases rather than taking the case on contingency. Take this into consideration when making your decision on how to proceed.

Step18

If you are reading this article, it is unlikely that you would elect not to pursue the money owed to you. Your professionals will present a well-documented claim and an effective representation at your meetings/EUO. This will be to your insurance company and/or the court during a bad faith civil trial.

Have patience and let your professionals work for you.

Step19

Although there have been, and continue to be, many delays with our insurance claim, it has allowed us to grieve our loss and make decisions for our future. Had our claim been resolved within two to three months, I believe that we would have made decisions that were not in our best interests.

Use your insurance company's delays to your advantage. Take time to grieve. Then, take time to plan. Always keep your "eye" focused on the goal - payment of your claim. It will come, eventually. And, when it does, you will reap the benefits you have paid for to your carrier.

Step20

Grieve your loss. In our case, we lost a deceased's heirlooms, our home, and our school. I also lost my beloved parrots that were to live over 60 years. Additionally, we have made a major move. These type of major life events must be carefully addressed to handle the "stress" in your life from these events. If you look on the list for major life stresses, our family has experienced several of them. I wish anyone (going through what we've endured) a claim process that remembers you paid your insurance premiums on time, month-after-month.

Lower Your House Insurance Bill

2008-09-20T02:44:00.000-07:00

Step1

Security. Security for you is also security for the insurance company so they are more than willing to give you a discount if you have them. Install burglar alarms, smoke detectors, carbon monoxide detectors, etc.

Step2

Combine Insurance Policies. If possible, combine various insurance needs that can be covered by one insurance company. eg: You could get a significant cost reduction if you were to insure your vehicle with the same insurance company.

Step3

Up the Deductible. Increase your deductible amount as high as you would be comfortable with. By doing so, you will be lowering your insurance bill.

Step4

Know how much coverage you require when getting house insurance that works by replacement costs in case of fire, flood, burglary, etc that may cause loss of your home's contents.

Step5

Quit smoking. Most insurance companies offer policies which offer discounts to non-smokers. Smoking is one of the leading causes of house fires.

Step6

Ask for discounts. Yes, it really can be that easy! Ask your insurance agent if there are any other discounts that you may be able to qualify for. They will be happy to share what they know.

Insurance Information

2007-11-23T02:18:00.001-08:00

Insurance Infomation
Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor us ed to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.
An entity seeking to transfer risk (an individual, corporation, or association of any type, etc.) becomes the 'insured' party once risk is assumed by an 'insurer', the insuring party, by means of a contract, called an insurance 'policy'. Generally, an insurance contract includes, at a minimum, the following elements: the parties (the insurer, the insured, the beneficiaries), the premium, the period of coverage, the particular loss event covered, the amount of coverage (i.e., the amount to be paid to the insured or beneficiary in the event of a loss), and exclusions (events not covered). An insured is thus said to be "indemnified" against the loss events covered in the policy.
When insured parties experience a loss for a specified peril, the coverage entitles the policyholder to make a 'claim' against the insurer for the covered amount of loss as specified by the policy. The fee paid by the insured to the insurer for assuming the risk is called the 'premium'. Insurance premiums from many insureds are used to fund accounts reserved for later payment of claims—in theory for a relatively few claimants—and for overhead costs. So long as an insurer maintains adequate funds set aside for anticipated losses (i.e., reserves), the remaining margin is an insurer's profit.

Insurance Policy

2007-11-23T02:17:00.003-08:00

Insurance Policy
An operational definition of insurance is that it is
the benefit provided by a particular kind of indemnity contract, called an insurance policy;
that is issued by one of several kinds of legal entities (stock company, mutual company, reciprocal, or Lloyd's syndicate, for example), any of which may be called an insurer;
in which the insurer promises to pay on behalf of or to indemnify another party, called a policyholder or insured;
that protects the insured against loss caused by those perils subject to the indemnity in exchange for consideration known as an insurance premium.
In recent years this kind of operational definition proved inadequate as a result of contracts that had the form but not the substance of insurance. The essence of insurance is the transfer of risk from the insured to one or more insurers. How much risk a contract actually transfers proved to be at the heart of the controversy.
This issue arose most clearly in reinsurance, where the use of Financial Reinsurance to reengineer insurer balance sheets under US GAAP became fashionable during the 1980s. The accounting profession raised serious concerns about the use of reinsurance in which little if any actual risk was transferred, and went on to address the issue in FAS 113, cited above. While on its face, FAS 113 is limited to accounting for reinsurance transactions, the guidance it contains is generally conceded to be equally applicable to US GAAP accounting for insurance transactions executed by commercial enterprises.

Insurance Risk

2007-11-23T02:17:00.001-08:00

Insurance Risk
An insurance policy should not contain provisions that allow one side or the other to unilaterally void the contract in exchange for benefit. Provisions that void the contract for failure to perform or for fraud or material misrepresentation are ordinary and acceptable.
The policy should have a term of not more than about three years. This is not a hard and fast rule. Contracts of over five years duration are classified as ‘long-term,’ which can impact the accounting treatment, and can obviously introduce the possibility that over the entire term of the contract, no actual risk will transfer. The coverage provided by the contract need not cease at the end of the term (e.g., the contract can cover occurrences as opposed to claims made or claims paid).
The contract should be considered to include any other agreements, written or oral, that confer rights, create obligations, or create benefits on the part of either or both parties. Ideally, the contract should contain an ‘Entire Agreement’ clause that assures there are no undisclosed written or oral side agreements that confer rights, create obligations, or create benefits on the part of either or both parties. If such rights, obligations or benefits exist, they must be factored into the tests of reasonableness and significance.
The contract should not contain arbitrary limitations on timing of payments. Provisions that assure both parties of time to properly present and consider claims are acceptable provided they are commercially reasonable and customary.
Provisions that expressly create actual or notional accounts that accrue actual or notional interest suggest that the contract contains, in fact, a deposit.
Provisions for additional or return premium do not, in and of themselves, render a contract something other than insurance. However, it should be unlikely that either a return or additional premium provision be triggered, and neither party should have discretion regarding the timing of such triggering.
All of the events that would give rise to claims under the contract cannot have materialized prior to the inception of the contract. If this "all events" test is not met, then the contract is considered to be a retroactive contract, for which the accounting treatment becomes complex.

Insurance History

2007-11-23T02:15:00.002-08:00

Insurance History
In some sense we can say that insurance appears simultaneously with the appearance of human society. We know of two types of economies in human societies: money economies (with markets, money, financial instruments and so on) and non-money or natural economies (without money, markets, financial instruments and so on). The second type is a more ancient form than the first. In such an ec onomy and community, we can see insurance in the form of people helping each other. For example, if a house burns down, the members of the community help build a new one. Should the same thing happen to one's neighbor, the other neighbors must help. Otherwise, neighbors will not receive help in the future. This type of insurance has survived to the present day in some countries where modern money economy with its financial instruments is not widespread (for example countries in the territory of the former Soviet Union).
Turning to insurance in the modern sense (i.e., insurance in a modern money economy, in which insurance is part of the financial sphere), early methods of transferring or distributing risk were practiced by Chinese and Babylonian traders as long ago as the 3rd and 2nd millennia BC, respectively. Chinese merchants traveling treacherous river rapids would redistribute their wares across many vessels to limit the loss due to any single vessel's capsizing. The Babylonians developed a system which was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender's guarantee to cancel the loan should the shipment be stolen.
Achaemenian monarchs were the first to insure their people and made it official by registering the insuring process in governmental notary offices. The insurance tradition was performed each year in Norouz (beginning of the Iranian New Year); the heads of different ethnic groups as well as others willing to take part, presented gifts to the monarch. The most important gift was presented during a special ceremony. When a gift was worth more than 10,000 Derrik (Achaemenian gold coin weighing 8.35-8.42) the issue was registered in a special office. This was advantageous to those who presented such special gifts. For others, the presents were fairly assessed by the confidants of the court. Then the assessment was registered in special offices.
The purpose of registering was that whenever the person who presented the gift registered by the court was in trouble, the monarch and the court would help him. Jahez, a historian and writer, writes in one of his books on ancient Iran: "[W]henever the owner of the present is in trouble or wants to construct a building, set up a feast, have his children married, etc. the one in charge of this in the court would check the registration. If the registered amount exceeded 10,000 Derrik, he or she would receive an amount of twice as much."
A thousand years later, the inhabitants of Rhodes invented the concept of the 'general average'. Merchants whose goods were being shipped together would pay a proportionally divided premium which would be used to reimburse any merchant whose goods were jettisoned during storm or sinkage.
The Greeks and Romans introduced the origins of health and life insurance c. 600 AD when they organized guilds called "benevolent societies" which cared for the families and paid funeral expenses of members upon death. Guilds in the Middle Ages served a similar purpose. The Talmud deals with several aspects of insuring goods. Before insurance was established in the late 17th century, "friendly societies" existed in England, in which people donated amounts of money to a general sum that could be used for emergencies.
Separate insurance contracts (i.e., insurance policies not bundled with loans or other kinds of contracts) were invented in Genoa in the 14th century, as were insurance pools backed by pledges of landed estates. These new insurance contracts allowed insurance to be separated from investment, a separation of roles that first proved useful in marine insurance. Insurance became far more sophisticated in post-Renaissance Europe, and specialized varieties developed.
Toward the end of the seventeenth century, London's growing importance as a center for trade increased demand for marine insurance. In the late 1680s, Mr. Edward Lloyd opened a coffee house that became a popular haunt of ship owners, merchants, and ships’ captains, and thereby a reliable source of the latest shipping news. It became the meeting place for parties wishing to insure cargoes and ships, and those willing to underwrite such ventures. Today, Lloyd's of London remains the leading market (note that it is not an insurance company) for marine and other specialist types of insurance, but it works rather differently than the more familiar kinds of insurance.
Insurance as we know it today can be traced to the Great Fire of London, which in 1666 devoured 13,200 houses. In the aftermath of this disaster, Nicholas Barbon opened an office to insure buildings. In 1680, he established England's first fire insurance company, "The Fire Office," to insure brick and frame homes.
The first insurance company in the United States underwrote fire insurance and was formed in Charles Town (modern-day Charleston), South Carolina, in 1732.
Benjamin Franklin helped to popularize and make standard the practice of insurance, particularly against fire in the form of perpetual insurance. In 1752, he founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. Franklin's company was the first to make contributions toward fire prevention. Not only did his company warn against certain fire hazards, it refused to insure certain buildings where the risk of fire was too great, such as all wooden houses.
In the United States, regulation of the insurance industry is highly Balkanized, with primary responsibility assumed by individual state insurance departments. Whereas insurance markets have become centralized nationally and internationally, state insurance commissioners operate individually, though at times in concert through a national insurance commissioners' organization. In recent years, some have called for a dual state and federal regulatory system for insurance similar to that which oversees state banks and national banks.
In the state of New York, which has unique laws in keeping with its stature as a global business center, former New York Attorney General Eliot Spitzer was in a unique position to grapple with major national insurance brokerages. Spitzer alleged that Marsh & McLennan steered business to insurance carriers based on the amount of contingent commissions that could be extracted from carriers, rather than basing decisions on whether carriers had the best deals for clients. Several of the largest commercial insurance brokerages have since stopped accepting contingent commissions and have adopted new business models.

Insurance Cover

2007-11-23T02:15:00.001-08:00

Insurance Cover
Type of Insurance
Any risk that can be quantified can potentially be insured. Specific kinds of risk that may give rise to claims are known as "perils". An insurance policy will set out in detail which perils are covered by the policy and which are not.
Below is a (non-exhaustive) list of the many different types of insurance that exist. A single policy may cover risks in one or more of the categories set forth below. For example, auto insurance would typically cover both property risk (covering the risk of theft or damage to the car) and liability risk (covering legal claims from causing an accident). A homeowner's insurance policy in the U.S. typically includes property insurance covering damage to the home and the owner's belongings, liability insurance covering certain legal claims against the owner, and even a small amount of health insurance for medical expenses of guests who are injured on the owner's property.
Automobile insurance, known in the UK as motor insurance, is probably the most common form of insurance and may cover both legal liability claims against the driver and loss of or damage to the insured's vehicle itself. Throughout most of the United States an auto insurance policy is required to legally operate a motor vehicle on public roads. In some jurisdictions, bodily injury compensation for automobile accident victims has been changed to a no-fault system, which reduces or eliminates the ability to sue for compensation but provides automatic eligibility for benefits. Credit card companies insure against damage on rented cars.
Aviation insurance insures against hull, spares, deductible, hull war and liability risks.
Boiler insurance (also known as boiler and machinery insurance or equipment breakdown insurance) insures against accidental physical damage to equipment or machinery.
Builder's risk insurance insures against the risk of physical loss or damage to property during construction. Builder's risk insurance is typically written on an "all risk" basis covering damage due to any cause (including the negligence of the insured) not otherwise expressly excluded.
Business insurance can be any kind of insurance that protects businesses against risks. Some principal subtypes of business insurance are (a) the various kinds of professional liability insurance, also called professional indemnity insurance, which are discussed below under that name; and (b) the business owners policy (BOP), which bundles into one policy many of the kinds of coverage that a business owner needs, in a way analogous to how homeowners insurance bundles the coverages that a homeowner needs.
Casualty insurance insures against accidents, not necessarily tied to any specific property.
Credit insurance repays some or all of a loan back when certain things happen to the borrower such as unemployment, disability, or death. Mortgage insurance (which see below) is a form of credit insurance, although the name credit insurance more often is used to refer to policies that cover other kinds of debt.
Crime insurance insures the policyholder against losses arising from the criminal acts of third parties. For example, a company can obtain crime insurance to cover losses arising from theft or embezzlement.
Crop insurance "Farmers use crop insurance to reduce or manage various risks associated with growing crops. Such risks include crop loss or damage caused by weather, hail, drought, frost damage, insects, or disease, for instance."[5]
Defense Base Act Workers' compensation or DBA Insurance insurance provides coverage for civilian workers hired by the government to perform contracts outside the US and Canada. DBA is required for all US citizens, US residents, US Green Card holders, and all employees or subcontractors hired on overseas government contracts. Depending on the country, Foreign Nationals must also be covered under DBA. This coverage typically includes expenses related to medical treatment and loss of wages, as well as disability and death benefits.
Directors and officers liability insurance protects an organization (usually a corporation) from costs associated with litigation resulting from mistakes incurred by directors and officers for which they are liable. In the industry, it is usually called "D&O" for short.
Disability insurance policies provide financial support in the event the policyholder is unable to work because of disabling illness or injury. It provides monthly support to help pay such obligations as mortgages and credit cards.