When the insurance company issues a claim check for an amount much lower than expected, it’s time to start negotiating with the insurance company.
There are times when you have to become actively involved in the settlement of your insurance claim. Whether the dispute arises out of an automobile claim, homeowner damage or health insurance payment, if the check is much lower than expected (or too low to cover the insured damage) then it’s time to test your negotiation skills to get a higher payout.
Before you start your negotiations, there are a few things you should do.
Read the Insurance Policy
The insurance policy is the framework for determining the amount of your claim payment. Becoming familiar with the limits, deductibles, terms and conditions of the policy is key. The policy not only governs the type of claims the company will pay but also the way in which the claim amount is calculated.
Sometimes angry policyholders attempt to fight the final claim amount without having a good understanding of policy basics such as how the valuation clause works. Some folks find out too late that there are sub limits on the policy and varying deductibles. Reading the limits and deductibles on the declarations page (face page) is not enough.
You must read the policy to get a good understanding as to how it works. It’s best to review the policy prior to a loss so you won’t be surprised when the claim check is delivered.
Get Alternative Estimates to Fix the Damage
The minute the claim occurs, it’s its best to get several estimates. While the insurance adjuster will provide an estimate of the cost to repair or replace the damages, you will sleep better if you get a few estimates on their own. This way you have ammunition, which prepares you to negotiate with the adjuster on the spot. Having several estimates will help the adjuster to understand why her numbers need to be modified.
Document All Contact with the Insurance Company
Insurance companies have streamlined the claims process by providing online claims reporting. Such services make it easier to track all correspondence and emails between you and the insurance company. Keep in mind that not all insurance claims are processed online and not all contact is done through email. In such cases it’s important to take meticulous notes of all phone conversations and face-to-face meetings.
Having a paper trail makes it easier to pinpoint any discrepancies or miscommunications, which might lead to a low insurance estimate.
Call the Insurance Company and/or Adjuster
Sometimes a simple call along with backup documentation is all it takes to resolve the claim discrepancy. Be prepared to escalate the call beyond the service rep that answers the phone. If the adjuster is not able to or does not have the authority to modify the claim any further, get the name and number of the person who can.
Part of the claim battle is speaking to the proper person who has the ability to fix the situation.
Follow Up with the Insurance Company
Disputing an insurance claim can be time consuming and frustrating. Keep in mind that insurance representatives are juggling several accounts and re-opening a closed claim may not be their top priority. It’s important to diligently follow up with the insurance company on a regular basis until the situation is resolved.
Insurance Arbitration Clause
If you and the insurance company cannot come up with an equitable solution, it may be time for arbitration. Arbitration involves bringing in an unbiased third party to settle the dispute. Most insurance polices contain an arbitration clause for just such situations. While arbitration may eventually settle the difference, it is not free.