Why are claims such a hassle? That’s a very valid question, especially considering that is the reason you purchase insurance protection….in case of a claim.
I will attempt to address a couple of issues very briefly. As companies have suffered extreme losses these past few years, adjustors are being required to provide more and more documentation as to why certain payments are justified. The majority of the time you as the policyholder are the only one that can provide the information the adjustor needs.
Right or wrong, companies are scrutinizing claims in more detail than I’ve seen in the past 25 years. We can fight it, or do our best to provide them with information they request, as long as the request is part of the insurance contract.
Let’s take an example. You have hail damage to your roof. You believe you’re entitled to a new roof. You have replacement cost coverage. What does that mean? Let’s assume the damage is from the recent storm. Your roofing contractor and the adjustor agree on the scope of the work and the price. At that time the adjustor should request a check for a depreciated amount, not replacement cost.
You then replace the roof. You will then need to provide the company with paid receipts and possibly pictures of the new roof. The company may request the adjustor come back to the home and do an inspection. At that time the Replacement Cost Recovery should be paid. If you were able to complete the repairs/replacement for less than the amount agreed upon, you will only receive up to the amount you paid. That’s all the insurance company is obligated to pay.
Conversely, if you (or your contractor) went over the agreed amount, the company is not obligated to pay the amount over the agreed amount. What if you or your contractor discover additional damage that wasn’t included in the initial estimate or scope? You need to contact the adjustor to get that amount approved before proceeding with the work.
Take the same type of loss, but let’s assume the company is aware you had a loss three years ago and were paid substantial money to replace the roof of your Oklahoma commercial property. The hail damage on the roof appears to have not only new damage, but old damage as well. They may very well want proof (in the form of receipts etc.) that you actually replaced the roof 3 years ago. Companies are not in the business to pay multiple times for the same repair or replacement.
I recently received a question from a client. He wanted to know why the company was asking for proof (receipts) he had replaced his roof 3 years ago. Not only are companies examining claims closer, they are also underwriting the policies a lot stricter.
In order to provide “replacement cost” on your roof, the company at the time they issue the policy may want to make sure your roof is the age you say it is. Different companies have different guidelines. Without proof, you may only qualify for “ACV” (Actual Cash Value) or depreciated value on your roof.
Believe me when I tell you we don’t like the current insurance environment any better than you do. We may even dislike these challenges more than you, since we fight with underwriters daily on your behalf. If it seems we’re asking more questions and requiring more information, it is simply because the companies are asking more and more questions.
Ultimately, the more detailed information we can provide to our underwriters the better your premium and coverage will be.