Jonathan Cooper’s Blog

When any of us purchases an insurance policy, we pay premiums with the rightful expectation that in the event that, G-d forbid, we ever need to file a claim, the insurance company will honor their end of the bargain, and pay the claim. In the wake of several tragic events, including the September 11 attacks and Hurricane Katrina, the insurance industry has been crying about their unfair burden in having to pay on all these claims. The truth is, however, that despite accepting and investing their insureds’ premiums for years before, the insurance industry continues to seek nearly any and all means to avoid paying on these claims.

Even worse, according a Consumer Federation of America review of figures from rating service A.M. Best. The percentage of premium dollars insurers collect that is paid out in claims fell from an average of 81% in the 1980s and 79.8% in the 1990s to just 68.3% last year, the lowest level in at least 26 years and perhaps the lowest since the 1950s. At the same time, property/casualty insurers have been posting record profits.

So how do you protect yourself from an unethical insurer?

No method is foolproof, but it should come as no surprise that some insurers have better repuatations than others for dealing fairly with their insureds. For example, you can search the New York State Insurance Department’s Rankings of Automobile Insurers at http://www.ins.state.ny.us/auto/2007/ark2007.pdf

Second, and this is ALWAYS applicable, make sure you comply strictly with all provisions of your insurance contract in connection with your claim — even if the requirements seem ridiculous. In particular, make sure that you notify your insurer PROMPTLY of all claims (or potential claims) - preferably in writing and with written confirmation of receipt by the insurer (one of the insurers’ favorite — and easiest — bases for denying claims is that they did not receive timely notice of the claim). 

If you are not sure what the policy requires of you, call the insurer and ask them.

If you still are unsure or are dissatisfied with your insurer’s response, you should probably call a lawyer.

This entry was posted on Monday, June 2nd, 2008 at 1:42 am and is filed under consumer protection, frivolous lawsuits. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.