As a policyholder pursuing an insurance claim, you are entitled to be treated fairly as to not only the ultimate claim result but also during the process along the way. To increase your chances of a satisfactory experience, you need to observe the same basic traits that benefit all of us in all areas of our lives, namely:
1) Know your rights.
2) Be organized.
3) Work diligently and efficiently.
A policyholder has two basic sets of rights which apply to any insurance claim. The first set of rights is the most obvious, namely, the rights of the policyholder as set forth in the insurance contract itself. These rights in the insurance policy include such things as the amount of dollar coverage available for the loss in question, the amount of deductible that the insurance company will apply, and the actual language of the policy explaining what is covered and what is not covered. The second set of rights is the right to have the claim handled fairly and honestly. These rights aren't spelled out anywhere in the policy but are, instead, legal rights which courts have developed over the years to protect policyholders from overreaching and unfair treatment by insurance companies. These unwritten rights are usually referred to as the insurance company's obligation to treat the policyholder fairly and in good faith. The failure to do so can amount to bad faith and lead to the assessment of damages against the insurance in excess of the actual policy or contract benefits. Even though insurance policies need to be precisely worded and, therefore, will always contain some legalese which you might find to be unclear, the language used in today's insurance policies is more understandable than it used to be. However, to the extent that the policy is unclear or ambiguous with respect to any aspect of your loss, that ambiguity will probably work to your favor since the law generally states that because it was the insurance company that drafted the insurance policy, any ambiguity or lack of clarity with respect to the policy's terms and definitions will be resolved in your favor. If a policy is reasonably clear as to its intentions, courts will usually enforce the policy according to its terms and conditions even if doing so requires that the insured's claim be denied. Bear in mind, however, that enforcement of the literal terms of the policy may not occur if doing so would defeat the reasonable expectations of the policyholder. For example, individuals who buy insurance assume that certain basic types of losses will be covered. As an easy example, someone buying homeowners insurance would assume that the insurance policy would cover theft of items of personal property from the home. If the insurance policy, as issued, did not provide such coverage, the insured's reasonable expectations as to coverage under the policy would have been denied.
Under that set of circumstances, the court may well require the insurance company to pay the loss even though the policy language would otherwise provide no coverage for the loss. Needless to say, the key aspect of this concept is that the insured's expectations have to have been reasonable with respect to the coverage issue in question. Many insureds simply think that everything is covered which is not the case. All insurance policies have limitations and exclusions and, to the extent that those limitations and exclusions are reasonable and do not deny coverage for what an insured would reasonably expect to be covered, they will be enforced. Should a question arise in your claim as to coverage under the reasonable expectations theory, it is imperative that you consult with an experienced attorney familiar with the law of insurance in your state.
What information are you required to provide the insurance company in order to properly document your claim? Unfortunately, the answer is necessarily vague in that the insured has to provide reasonable support and documentation of the claim before an insurance company is obligated to pay the claim. What might be considered reasonable for one claim may not be reasonable for a similar but different claim. Quite often, the extent of documentation required by the insurance company depends upon whether there are red flags associated with the claim you have presented. Red flags are circumstances which, at least in theory, might cause an insurance company to conduct some additional investigation into the claim before paying the claim. Common red flags could be any or all of the following:
1) The policy has only been in existence for a short period of time.
2) The loss occurred shortly after the insured had changed (usually increased) available coverages.
3) The amount of the claimed loss seems to significantly exceed what the claim adjuster perceives to be the lifestyle of the insured.
4) Inconsistencies exist between what the insured may have reported stolen to the police compared with the value or number of items subsequently reported to the insurance company as being stolen.
5) A loss occurs to property that the insured was attempting to sell or had recently tried to sell but was unsuccessful in doing so.
6) The insured had been attempting to provide very little or no documentation, such as receipts, operating manuals, or photographs of the items claimed to have been stolen.
As you can see, there are a number of criteria which will cause an insurance company to look more closely at some claims as compared to others. There is nothing wrong with an insurance company doing so provided there is a reasonable basis for the additional investigation and the insurance company is not merely trying to delay or postpone its obligations to the policyholder and/or attempt to leverage or wear down the insured so that the claim can be settled for less than its proper value.
One of the most common contentions raised by the insurance company is to suggest that a claim, or at least portions thereof, will not be paid because the insured hasn't provided written receipts or other documentation proving that the insured owned the property in question. Is it wise and prudent for an individual to save purchase receipts for any personal property items having more than nominal value? Of course it is. (These receipts should be stored at some other secure location so that they can't themselves be destroyed due to the loss in question.) Is it required that the insured do so? Absolutely not. The only criteria with respect to paying any claim is whether the claim adjuster, acting honestly, reasonably and objectively, either believes or disbelieves the insured's statements as to the loss in question. For example, it is completely improper for the insurance company to deny a theft claim where the claim handler should and does reasonably believe the insured but the insured is simply the type of person who throws receipts away. By the same token, an insurance company could, under certain circumstances, reasonably disbelieve another policyholder who had a receipt for every stolen item, no matter what the value. Simply put, inadequate documentation for a claim otherwise deemed honestly and reasonably presented is no excuse for non-payment, just as perfect documentation should not assure payment for a claim which otherwise has reasonable indications of fraud or exaggeration.
