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Navigating Insurance Claims: A Guide for Policyholders


Filing an insurance claim can be a daunting task, often accompanied by stress and uncertainty. In this article, we provide policyholders with practical advice on how to navigate the complexities of making an insurance claim and dealing with the insurance company during this critical time.

Understand Your Policy Coverage and Consider Purchasing an Umbrella Policy
If you are reading this before you have suffered a loss, take a few moments to review your existing insurance policies. You want to check the policy periods, limits, deductibles, and any relevant exclusions. If you are unsure about your coverages, contact an insurance agent or broker. Agents and brokers are often happy to help free of charge. And, if you think that you might need additional coverage, ask your broker about an umbrella policy. Umbrella policies are designed to provide additional limits over and above primary policies (e.g. auto, home, liability, etc.) and can be relatively inexpensive.

Take Inventory
Too often, policyholders who have suffered a devastating house fire have to deal with the unpleasant task of recreating, from memory, a long list of items they have lost. To obviate these difficulties, take inventory of your possessions before you suffer a loss, either by writing them down or, better yet, taking pictures or a video in a walk-through of your house. Store the pictures and videos offsite together with receipts for particularly expensive items. You probably have relatively low limits for things like jewelry, furs, and silver, so check with your broker to be sure you have sufficient coverage.

If you Suffer a Loss, File your Claim Promptly
Almost all insurance policies contain provisions that bar coverage for claims that are made too late. So, if you suffer a loss, make a claim with your insurance company immediately. If you don’t yet know the full extent of your damages, that is fine. You will have time to supplement your claim. But making a claim promptly will prevent the insurance company from denying your claim on late notice grounds.

Keep a Record of All Interactions with the Insurance Company
Maintain a detailed record of all communications with the insurance company. Note the names and positions of the individuals you speak with, the date and time of conversations, and a summary of what was discussed. If possible, communicate by email so that you have a record of your dialogue with the insurance representative. This record can serve as a valuable reference if any disputes should arise.

Follow Up Regularly and Keep a Record
Some insurance companies respond to claimants promptly. Others, unfortunately, sometimes let claims languish. If your insurance adjuster is taking too long to respond, follow up. And be sure that your attempts to contact the adjuster are documented (ideally by way of email or certified mail). If a dispute develops, you will want to have proof that you were diligent but the insurance adjuster was not.

Don’t Settle Your Claim Unless You Know the Full Extent of Your Loss
Once you accept a final settlement of your claim, you will not be able to seek compensation for additional damages that develop. For instance, claims relating to any additional bodily injuries that develop after a motor vehicle accident, or any additional damaged items you discover after a house fire, will be waived. So, make sure you know the full extent of the loss before you close your claim.

If you believe that the insurance company’s initial offer to settle your claim is too low, don’t hesitate to contact the adjuster and make your argument for a higher payout. For instance, if the issue is damage to personal property, look for comparable product values and send them to the adjuster, explaining why the adjuster has undervalued your claim.

If the Insurance Company Has Treated Your Unfairly, Contact an Attorney
If the insurance company has wrongfully denied your claim, is refusing to make a fair offer, or has otherwise treated you unfairly, consider contacting an attorney. Section 155 of the Illinois Insurance Code (215 ILCS 5/155), provides that when an insurance company’s conduct is “vexatious and unreasonable,” a policyholder who wins an action against the insurance company can recover the amount owed, the reasonable attorneys’ fees expended in pursuing the claim, as well as additional damages. Accordingly, if you believe that an insurance company has treated you unfairly, consider speaking with an insurance recovery attorney to determine whether legal action may be advisable.

Dealing with an insurance claim can be challenging, but by following these recommendations, you can enhance your chances of a fair and timely resolution during a challenging time.

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