How to avoid common mistakes when filing insurance claims
The biggest insurance mistake is not having insurance in the first place.
But even if you have adequate insurance, making it work for you when accidents happen can be problematic unless you know your coverage limits, check the accuracy of those handling your claims and carefully follow instructions in filing a claim.
"Mistakes in submitting insurance claims, by both claimants and the insurance companies processing the information, is the largest reason claims are delayed or denied," said
Avoiding common insurance claims mistakes can not only save you money and time, but the headaches that come when protection that's already in place fails to deliver in a timely manner.
Who's right or wrong
Most of us scramble for the television remote when a law firm advertises its prowess in going up against the big, bad insurance company. But those self-serving ads hint at a costly misconception - insurance companies are never, ever wrong.
"Insurance claims data are being imputed by data entry clerks who handle an enormous volume of cases, and make mistakes that anybody handling that kind of volume would make," Stern said. "As a result, many times the insurance company will deny claims for the wrong reasons, or simply be relying on bad or inaccurate information."
Consumers should protect themselves against mistakes by maintaining a reliable record of events. That means putting any correspondence with your insurance company in writing whenever possible, said Stern.
"Many people call over the phone to report the claim, check on the claim's status or to provide information. Always get the email address of whom you are speaking to and send them an email confirming the conversation," he said. "In many states, unnecessary delays in claims handling or making repeated requests for information previously provided can be considered 'bad faith' on behalf of the insurance company. A written record will go a long way in proving these claims."
Filing a report after an automobile accident is one of the most common claims. There were 6.1 million police-reported crashes in 2014, according to the federal
Consumers can hold down their out-of-pocket share and avoid confusion and delays by always having a law enforcement agency that responded to the crash write a report.
"The amount of money you will get from an at-fault driver's insurer depends on how much at fault each party is, and the other insurer is always going to argue in their favor," said
A visual record can also strengthen your case. Take pictures of the resulting damage, particularly impact points that will receive the most attention come repair time, suggested claims management expert Zeheria Brown.
Lastly, follow the insurance company's rules on documentation. "The insurance company has the right to deny the claim if you do not cooperate in the claims handling process. Often this will mean multiple requests for documents," said Stern.
Personal property
Property damage is also a common insurance claim under homeowner's insurance.
A regular review of your policy can reveal whether coverage is adequate.
"Most homeowner's policies have a total limit for household contents that is based upon a percentage of the value of the real estate," said
Know, too, the difference between replacement cost and cash value, if all you want is the money.
"Most homeowner's policies will only reimburse you actual cash value - replacement cost less depreciation," Smolensky said.
If an item is damaged during a move, don't wait to file a claim. Smolensky said many moving companies have deadlines to submit a claim for damaged goods. And be prepared to document your claim.
"Make an inventory list ahead of time before you move," she said. "Take pictures of your household goods. Make a list of anything breakable or anything that you care about. You may need proof later that the item existed in the first place and that it was in good shape."
Health insurance
We've all experienced the shock of a statement from the insurance company detailing a larger out-of-pocket expense from the doctor's visit than expected. To head that off, do a little advance homework.
"Make sure that the service you're seeking is covered and whether the service needs some sort of pre-certification or pre- authorization," said Stern. "Covered generally means that it's something that plan will pay for. Pre-certification or pre- authorization means that the health insurance company wants to have one of their people look over the service being requested to see if it's medically necessary, in the eyes of the insurance company."
If an exorbitant bill arrives, first see the amount reflects that balance after coverage from your insurance company (initial bills often have yet to be processed by an insurance carrier.) And, don't assume what you're being charged is absolutely accurate.
"If you're unsure about any of the charges, you have the right under most plans to be able to ask for a clearer explanation as well as to appeal any decision that you think was made incorrectly or that you are unsure about," said Stern.
Lastly, no matter if your claim relates to a broken armoire or broken arm, don't be tempted to pad your claim in any way.
"Be honest. If the insurance company begins to feel you are inflating values, it can quickly become less accommodating," said Smolensky.
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