Most of you have insurance. You insure your autos, your homes, your health (medical insurance), your income (disability insurance) and your lives. You may also insure your businesses against damage to property used for commercial purposes and loss of income. Your insurance includes protection against lawsuits filed by a third party against you, and you expect your insurance company to defend you in that lawsuit and protect you against a judgment for money damages.
We buy insurance not because we want it but because we need it – fear of the future motivates us to protect ourselves against injury to ourselves, our families and our property. The prudent person buys as much insurance as he or she can afford – sometimes even more. We seek from our insurance company peace of mind and security against the risk of financial injury caused by the unexpected.
Your insurance company is a friend when you agree to purchase the insurance. However, often that same insurance company becomes your enemy when you make a claim. The claims process is often a hostile and difficult one with a burdensome amount of paperwork and frequent requests for more information. Usually with the goal of finding a way to turn down your claim or limit payments. Some insurance companies reward their claims handlers for keeping claim costs down by basing their compensation on how little they pay on legitimate claims.
Insurance companies are powerful financial corporate structures. They have large treasuries. While the purchase of a policy may take place at your home or business or at a local office, things are different when a claim is made. Nearly all of the time you are dealing with someone who is hundreds if not thousands of miles away. A face to face meeting is rare, except when an investigator shows up at your door unexpectedly. Indeed, your insurance company has the power and control over you in your relationship with it.
What can you do when you believe your insurance company acts unfairly? How do you combat “low-balling” or wrongful refusals to pay you what the insurance company promised to pay you for the protection that you purchased?
You can go to your state Department of Insurance. However, these state executive departments are generally ineffective. More than one-half of the states under-fund their Departments of Insurance, so they have inadequate staffs and resources to handle complaints from the public. In some states, the Department of Insurance has been graded as low as an “F” by an independent agency. Not surprisingly, when a claim is denied your insurance company will usually refer you to the state Department of Insurance if you disagree with the claims decision, knowing that you will receive little help.
What your insurance company does not tell you is that there are ways to combat its wrongful denials. For example, in nearly all states, there is an Unfair Claims Practices Act which lists 16 unfair claim practices which insurance companies cannot engage in. You are never told about this when your insurance company denies a claim.
In addition, all insurance companies must abide by a duty of “good faith and fair dealing” in their investigation, administration, and decisions regarding your claim. If your insurance company violates these duties to you, you can sue and obtain money damages for what is owed you under your policy plus damages for your worry and anxiety and in some instances attorney fees. And, in the cases of malicious and fraudulent claims handling, your insurance company may be liable to you for punitive damages based on a civil fine which you receive to punish the company for its wrongful conduct.
We can help you evaluate your claim and determine if you need to sue to get what is rightly yours under your insurance policy. You paid for protection; YOUR insurance company should provide it! — Guy O. Kornblum
Mr. Kornblum welcomes your comments at email@example.com.
Uninsured Motorist and Underinsured Motorist Coverage (UM/UIM) is available as additional insurance coverage in your auto policy. Many overlook or don’t understand the importance of this coverage.
Frankly, in California in the underinsured coverage situation, you can never collect your full limits because of this reduction; thus, you pay for coverage you will never have! But that is the way it is structured in our state. A change should occur so that the full limits are available so we are not a “set off” state anymore.
Example: If you are injured by a negligent motorist with only $15,000 per person coverage in that vehicle’s policy (the minimum limits required), and you have greater coverage for UM/UIM, say $300,000 per person, you have an additional sum of $285,000 available to pay per person for the injuries caused by that negligent motorist. As noted, the amount of coverage for the negligent driver is deducted from your limits so you have the difference available. The “per person” limits on your policy are limited to the “per occurrence” (i.e. for one accident) limits of that policy. For example, you may have $300,000 per person coverage but $500,000 per accident, so the total amount available is limited to $300,000 for any one person, but $500,000 for all persons injured in an accident.