Updated: Jun 10, 2021
Ahh, the ever disputed topic of claims. In this blog, I will briefly give some examples of claims and what might or might not be covered. Obviously, claims are a huge part of what we do as agents. And it's a huge part of what we all would like to avoid. If you take nothing away from this blog except the next comment, I'll consider it a successful post. IF WE DON'T KNOW YOU OWN IT, WE CAN'T PROTECT IT. I know that some of us believe everything we own is worth thousands of dollars. And I know that we almost never agree when the adjuster says it's only worth $115.
I started typing this blog out including some myths and facts. Then I deleted it. Truth be told, there are so many myths about insurance in general that posting any would only cause more confusion. So instead, I decided to focus on some examples and tips. I'll cover briefly homeowners, auto and commercial. Please keep in mind the one thing I'm not bringing into my scenarios and examples is your deductible. In MOST cases, your deductible is going to apply.
So, let's start with homeowners policies. The first thing you need to make sure you understand is what actual cash value (ACV) coverage is and replacement cost (RC). Here's the fact folks, if your roof is 30 years old - it does not matter if it is still in good shape - most insurance carriers are only going to pay ACV coverage in the event of a covered loss - not replacement cost. So you might think that if it takes $25,000 to replace, that's what you are going to get. Not necessarily the case.
Or let's say that old console TV your parents left you was stolen. I know, who would steal something that old/bulky - hey... it happens (if you don't catch them because they broke their back trying to carry it out). Anyway, you might think it's worth a couple thousand dollars. Probably not what you're going to get. Now, if you have RC on your personal property, chances are you'll get a new tv in the general same size, etc at today's cost. If you honestly believe that console tv is worth more - get an appraisal and schedule it. Jewelry - same thing. If you have higher end pieces, schedule them or you will not get the replacement cost value you think you should. And note, just because you think its worth $2000, that does not mean that's what it's worth. There is a process, formulas that are created to figure out some of those costs that every insurance company uses - formulas that are set by actuaries and the Commissioner that we have to follow.
Next thing on homeowners - let's take the July 19th, 2019 hail storm that came through. Devastated our area, people's homes, autos, garages, etc. The first thing you would have wanted to do was snap some pictures of the damage - the hail holes in your siding or broken windows, the tree on your roof, etc. Then begin removing the tree or covering the broken windows. It is YOUR duty to prevent further loss from happening. If you do nothing with that hole in your roof and it takes a week for that adjuster to get out there and it's rained for 4 more days - guess what? The additional damage that is caused by that rain leaking in your attic, in your walls, dripping into your electrical outlets causing a house fire might not be covered. Part of your agreement when you sign your insurance contract is that you will make every attempt to prevent further damage caused by a covered loss. Put boards on those broken windows, a tarp on your roof. Protect your assets from further damage.
Let's talk auto insurance. Scenario - You're driving on I35 south in a winter ice storm, being cautious, driving slowly, etc. A car comes up on your left side to pass and loses control. You swerve to avoid a collision and hit the guard rail. For this purpose, let's say there are no injuries. Now, if you have liability only, guess what - no coverage for your vehicle. Yes, the other vehicle lost control, but so did you. Now if that other car hits you, that's a different scenario. So we'll stick with this scenario. You hit the guard rail, car is totaled, but you walk away injury free. Liability only - no coverage for your auto. But the DOT (Department of Transportation) for the State of MN is going to want you to pay for the damaged guard rail which your liability will cover. If you have full coverage including comprehensive and collision coverage, your vehicle will be covered. If you have towing/road side as part of your comprehensive - you could get your car towed to the closest repair facility up to a certain amount. If you have rental coverage as part of your full coverage - you could get part of the cost covered so you can get a rental vehicle. It all comes off YOUR insurance because technically - you lost control of your vehicle.
Just like a deer hit. Liability only - no coverage for your auto. Full coverage w/comp and collision - covered. However, if you swerve to miss the deer and hit the ditch, a telephone pole and then a tree, the coverage is pulled from your collision not your comprehensive. The damage to the telephone pole comes from your liability regardless. But if you hit the deer, the coverage is pulled from your comprehensive coverage. Let's say that deer just hit your passenger side window. Full coverage comprehensive w/full glass - covered. However, if you take no steps to prevent let's say a theft and someone steals your brand new sub speakers you just put in because the window is broken and you left your car parked on the street, guess what? Possibly no coverage because you didn't take steps to prevent further loss.
In any auto accident you should 1. Remain calm. 2. Assist any injured people. Call an ambulance asap if there are injuries. 3. Make sure you are off the road and out of the way of traffic if possible. 4. Call the police. 5. Take pictures. 6. Exchange insurance information regardless of who you believe to be at fault. 7. Never admit fault at the scene. Your claims adjuster will make that determination. 8. Contact your agent.
Last one - commercial policies. Same things kind of apply. Take the steps to prevent further losses. If you have expensive tools or equipment, discuss that with your agent. You might want to schedule the items vs. having it covered under your BPP (business personal property). There might not be enough coverage in place otherwise. If someone happens to steal the Bobcat you had to leave at a job site and you don't have it scheduled? Chances are there is no coverage. Your work truck sitting in your driveway is broken into and all your work tools stolen - if it's not scheduled properly, you may not have coverage. Again, if we don't know you own it, we can't make sure it's covered.
And finally, how we proceed with a claim. You're going to give us a call to report the claim. We will take the information, date and location of loss, what happened, damage caused, people involved, contact information, if there were any injuries, etc. We will verify if your deductible applies. We will usually tell you to get an estimate - whether it be car damage, house damage or theft, etc. You can go anywhere you want to get an estimate. You can price the same type of property that was lost to get cost of the items. We prefer to submit all of this to the claims adjuster when we submit the claim. We usually say to give the adjuster 24 - 48 hours to contact you. If you do not hear from one within that time frame, we ask you give us a call back so we can follow up. Once we submit your claim to your insurance carrier, a claim number is assigned. We document all of this in our system under your account.
The adjuster will then be assigned. At that point, most of, if not all of your future communication about your claim will be with your adjuster. It basically leaves our office at that point. However, we are always here to help. Sometimes a claim can be resolved in a rather quick turnaround. And sometimes, not so much. For example - if it's a catastrophic loss like the July 19th, 2019 hail storm, the adjusters are going to be extremely busy. They may even call in what is called a "CAT Team" to help them access the damage. That claim is going to take longer than a deer hit with your car. No claim is cleared up over night.
We don't, nor do the adjusters like to tell you there is no coverage in place. If you are EVER in doubt about anything being covered from water seepage, theft, collisions, etc. PLEASE call you agent. Let's take a look at your policy. Ask the questions. We'd rather you ask if you are responsible for that person's auto that hit your cow that got out of the pasture before that car hits your cow. Ask before something happens so you are prepared when/if it does. We don't want you to be surprised when the unexpected happens. We want to educate you, we want to make sure you understand your policy. We want to make sure we Protect What's Important to you before a loss happens and find you are not protected.