Over the last month I’ve received a few calls from a former insured seeking guidance in dealing with a homeowner claim. My agency had lost his business to an on-line company. They discovered a water pipe leak on a Saturday evening. Part of me wanted to remnd him he was no longer a customer and to figure it out for himself. That might feel good for a few moments, but that it’s not my nature and the trend is that after dealing with the on-line claim process, insureds come back to their local agent.
If you go on-line and check the reviews of any insurance company, you can find negative reviews associated with every company’s claims service. Some absolutely deserve the negative commentaries, but most don’t. Usually, with a little understanding of the claims process, an individual can understand the time lapse between the date of your loss and the date when you finally get paid; all the steps that need to be followed through the process take time. The time lapse serves to only compound the frustration associated with the disruption the loss is causing. When dealing with the on-line or 800 # companies what’s really missing is the individual to coach you through the entire process; someone to explain each step in the process and the time frames involved.
The individual that had called initially had to search for a plumber on a Saturday evening to come fix his leaking pipe. I can’t guarantee that I’d have been able to get a plumber out there, but at least I’d have a list of three for him to call. Then who does he call to dry out the walls, carpets and floor. The sooner that moisture is removed, the better the chances are of minimizing your extent of damage. I’d have been ready to refer him to at least 3 difference restoration companies for the cleanup. These companies usually have relationships with the various trades (including plumbers) to make sure you get your home back to normal without delay.
The individual I was talking with had managed each of those steps and he called an 800 number to report the claim. Four days later a company claims adjuster called him to discuss his claim. During their conversation, she told him to get a contractor lined up to do the repairs and to send her the estimate. She said that would help speed up the settlement process…if they accepted the claim. What did she mean “if we accept the claim” he screeched into the phone as we talked. That was followed by another screech with “I have homeowners insurance with them!” Having vented, he then he asked “shouldn’t I have coverage for that?” Without a copy of his policy I can’t make that call.
Five more days go by, including the weekend, before my next call from the insured. An appraiser who he complained couldn’t have been more than 20 had stopped by to see the damage on Friday. Today, (Monday) he received a “Reservation of Rights” letter in the mail. It was basically indicating that if he could not prove that he had heat on steadily for the last 2 months, that they could deny the claim. Even though he had heat on, all he saw was the potential for the insurance company to not pay his claim. I calmed him explaining that if the pipe leak had resulted from a frozen pipe caused by the house being left unheated, the company would be within their rights to deny coverage…but not in his case.
Over the next 2 weeks he got an estimate from his contractor for the work that needed to be done. He had submitted it to the appraiser. To his surprise and dismay, the check arrived. The check was for the proper amount but it had his wife’s, his, and the mortgage company’s names on the check. This meant he had to send the check to the mortgage company for them to endorse and return it to them for deposit into their bank account. That process could add another 2 weeks to this claims process.
That claim took 25 days from the initial reporting of the loss to initial receipt of the settlement check. The settlement of most Homeowner claims are concluded in 30-45 days but that time frame is dramatically effected by the type and extent of the loss. This individual’s claim could have taken 5-10 days less considering the factors involved. That insured was uneasy dealing with an on-line company, upset by the reality of his home being damaged, irritated about the disruption to life as he knows it, and compounded by his distrust of all insurance companies. Now add who knows what other stressors he was dealing with in his life which served to make him a mess. With all those factors, nothing that company could do with this claim was going to make him happy. Insuring on-line was not the proper move for him.
The reality is that most insurance companies have guidelines that require an adjuster (the inside manager of your claim) attempt to contact a claimant within 24 hours of a claim being reported. The adjuster then assigns a “damage appraiser” (individual to assess the damage and cost to repair) who has a goal of seeing the property within 5 days. Weather and other factors can sometimes affect that by a day or two. The next tie up is getting the estimate from the contractor you want to use. The appraiser and adjuster review it to be sure it is reasonable. The Adjuster then works to establish an agreed repair or settlement cost with you or your contractor.
Gone are the days that insurance companies intentionally drag their feet in handling claims. The RI Department of Business Regulation (DBR), attorneys, and public adjusters are drooling over the opportunity to catch a company utilizing “unfair claims practices” The DBR would levy fines and penalties, attorneys would be quick to file suit, public adjusters will work to milk that claim for anything and everything they can squeeze out of the claim.
Despite those considerations, the biggest attention getter for insurance companies is your customer service rating. Insurance is a competitive commodity and companies want your business. Repeated poor grades for claims handling discourages potential customers. Every insurance company -–whether on line, 800 # or local agent based—is going to be different. I can’t say claims handling will be worse from any one, nor can I say pricing will be better from any one. The one real difference you get from a local agent is the ability to reach out and touch your agent. And, that usually matters most when you have a loss.