Insurance is a frustrating necessity of adult life that never involves happy experiences.
You certainly can't be excited about buying insurance. You're essentially making a bet that something horrible is going to happen, and you'll need plenty of money to offset the loss. (The insurance company is making the opposite bet, by the way.)
If you "win" your bet, you're automatically losing in some other way -- whether your claim is for an auto accident that wiped out your new SUV or for a tree that suddenly toppled on your house.
That's why it's important to understand as much as you can about your rights as a policyholder and what to do if you suspect that your rights are being violated.
Basic coverage rules
- If your homeowner's policy has been in effect for at least 90 days, your policy cannot be canceled because of a sudden dip in your "creditworthiness."
- Florida's Department of Financial Services can help you figure out some tough issues and where to get help.
- Your policy can't be misrepresented by the agent (like telling you flood damage is covered when it isn't) or changed without written notice.
- Your insurance can't game the system by withholding payments in order to push you into settling another portion of the policy. One example would be where an insurer refuses to pay your medical bills unless you agree to sign a waiver foregoing all rights to a personal injury case.
- Companies cannot purposefully delay payments by asking for useless forms, routinely appeal verdicts without good cause or generally deny claims unless they are appealed. That's acting in bad faith toward the insured and an unfair business practice.
There are, naturally, other rules in place that protect consumers. Remember -- if something seems wrong to you, it's time to ask questions.
Handling a problem
If you have a problem with your insurer, there are several steps you can take to resolve the issue:
- Talk to your personal insurance agent. Customer retention is often important to agents when you have a long-standing relationship.
- Put your complaint in writing. Make sure that you include all necessary information (like your policy number, the claim number and the specific dispute involved).
If all else fails, get an attorney involved. Sometimes, that's the only way to resolve stubborn and unfair insurance disputes.
Source: 360 Degrees of Financial Literacy, "Handling A Dispute With Your Insurance Company," accessed Nov. 03, 2017