Common Insurance Settlement Conflicts
Insurance is a common and popular tool for risk management. It gives you protection from unexpected financial losses. If you buy insurance, the insurance company will pay you or someone you choose based on your policy.
So if you have insurance, you can expect a compensation amount from your insurance company after any accidents. The maximum time, there is a negotiation process involved with the insurance company, along with an extensive investigation of your claims. After all of this, insurance companies may still low-ball your claim, and knowing how to proceed can be very important.
When to file your claim
After any accident or damages, you want to file a claim. Filing your claim too early or too late can affect the settlement process.
Before you file any claim, it is necessary to ensure that your damages and medical conditions have stabilized. This is called “maximum medical improvement,” and filing
before your body has reached this level of improvement can mean that some of your potential bills or expenses may be lost in the shuffle. You don’t want to get going on a settlement before you know the full extent of your injuries.
On the other end of the spectrum, each state has its statute of limitations to prevent you from waiting too long to file your claim.
Once you’ve collected evidence and know the full extent of your damages, it’s time to file your claim.
After completing the filing process you may want settlement as soon as possible. But because of some issues it might get late. In this article we write about some of the conflicts you may face during the settlement process.
Conflicts in Insurance Settlement
Low-Ball Settlement Offers:
Insurance companies know you are less likely to fight them on your own. They’re hoping you will accept their first settlement offer because you don’t understand your claim's fair value. Let an experienced personal adjuster negotiate with the insurance company on your behalf.
When denying the insurance company’s initial offer, expect the following actions:
- Prepare for delays.
- Make sure you and your personal adjuster are on the same page.
- The language used in the offer letter may be confusing.
Unfair insurance claim tactics often include an adjuster presenting himself as an “expert” in all matters relating to your case. That adjuster tries to convince you to accept whatever offer they make because they know best. So beware of them and stick to your points.
BAD FAITH CLAIMS
When the insurance companies fail to comply with the terms of their policies or unreasonably delay or deny payment on a claim, they are unreliable. Then the policyholder faces this conflict with the insurance company.
The following list is the reasons to pursue a bad faith claim against an insurance company:
- Failing to instantly and thoroughly investigate a claim.
- Purposely delaying payment.
- Unreasonably denying the claim.
- Ignore to settle a case.
- Failure to fully compensate for your rightful claim.
- Resorting to unreasonable analysis when translating the language of the policy
Whenever any policyholder feels that the company intentionally delays the claim, then creates enormous conflicts with the insurance company.
Lack of Documents:
Whenever you need to file a claim, you have to provide some documents, and without proper documents your claim will not be accepted. Those documents work as proof of your claim.
But sometimes, you may forget, or lose documents that are needed for your insurance settlement process. On the contrary, sometimes insurance companies also require some documents that are not necessary. Mainly they want those documents intentionally so that they can delay the settlement process or use those documents against the policyholder. If this kind of situation occurs during the settlement procedure, both insurer and policyholder face problems. For this reason, you may get the settlement amount late, or your claim may be rejected.
Intentions of The Insurance Company:
Every insurance company wants to run a profitable business. But claims are one of the most significant expenses for the company.
Policyholders always want to get the full settlement of their claims. But insurance companies intentionally set some words so that they can deceive the policyholder.
This situation can lead to an unhealthy atmosphere with one side viewed as using their knowledge and power to cut claim settlements to raise profits, and the other side viewed as perennially seeking to get more out of their claim through exaggeration fraud. Conflicts of interest go into a dangerous slide when these perceptions are left to feed into and reinforce the other.
Many insurers don't sign up for this simple view, instead of seeing a happy claimant as a more profitable long term customer than an unhappy one.
If Your Policy Doesn't Cover Claim:
It may be possible that your policy may not cover your claim. But you already file that. So that time the insurance company will reject your claim. Maybe you think they do that intentionally but actually it is not. So to avoid this conflict you have to read your policy carefully.
Insufficient Insurance Knowledge:
Sometimes people are confused about specific insurance terms and policies such as Insurance Declared Value (IDV), Deductibles, Depreciation, etc. These and several other terms have a bearing upon the final amount given as claim settlement. Insufficient knowledge regarding insurance-related terms leads to false expectations among applicants. For this reason, they might feel deceived if the insurance company settles the claim for a lesser amount than what was expected by the insured while raising a claim.
It is recommended to raise a claim at the earliest. We understand that the applicant might be injured due to the accident or be in a state of shock. However, it is better to raise a claim within three days of the unfortunate event. Stale claims are challenging to process. The incident-application duration varies from insurer to insurer.
Nowadays, most insurance providers are becoming more transparent and claim-friendly. The claim process is continuously updated to make it trouble-free. However, claim applicants also need to be more conscious and careful before raising claims and avoid the above-mentioned common issues regarding claim settlement. Both the claims team and the applicant need to coordinate well for a stress-free claims experience.