UPDATED MAY 1, 2019
As New Jersey rebuilds from the massive damage and loss of services from Hurricane Sandy, we want to take this opportunity to give people some tips on how to deal with insurance companies while making a claim for damage to your home or business. The below is just some general information, and not legal advice. If you have any questions and need legal advice, please call us and we will try to assist you as best we can.
Remember That Everything Must Be In Writing
The most important thing to remember when dealing with insurance of any kind is that everything must be in writing. No matter what an insurance representative says on the phone, their decisions of what is and is not covered have to be put into writing. What is in writing may not be the same as what is said on the phone. Use the resources that are available on your insurance company’s website. Often they will make available all sorts of useful information that is stated in writing, so there can be no mistake about what the proper procedures are. You should be hesitant to rely on things that are simply said on the phone rather than put into writing. In fact, if you listen very carefully to what is said by insurance representatives on the phone, they are often non-committal (they say something “may” be covered or they “may” pay for something, etc.).
Familiarize Yourself With Your Policy
If you don’t have your insurance policy with you, you may be able to get access to it on the insurance company’s website. If not, you can always get a copy from your insurance agent or by calling the carrier and requesting it. Always have access to the full policy if you are making a claim. And familiarize yourself with it. Policies are supposed to be written in plain English, which could be understood by average folks – you aren’t supposed to need a law degree to understand what is and is not covered. The basics of the policy are usually easy to understand. Pay attention to the Definitions sections, because certain words have special meanings in the insurance policy. Also make sure to understand the Exclusions – that is the section about things that are not covered (for example a car crashing through your house is probably covered, but if that car was driven by a soldier during armed combat it would not be covered under the Warfare Exclusion). In fact, familiarizing yourself with your insurance policy – homeowners insurance and business insurance – may inform you of things that are covered, which you never knew were covered (for example, business interruption insurance coverage, coverage for spoiled food, damage to personal property inside your home or business, certain types of medical bills, etc.). But for certain situations you may be unclear about what the policy means. In such a case, err on the side of caution and do not assume that the carrier will cover the loss. But you may get advice from your agent, which may or may not be helpful or completely accurate, so exercise caution.
Remember That The Carrier Is Not Necessarily Your Friend
On the one hand, you are the insurance company’s customer. But on the other hand, they only will pay for what they have the legal obligation to pay. They will investigate the claim and try to avoid paying, if they are legally able to do so. You should keep that in mind, especially when you are first reporting the claim. Especially with larger claims, customers may find themselves in the awkward situation of having their insurance company act like their adversary. Which is why you should…
Document EVERYTHING As Soon As Possible; Preserve Your Claim
Whenever you file a claim you need to prove that you are entitled to coverage for the claim. You should immediately work on gathering the proof. For physical damage, take lots of photographs, and video as well, if you are able. Try to avoid using a cell phone for photos and video since the quality is relatively poor. Gather receipts or other proof of the value of items. For business insurances, like coverage for business interruptions, you will need to gather the documents showing the loss of business. You also need to make sure to mitigate your losses – that means that you will need to protect whatever you are able to protect. For example, if there is water entering the property, remove items that you are able to save from damage.
Report Your Claim Right Away, But Use Caution
You will need to report your claim to your insurance company. Do your best to answer the representative’s questions and provide the documentation that they request. If you are unclear about anything, do not be afraid to ask. If they use a term that you do not understand, then ask for clarification. Ask about the procedures and make sure you are 100% clear; preferably they can point you to written procedures to assist you (see above). Choose your words very carefully, and do not pretend that you are an expert. There are many different words and terms that are in your insurance policy that have very specific meanings, so you need to be careful. For example, many people use the word “flood” to describe any kind of water coming into their home or business. But the word “flood” is one of those very specific terms – water from a burst pipe, a hole in the ceiling, broken equipment, etc. are not considered floods are are therefore usually covered under most homeowners policies. What a flood really means is gradual seepage through the foundation, which would almost never be covered without special flood insurance. Again, you are not an expert engineer so do not speculate about whether water damage is or is not a flood. Do not speculate about how a collapse occurred or how property was damaged. Just report the simply facts that you know to be true. And do not say anything that is willfully false to the insurance company, as this is a crime.
If Necessary, Retain Counsel
Always try your best to work things out amicably with the insurance company, but if you have a feeling that things are going south, or if you have questions regarding your rights and responsibilities, do not hesitate to consult with an attorney. Remember, the insurance companies literally have armies of attorneys working to protect their interests. Please do not hesitate to contact us if you have any questions or concerns.