Insurance Claims: You Get What You Pay For
As a company that provides claims adjusting services as part of what we do, it never ceases to amaze me how people react to learning that they do not have coverage for damage they believe should be paid for by their insurance carrier.
People's perception and attitudes towards insurance is really unjustified and mostly avoidable if they would only pay a little closer attention.
A recent study by GfK Custom Research North America indicates that insurance companies compared poorly to other industries when it comes to trust. Interestingly insurers fared better with "influential Americans" than they did for "average" Americans.
This doesn't surprise me in the least, and hence the subject of this post.
Mistrust most often is the result of people's belief that they were "ripped off" or otherwise didn't get what they paid for. In the case of insurance they might not have been paid as much as they believe they were "owed" or may not have been paid at all - a claim denial.
The question is what did they pay for?
Like anything else in life, you get what you pay for with an insurance policy. The biggest difference is that you can't actually see what you are buying at the time of purchase unless you look very closely. So unlike the home or the vehicle that you just purchased, the product isn't as obvious. That is unless you read the contract (the policy).
The product in this case is a promise. And the terms of that promise are spelled out in the policy. "We will pay for this". "We will not pay for that". "Your responsibilities after a loss". Etc.
If you review your policy and find an exclusion that you do not like, or ask your agent if "such and such" is covered you will find that there is typically an endorsement that you can add to your policy. But it cost's money! So many people elect not to spend extra - roll the dice if you will, and then in the event that the "such and such" happens, they are angry with their insurance adjuster, or their insurance carrier when they aren't paid.
The psychology is interesting. I actually believe that in many of these instances they don't initially report a loss because they actually know it will not be paid. Then over time they think about it, and convince themselves that they should be paid and try and figure out a way to perhaps bend the facts slightly in a convoluted way to somehow suggest that their insurer owes them for the loss.
By the time they call their agent or carrier to report the loss they have worked themsleves up to a frenzy and have convinced themselves that they are owed.
When the insurance adjuster delivers the bad news, they are shocked and dismayed, and now fully convinced that all insurance companies are evil and should not be trusted.
While I would never encourage an adjuster to do this, when I first started in this business, an experienced insurance professional suggested with a bit of sarcasm that when an insured is arguing what the policy should pay - just ask them if they have read the policy. Or, ask them to show you where in the policy they believe it states that they are owed for the loss.
Obviously this would only inflame the situation, but the point is that insurers pay what they owe - period. The question is what do they owe. The answer - its in the policy - you get what you pay for.