She sat on the concrete foundation holding a hand drawn picture of the family dog, tears streaming down her face as she surveyed what was left of her home. The smoldering embers still gave off heat and smoke bearing witness to the intensity of the fire which ripped away one of the most cherished possessions she could ever have hoped for. The hand drawn picture done by her daughter in kindergarten and the badly damaged fireplace chimney were the only things left other than the foundation outlining where the home had stood–a dreaded scene none of us would ever want to experience. Yet, unfortunately, many have had to endure this tragedy. Fortunately, in the midst of this experience, you have some rights to help you cope.
Right to Dignity
This may seem to be a trivial thing to be considered during such a time; but the trauma of having to deal with all the prying fire reports, possible arson investigations, listing of personal items lost in the fire, overworked and underpaid insurance adjusters questioning your itemized losses, upheaval in daily routines, change of living venue while repairs are done, questioning of cause of loss, slowness of the construction process, replacement of personal belongings, etc. can have a major impact on a person’s psychic.
Unless you maliciously and fraudulently caused the loss, you should never have to be questioned or feel the need to justify the loss to anyone. It can and does happen to the most careful and safety conscious homeowner. Unfortunately there are certain insurance reports containing questions regarding the loss which help determine the cause and extent of the fire, listings of personal belongings and values so proper monetary remuneration can be met, and construction repair estimates submitted so reserves can be established. You can expect these, but you should not have to endure any questioning of your character. If you feel you are not being treated respectfully, your state Department of Insurance has a consumer complaint division to assist in such a circumstance.
Most insurance companies want to have a good rapport during the claim process, and most train their adjusters to treat people with respect; but sometimes things do go crosswise and a third party like the department of insurance can help mitigate misunderstandings.
Right to Choose Contractors
In today’s building boom many have picked up a hammer and with a little building experience have engaged in this profession. With a lumber rack on their pickup and a sign on the pickup door they hold themselves out as a potential builder of your home.
Some insurance companies in an effort to keep some controls on cost, maintain a degree of quality, and be assured the contractor can complete the job have made arrangements with local contractors to build houses for their insurance clients. This is especially prevalent for contractors who do remodels of partial damaged structures. Water, wind, fire, and vandalism claims all have unique characteristics when it comes to repairs, so estimates for the same job can be quite different. Having had some past experience with a contractor gives the insurance company some peace of mind knowing that the contractor meets a certain level of competence, and they will refer you to one of those contractors. Some individuals have been reluctant to use these referred contractors because they feel the insurance company is referring them simply to save money and would turn an eye from the quality of work being done. Remember, you are the one who has to agree to the quality of work being done, so if the contractor demonstrates the ability to do quality work then the savings to the insurance company should be of little if any consequence.
In the end what the insurance company desires is to be able to review the potential money loss and simply indemnify you for the loss. They do not want to be in a position where they are held responsible for the workmanship outcome or the quality of the replaced personal belongings.
This being the case, even with referrals you have the liberty to choose who will be the contractor and have the right to supervise what is being done.
Right to Same Kind, Quality, and Workmanship
This right makes the handling of claims so much easier since you don’t have to worry your stolen Rolex is going to be replaced by a Timex, the granite countertops are going to be replaced with a laminated covering, the memory foam mattress will be replaced with a bargain basement mattress, or your metal roof is going to be replaced with asphalt shingles, nor the cedar siding on your home replaced with T-11 or tar paper.
Here is where most frustration and conflict occurs when there is a loss. Unfortunately, the Timex watch which was lost becomes a Rolex, laminated countertops become granite, and the bargain basement mattress upgrades to a memory foam mattress. It is a good practice on claimant’s part to treat the insurance company with the same dignity and honesty they want to be treated with. If an individual is tempted to hedge on the items lost or their values it is well to keep in mind fraudulent claims have criminal consequences and things just go from bad to worst. The Golden Rule should be the watchword of the day.
Along with the right to like kind and quality, most modern homeowner insurance policies give you an option to pay extra premium for a “guaranteed replacement” provision. This provision states if there is a loss from a covered peril you will receive claim settlement on current values rather than on depreciated or actual cash values of items damaged or stolen. This provision removes the ever stressful task of trying to remember purchase dates and purchase values. It just requires on your sworn proof of loss you owned the item in question and what it would cost to replace it. If you choose not to pay for this additional benefit, you still have the right to replacement with like kind, quality, and workmanship, which should put you back in the same position you were in prior to the loss.
Right to Approve Work Being Done
Even though most conversations regarding details of a claim will be handled by the contractor and the insurance company adjuster, you have every right to be involved to the extent you desire.
This may be a good juncture to address the insurance agent’s role in the claims process.
You look upon the person who sold you your insurance policy as being your agent to represent your case to the insurance company. This may be the case, but the agent legally is a representative of the insurance company licensed to sell its products. The agent has no authority to interpret the meaning or definition of terms beyond the written policy contract. He or she can express his/her opinions if there is a conflict during a settlement but have no authority to change how the settlement is to be negotiated. It is a difficult position for an agent to be in when he or she feels a client isn’t being handled like they feel they should be. It is a wise agent who will listen to your concerns and try to help you see why a settlement is being handled in a certain way while at the same time discussing with the adjuster your viewpoint and trying to persuade him or her to take a different approach to the settlement. Harsh as it may seem, when push comes to shove, the agent is expected to support the company to the extent it is acting professionally and within the contractual points of a policy. A professional agent will do all he or she can to make sure your interest is being met, so express your concerns knowing the limits the agent is working under.
Going back to your right to approve work. Again, the insurance company has the responsibility to indemnify those who are parties to a loss. With your approval on inspecting the work and the quality of it, the company may make payment to those doing the work. In some instances, they may pay directly to the contractor, but most likely the company will make out the check to the contractor and you jointly. This allows you to control the purse strings and not sign off on the check until the work is completed to your satisfaction.
When you purchase a homeowner policy you are exercising your faith the company will stand behind the provisions of the contract. When you have a claim the insurance company is exercising its faith you will submit an honest claim report. When these two acts of faith are exercised then the rights of both parties are activated for the benefit of both.
Let’s hope you never experience what the lady experienced at the beginning of this article; but if you do know there are rights you have to soften the consequences of the loss.