When disaster strikes, the average homeowner automatically thinks to call their insurance company. After all, the thinking goes, I’ve been a loyal customer and they’ll take care of me.
It’s a comforting idea—the big insurance company as benevolent caretaker—but not a realistic one. Too often, homeowners feel disappointed by how their claim is handled by major insurance corporations and betrayed when the insurance payout doesn’t match what they believed they were entitled to.
Before you file an insurance claim for damage to your home, make sure you know these three things that every homeowner should understand about the big insurance industry:
1. Insurance companies are in the business of making money
The public is generally distrustful of big business—Americans are increasingly skeptical of the medical insurance industry, for example. But when it comes to home insurance, we expect the insurance company will have our best interests at heart.
The truth is that property insurance companies exist to make money, like any other business. How do they make their money? By collecting as much as they can in policy premiums and paying out as little as possible. In other words: the smaller your claim settlement, the larger their profits.
It’s important to approach dealings with your insurance company as a business transaction and take steps to protect your own interests.
2. Over half of homeowners who file a claim accept the insurance company’s first offer
When purchasing a car, the savvy buyer knows to pressure the sales manager for a better deal. We expect when we buy a home that the seller might not take our first offer. Yet when a property insurance company says how much they’ll pay out on a claim, too many homeowners shrug their shoulders and take the check.
An experienced public adjuster knows that the first offer isn’t necessarily the final offer—and knows how to successfully negotiate with the insurance company to get you a higher payout.
3. You have the right to be represented by a licensed public adjuster
When you file a claim without representation from a public adjuster, you put the fate of your insurance claim in the hands of the staff adjuster sent out by your insurance company. You are counting on this staff adjuster to help you get a large—or at least fair—payout for your claim. But even if this person has every good intention, he or she ultimately answers to their employer.
It’s nuts when you think about it: If you were seeking damages from a company, would you ask that company’s attorney to represent you? You wouldn’t and it should be no different when it comes to home insurance.
You have the right to be represented by a licensed public adjuster when you file a claim with your insurance company. Why go it alone? Seek representation from an experienced public adjuster who will work to get you the maximum payout from the insurance company.