Is the “Never Pay” Insurance Policy Making a Comeback? How to Fight It

“Your policy clearly states that any claim you make will not be paid. Unfortunately, you paid for our Never-Pay Policy. This policy is not worth anything if you don’t claim. “

-Mr. Devious wrote Reverend Morrison to complain about the refusal of the insurance company to pay his claim for damages to his car after it was struck by a truck while he was standing in a garage. 1971.

The last article focused on the social and business ills that insurance companies can cause by selling “Never pay” policies to customers. I thought about a utopian carrier that would make clear policies and actually pay claims.

However, this does not mean that carriers will never pay claims. They are responsible in many cases. It seems that some carriers or certain claims adjusters act as though they are selling you a Never Pay Policy. This attitude seems to be growing, at least from what I can see. Unfortunately, the Utopian carrier does not exist, at least according to my knowledge.

This article will provide some insight into the world and tips to help you navigate the complex world of insurance. This caveat must be noted. It is impossible to predict the outcome of future claims and it is impossible to guarantee that your carrier will be fair. Insurance adjusters often make incredibly inventive arguments to deny claims, and I find it hard to believe how many positions they take. However, there are some things that can increase your chances of success. This article will provide some basic information. Next, we will talk about when you might need to consult coverage counsel.

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1. A good broker is essential. Insurance is usually purchased through agents or brokers. Look for an experienced broker with knowledge in the industry. The broker should spend the time with you to get to know your business. The broker must be able to understand your business and what it does. There may be particular risks that you should be aware of. These risks need to be discussed in depth. You may not have thought of these issues when you met with a broker. Don’t trust a broker who doesn’t want to spend the time to learn about your business and assess the risks. Find another broker.

How can you find a reliable broker? Ask around. Do your research about the broker. Learn how many employees the broker has. Although it is not necessary to use Aon or Marsh as your broker, make sure they are well-established. A broker with a small size is also a plus. Why? A broker can sometimes act as your advocate if a carrier refuses to pay a claim. Sometimes it works, but not always. It may be more likely for the carrier to pay the claim if it views the broker as a valuable source of business.

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You might consider writing the broker to inform them of the risks you wish to be covered. It will ensure that the broker is focused on the issue. Ask the broker for information about any endorsements or exclusions the insurer may require. Additional exclusions can be included in endorsements. Discuss all endorsements and exclusions with your broker to ensure that they don’t create gaps in your coverage for any potential risks. If the broker advises you incorrectly about coverage, you could be held responsible if the carrier does not cover a claim.

You cannot purchase insurance online without a broker. In an effort to reduce broker fees and commissions, many insurance companies, especially personal lines carriers (home or auto), are now selling insurance online. I wouldn’t recommend buying business insurance online. However, I would caution you to be cautious about purchasing personal lines insurance online. It is worth finding a good broker.

2. You should verify the carrier. Brokers may suggest one or more carriers. You should verify the financial strength of any carrier. The broker will usually be able to provide financial strength ratings such as A.M. Best and can explain them to you.

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Every broker and every policyholder’s lawyer will know that certain carriers are more efficient at paying claims. Ask your broker for more information. Ask the broker if he would feel comfortable recommending this carrier to its clients. Do your research. You can search for the carrier online. You’ll soon get an idea of the carrier’s reputation.

3. Don’t buy solely based on price, especially in this economic climate. However, if you have to choose between buying a policy at a low price from a carrier with poor reputation or buying a policy at a higher cost carrier with a better reputation, it is important to think carefully before accepting the “bargain”.

You should also make every effort not to compare apples to apples. Your broker should clearly explain any differences between the less expensive and more expensive policies. You may find the cheaper policy partially explicable by higher deductibles, self-insured retentions (the portion of the loss that you have to pay), lower policy limits or endorsements that exclude coverage for certain risks that could be critical to your business.

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4. Keep a copy of your policies with you and other important papers. I’m often asked to assess insurance coverage. A copy of the policy is the first thing that I need. It is amazing to me how difficult it can be in many cases just to obtain a copy.

It is also clear that many businesspeople don’t have a good understanding of the contents of an insurance policy . When I request a copy, often I receive a one-page copy of what’s known as the “decpage”. This is a one-page copy of what’s known as the “dec page” and it doesn’t help me evaluate coverage.

A typical insurance policy consists of three parts. The declarations page (or “dec page”) is the first. It is typically one page, but sometimes it can be two. This page summarizes the coverage types and policy limits. The maximum amount that the carrier will pay is set by the policy limits. The policy limits are usually stated “per occurrence,” which means that the carrier will only pay the maximum amount for one event. Sometimes the limits are “per claim” (or “per accident”), which means that the maximum the carrier will pay for one claim or accident. There are also “aggregate limits.” The carrier’s maximum payment for a given period is known as the aggregate limit. This applies regardless of whether there are “occurrences” and “claims.”

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Important distinctions exist between coverage based on “occurrence” and coverage based on claims. These differences go beyond the scope this article and should be discussed in detail with the broker. General liability coverages are based on “occurrence”. Professional liability coverage for architects, engineers, and attorneys is often written as “claims made.”

The “body” or policy form is the second part of the policy. This is the main portion of the policy. It includes the insuring contract (what the policy covers), exclusions (types of events not covered), conditions for coverage and definitions. This is, in essence the insurance contract. It is what an insurance professional or coverage lawyer will use to evaluate any coverage question.

Any endorsements are the third section of the policy. Endorsements can be used to amend the policy. Endorsements are important because they can significantly alter the rights and privileges of the insured. Endorsements may include additional exclusions. One example is the “fungus exclusions” endorsements. Many carriers added these exclusions after numerous claims for mold-related property damage or bodily injuries were filed several years back.

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Usually, the policy will be sent after it has been purchased. Sometimes it may take longer. The policy must include all endorsements and declarations. It will usually be stapled together.

It’s a smart idea to keep a copy in your office. Why? The policy will be destroyed if there is loss (e.g., a fire) at your business. You can keep copies in a safe deposit container or you could store an electronic copy where it will be remotely backed-up.

It is important to have easy access to your policy. Yes, your broker should be able to get a copy. Yes, you should be able to obtain a copy from your insurer. It is however quite tedious. It is much better to have a copy if you have a claim that could be catastrophic and to consult an attorney about coverage.

5. Review the policy after you have received it. Is it consistent with what you and your broker agreed to? Are there any exclusions or endorsements that could affect coverage that weren’t discussed? These issues should be discussed immediately with your broker.

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The problem with American insurance sales is that policies are difficult to understand. Even a thorough reading of the policy will not be able to resolve every issue. It is a good idea to review the policy and bring any issues to your broker’s attention.

6 Take inventory and take photos. Documenting property destroyed is a big problem for many property claims. It’s a good idea for property owners to create a list of their property, including the purchase price, and take photographs or videotapes. Many inexpensive and simple to use cameras such as Flip video can be carried in your shirt pocket. Even the most inexpensive digital cameras have video capabilities. In the event of a claim, lists and videos can be used to resolve disputes. It is recommended that electronic copies of lists and videos be kept remotely, or that they be backed up remotely.

7. Photograph any event that could lead to a claim. Photograph unusual events that could lead to a claim, such as a hailstorm, and take photos. Photograph the hail and weather events. Use your video camera to capture the event.

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Although it is not ideal, some insurance adjusters will attempt to deny that a weather-related event caused enough damage to warrant a claim. Some may argue that weather information is too general or damage to nearby buildings is sufficient. Even though I doubt that most courts would agree with this approach in the end, photos and videos can help to end the argument.

Some policies may require that certain types of property are separately scheduled. This is true for both personal and business insurance lines. Ask your broker if this applies to you, especially if you own valuable and unique property (jewelry or artwork, unique business machinery, etc.). ).

Conclusion. These are the basics that will make you more prepared to handle a claim than an average insured. I will discuss the details of a claim, and whether you should consult an attorney about insurance coverage.