Insurance companies and paying claims

electrathon · Oct 8, 2015

I keep seeing people comment here that an insurance will not pay a claim if things are not proper. My question is has anyone here ever actually seen a company deny a claim and get away with it in the end? I have been told by my agent (more than one agent at more than one agency over the years) that they are responsible for the claim no matter what. They may drop you as a client after the fact, but they will be paying the claim no matter what. They will threaten you with claim denial to scare you, but that is simply a hollow threat. I live in Oregon and possibly the rules are different in other states. I am not talking about crimes like terrorism, rather carelessness or neglect of proper safety and construction standards.

Look at it like this. If you were driving your car, and speeding (it is common, but without question against the law) and you cause an accident your insurance company will pay. You were doing something unlawful at the time, but the insurance company still pays. Maybe you are driving with bad tires, poor or failing brakes, your insurance still pays when there is an accident, even though your car was unsafe to be on the road.

Insurance companies threaten people often, but that does not mean that we have to listen to them. As long as they take your money they have to provide insurance.

BrotherBart · Oct 8, 2015

Never seen a claim denied or read here about it happening. I could picture it happening if a stove burned the joint down and they hadn't been advised that there was one in the house though.

TimfromMA · Oct 8, 2015

All I did was notify my insurance company that I had a pellet stove installed. They did not raise my rates and told me that since I pulled a permit for the install and had it inspected, they would pay a stove related loss. There was also no increase in premiums.

DougA · Oct 8, 2015

It all comes down to the EXACT language in your policy. Very few people are able to read your policy and understand how it will apply in all circumstances. I even had a lawyer misinterpret a policy once.

I absolutely know of a number of cases where there were questions of the owner not having things legitimate and had their claim either delayed many months or denied completely. When I had my power line pulled down in a wind storm 3 yrs ago, the adjuster refused the claim, saying I was not covered and it was up to me to read all the fine print and prove him wrong. He assumed I had a normal policy and had not even bothered to read my coverage when he said that.

The easy answer is to do a Google search on the vast number of denied claims for Sandy and Katrina.

If you knowingly have a defective stove installation and they can prove it, I would never count on insurance paying a claim.

FWIW, be careful what you post here as an insurance company could search this forum (or any others) and find out you were posting about problems. If they want to deny your claim (that's the important point) they will go to great lengths to screw you.

bholler · Oct 8, 2015

It can and does happen. Generally the reasons for claim denial are gross negligence. A small code violation usually will not result in a claim being being denied. But really like douga said it comes down to the wording of your policy. It is much more common that a contractor didn't do something right and your insurance company goes after them for the money but either way if you had a contractor do it the claim will be paid. I have also dealt with insurance companies that pay claims with little or no questions asked.

ddahlgren · Oct 8, 2015

I suspect if you don't meet NFPA code or manufacturers directions from UL testing all bets are off permit or not.

bholler · Oct 8, 2015

ddahlgren said:
I suspect if you don't meet NFPA code or manufacturers directions from UL testing all bets are off permit or not.

With some companies yes with some no some it would have to be a serious violation some only take a minor one. And like i said some don't even check

firefighterjake · Oct 9, 2015

Ummm . . . kinda . . . parents had a fire that burned their house down. Cause of the fire was determined to either be faulty wiring to their OWB that he had installed or a hot coal that had come out of the boiler when the door was open that rolled up against the wooden structure my father built around the OWB (personally, I suspect it was the hot coal.)

The issues my parents had however were not directly related to the installation and use of the OWB, but rather by the fact that they had installed the OWB as their primary heat source and had not informed the insurance company (along with the fact that they had also done a lot of other work on the home over the years -- adding an indoor pool for example -- without notifying the insurance company.)

In the end the insurance company kept them on the hook for a long time before paying out . . . and because they did not reveal the changes to the insurance company the adjuster refused to give them the full dollar replacement value, but rather gave a simple pay out.

DanCorcoran · Oct 9, 2015

I tnink insurance companies also distinguish between a homeowner's lack of knowledge about a particular situation and outright fraudulent intent. Knowingly concealing relevant information would seem to be a bad idea. I want my insurance company to know the risks I represent, so that when I pay them I can expect full coverage.

But then again, I use USAA, which is generally considered one of the top 2 or 3 insurance companies in the country, as measured by customer satisfaction with claims.

bholler · Oct 9, 2015

DanCorcoran said:
I tnink insurance companies also distinguish between a homeowner's lack of knowledge about a particular situation and outright fraudulent intent. Knowingly concealing relevant information would seem to be a bad idea. I want my insurance company to know the risks I represent, so that when I pay them I can expect full coverage.

I agree most are that way. But i have come across some professionally that are looking for ways to get out of claims any way they can. But honestly they are the minority. The problem is how do you know which you have till you make a claim.

begreen · Oct 9, 2015

One thing one can do is check ratings, though these are often just for national companies.
http://www.jdpower.com/ratings/study/US-Property-Insurance-Claims-Study/471ENG

3650 · Oct 9, 2015

cant comment on fires but a tornado tore all the shingles off my roof and the tin off my garage. Country Companies sent an adjuster out and he tried to write me a check for $1400. I told him he needed to sharpen his pencil and send out an adjuster that knew what they were doing. The next adjuster wrote a check for $8000 and it cost $12,000 to complete the job. It took me another year and a half to get the rest of the money out of them. Once I did I promptly cancelled them. I really don't think it matters how the damage occurs. Prepare yourself for a fight.

electrathon · Oct 9, 2015

3650 said:
cant comment on fires but a tornado tore all the shingles off my roof and the tin off my garage. Country Companies sent an adjuster out and he tried to write me a check for $1400. I told him he needed to sharpen his pencil and send out an adjuster that knew what they were doing. The next adjuster wrote a check for $8000 and it cost $12,000 to complete the job. It took me another year and a half to get the rest of the money out of them. Once I did I promptly cancelled them. I really don't think it matters how the damage occurs. Prepare yourself for a fight.

Good response. It is not the structures so problems, it is the insurance companies. People fall for it.

Jazzberry · Oct 9, 2015

I am a retired General Contractor that specialized in insurance repair in CA. The average homeowner accepts what the claim rep offers. The average first offer from a claim rep can be 100 times less than what a professional can get for the same loss. Not exactly cheating but close. One thing for definite sure is that the first check or offer will be less than it will take to make you 100% whole unless it is for something like a single item replacement.

DanCorcoran · Oct 9, 2015

A locust tree fell on my cabin. USAA sent an adjuster from Crawford Co. They assessed $7,000 damage. A local contractor repaired the damage for $7,000. No muss, no fuss. That's why USAA is highly ranked.

Jazzberry · Oct 9, 2015

Contractors that don't specialize in insurance work fall into the same group as homeowners that accept the first offer. They don't know any better. Jobs can be adjusted to a budget up or down.

ddahlgren · Oct 9, 2015

The indoor pool is a good example of why you don't get a full payment. If you expose an insurance co. to a larger liability to see if they have to adjust the cost to cover it then have a loss they should ignore it as an unknown liability. If you don't tell them what they are insuring they should only be liable for what they have been told exists. You can't describe a 3 million dollar house in the Hollywood hills as a cute cabin in the hills and if burns down expect 3 million with a 1500 a year premium as an extreme example.

DanCorcoran · Oct 10, 2015

Jazzberry said:
Contractors that don't specialize in insurance work fall into the same group as homeowners that accept the first offer. They don't know any better. Jobs can be adjusted to a budget up or down.

~~But if the job is done right, with no hassle, and no out-of-pocket except deductible, who cares?~~

But the job was done right, with no hassle, and no out-of-pocket except deductible, so I really didn't care.

mass_burner · Oct 10, 2015

I suggest finding a good private adjuster if you have a substantial claim. It really worked out for us, the amount actually covered ended up being more than 3x that was initially offered.

brenndatomu · Oct 10, 2015

electrathon said:
Look at it like this. If you were driving your car, and speeding (it is common, but without question against the law) and you cause an accident your insurance company will pay. You were doing something unlawful at the time, but the insurance company still pays. Maybe you are driving with bad tires, poor or failing brakes, your insurance still pays when there is an accident, even though your car was unsafe to be on the road.

Or do your own auto repairs...same as DIY stove install, no? Or using aftermarket ("non approved") parts...you don't hear of ins co checking up on that stuff (generally) I would bet that most people would not have too much trouble from ins co if there were a stove/chimney related fire (IMO obviously)

Insurance companies and paying claims

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