Unfair Insurance Company Practices - Don't Be Fooled

27 Jul 2007

How did you feel when your insurance company rejected your claim after you had faithfully paid its premiums?

Did it make you angry?

Did you struggle to find a solution?

Or did you just give up?

Don't give up so easily. Your claim may be more valuable than your insurance company has concluded. But you have to act quickly, there are laws which require your diligence.

Considering the resources available to your insurance company which include plenty of legal talent, you have to understand the importance of retaining your own attorney. Find an attorney with as much experience in insurance claims as possible. The policy and the law governing are complicated. Understand that if successful, your attorney fees and costs will be paid by the insurance company.

Here's an example of a common problem which arises from the ordinary automobile insurance policy.

When you apply for coverage you are required to complete an application form. The purpose of this form is for the company to assess the extent of the risk, you as one of its insured, pose for the company. Putting it another way, what will you and your family likely cost your insurance company. Who will be driving the family automobile? How safe are these family members who are at the wheel?

Many application forms are ambiguous. I believe that they are meant to be so that the insurance company can deny coverage if the opportunity presents itself. The first order of business for any insurance company when a claim is made is to determine if there is any reason for it to conclude that there is no coverage applicable. Very often the application is the reason for denial of coverage.

The application used by many companies is ambiguous because it is not straight-forward. It contains a box which is printed in capital letters and reads, DRIVER INFORMATION, then following, "list all persons 14 years or older who are residence of your household". How do you respond? If you have a person 14 years or older in your residence does that include the son and daughter away in college? Or other children who have their own vehicles? Is the company trying to determine who will be driving the family automobile? Or who are all the members of the family who live at the family residence?

Ambiguities by law are construed against the insurance company and are resolved in favor of coverage. The insurance company that denies coverage because a member of the family was 14 years of age and not listed should not win. In addition the company will be required to pay your attorneys fees and costs.

The rule is do not accept a rejection of coverage or any other denials. There is a very good chance you will prevail. An experienced attorney will study the insurance policy, the exclusions, and the endorsements. The insurance company may be in violation of claims settlement statutes which will also permit you to prevail.