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Sunday, November 29, 2009

7 Insurance Myths That Can Cost You Big Time

Myth #1-Replacement Cost-Reality: Usually, replacement cost coverage ONLY covers the depreciated value of your damaged possessions. In this case, you'll have to come up with the extra cash to buy new replacemnet items. Plus, many times you'll have to do it in 12 months from the date of the loss. What You Should Do: Check the time limit. Check with contractors and ask if they are willling to work with your insurance company to recover the full cost. For damaged contents, replace some items quickly and file a claim. Then use the insurance settlement money to replace more. Myth # 2-Insurers Only Replace The Damaged Sections-Reality: If replacing a damaged section of your home creates a visible difference between the replaced section and the old section, the insurer MUST replace the undamaged areas as well. What You Should Do: If your insurer tries to dodge responsibility to replace undamaged sections, write a letter to the adjuster stating what should be covered by the policy. Then add: " It is my understanding that in accordance with the line-of-sight-rule, I'm also entitled to replacement of the siding on the south and west side of my home as well. If you have any doubts about this, please refer to your Fire, Casualty and Surety( FC&S) Bulletins and get back to me." Most adjusters usually back off when policy holders cite this trade publication known by few outsiders in the insurance industry. Myth # 3- You Have To Live With The Work The Auto Repair Shop Mandated By Your Insurer Reality: Right after your insurer's mandated repair shop finihses its work, take the vehicle to a dealership service department and request an evaluation of the damaged area. If the vehicle was in a serious collision, request a 4 wheel alignment. These types of alignments usually uncover lingering problems with vehicles that have been in collisions. Share your findings with your insurer, and say, "You warranted these repairs, so take my car back and fix it properly." Myth #4-My Car Is Covered By Any Driver - Reality: When you lend your car out, it depends on the policy. Some insurers now provide coverage only to drivers specifically named on the policy. So before you lend your car out, check with your insurer. Myth # 5 - It's OK To Call Your Insurance Company To Inquire About Small Claims- Reality: Your insurance company wll open a claim as soon as you call the claims department even if you don't persue payment. What You Should Do: Don't call your insurance company unless its going to cost you more than your deductable. Myth # 6 - Independent Insurer Adjusters Are Fair- Reality: An adjusters job is to look out for the insurance company whether he or she works for the insurer or is independent. He or she will pretend to be your friend and try to steer you towards repairs instead of replacing the damaged areas. The only exception to this rule is when you're dealing with company adjusters from Chubb or Amica who are pro customer. What You Should Do: If you feel an adjuster is not being fair with you, hire a public adjuster. In fact, most public adjusters will tell you that you should contact them FIRST before you call your own insurance company! Reason? They can get you more money before your insurance company has a chance to downplay the claim and offer you a paltry sum! Public adjusters represent policy holders in their negociations with insurance companies. However, they are not all created equal. So when you decide on which one you will call, make sure you check out the adjuster's reputation at www.BBB.Org Public adjusters can be found in the yellow pages under "Insurance Adjusters" or "Adjusters-Public" or through the National Assocation of Public Adjusters. Call 703-433-9217 or go2: www.Napia.Com Public adjusters usually charge 10% to 25% of the total claims settlement which you should negoiate before you sign a contract.Myth # 7- You Can Cancel Your Insurance By Not Paying The Bill - Reality: Insurers usually give you a 30 day grace period before coverage is terminated. Policyholders are legally responsible for premiums charged during the grace period even if you have no intenion of continuing with the coverage. So its better to call and cancel a policy you no longer need.