For most people, the property insurance industry is a complete mystery. You might know that you pay your premium every month and that if something happens, you file a claim and get some sort of payout, but do you understand actually how insurance companies make money and maximize profits?
The answer might surprise you and will help you see why it is so important to look for help when you are filing a major claim in order to get the largest payout possible from your insurance companies.
How do insurance companies make money?
The answer to this question might sound quite simple – you pay them a premium every month to have insurance. However, how insurance companies make MORE money is a little more complicated. Think about it this way: every time that an insurance company collects a premium, they make money. Every time an insurance company has to pay a claim, they lose money. This means that there are two ways that insurance companies can help their bottom line. They can either collect more money in premiums (which most won’t do in order to be competitive in the marketplace), or they can reduce how much money they pay out in insurance claims.
This is a HUGE conflict of interest for you as the policyholder. This means that the insurance company earns LESS by giving you a fair settlement on your insurance claim. This means they don’t have your best interest in mind when they are helping you with your claim.
Is it legal for them to purposely give you less of an insurance claim?
Reducing the amount that an insurance company gives you in a settlement on purpose is illegal, but that doesn’t mean insurance companies haven’t found other ways to do this.
The first way they do this is by making the insurance claim process extremely complicated and hard to understand. By doing this, they hope you make a mistake in order to take advantage of an incorrectly filed claim.
Secondly, they include a LOT of red tape in their contracts giving them outs in a lot of situations.
Lastly, by sending their own insurance adjusters to assess the damage, they claim to get an expert opinion when in reality that person has the same goal as the insurance company – to make you get the lowest settlement possible. This is why it is important to know how to properly document your property loss. So while it is technically illegal for them to purposely reduce your settlement, there are other ways they find to keep those payouts as low as possible?
What should be my first step when filing an insurance claim to make sure I am treated fairly?
Your first step should always be to get an expert in your corner that is actually fighting for YOUR best interest, not the insurance company’s interest. You need someone like a public adjuster to help you with your claim and let the insurance company know that you mean business and won’t take anything lower than what you deserve.
Here at Fortitude Public Adjusters, we have over 20 years of experience dealing with insurance companies and helping our clients get the maximum settlement for their claims. We know all the tricks that insurance companies try to pull and can help you prepare for them before they happen.
With someone fighting for you, you are much more likely to get a higher settlement and get back to your life much sooner!