My Homeowners Insurance Policy

Its amazing how many most people think they can only make a claim on their insurance policy when a hurricane or fire damage. The average American spends thousands of dollars per year on insurance, including Homeowners, automobile, medical, life, business, disability, umbrella and other coverages. Because most of us never suffer the large losses that everyone worries about, people have very little experience in dealing with insurance companies on large claims. Those that do are often in for a bit of a shock. Delay, the use of complex policy language to deny claims, and substantial underestimating of losses by carriers are common. Many people don’t realize that insurance companies, like banks, earn their profits from investments, stocks, bonds, venture capital and real estate. The profitability of a company depends on how much money they have available to invest. If a company owes X million to all claimants at a given point in time, it can save 8% or more of that per year in investment profits by merely engaging in delay. It can save another 30 to 40% by engaging in low-balling . Another 20 to 30% can be saved by wrongful claim denials on confusing policy language.

Whether an insured will recover for a legitimate claim at all, and the amount he or she will be paid, depends largely on the policyholder’s own knowledge of insurance consumer rights and responsibilities.

Policyholders are often at the mercy of their insurance company. The company wrote the policy, the company interprets the policy, the company evaluates the claim and the company holds the money.

So the policyholder is really at a substantial disadvantage to the insurer. However, there are ways to begin to level the proverbial playing field. To do so, you must familiarize yourself with important principles of insurance law which judges and legislators have fashioned over the years for your protection.