It’s no fun haggling with your insurance company over a claim. Here’s how advisors negotiate their way to bigger payouts
Financial advisers love to talk about how they add value. From preparing tax returns to providing career advice to clients’ children, they strive to offer a far-reaching service beyond their basic investment management and financial planning offerings.
When a client seeks insurance or files a claim, certain advisors step in. They provide advice on selecting the best carriers, how and when to report a claim, and tips on negotiating larger claims settlements.
To get started, knowledgeable advisors guide clients through purchasing policies from reputable companies. They monitor insurers by verifying their financial soundness, their regulatory record and their customer service.
Specifically, they assess the credit scores of insurers with agencies such as AM Best Company and Demotech. Since insurance companies are regulated by each state in which they operate, advisers can contact a state’s insurance department to confirm that a particular insurer is in good standing and licensed to sell policies in that state. . They can also track customer satisfaction surveys that measure complaints service.
Thomas O’Connor, a certified financial planner in Huntsville, Alabama, recalls helping a client purchase a home insurance policy from a reliable, highly rated insurance company. The client heeded O’Connor’s advice. When the customer subsequently filed a complaint and received superior service, O’Connor took full advantage.
“We introduced him to what we knew to be a reliable insurance company and we oversaw the whole process,” said O’Connor. “Just this week, he called to rave about how the insurance company responded to a recent claim he filed.”
The real test of an advisor’s worth comes when clients experience a loss and file a claim. Some people may not realize that their advisor can suggest ways to get a larger claim payment.
Atlanta-based counselor Faye Sykes cites the example of a woman in her 40s with three children. After the death of her ex-husband, she sought to receive the death benefit from her three life insurance policies.
To her dismay, the widow discovered that two of the three policies had lapsed for non-payment of the premium. Due to a long-term disability, her ex-husband had stopped paying the bills.
Inspecting the fine print of the policies, Sykes discovered that the ex-husband had sought disability waiver when he initially purchased his life insurance, but never sent the final documents. (A disability waiver frees policyholders from continuing to pay premiums if they become severely disabled.)
“It took about 60 days for everything to be sorted out,” said Sykes. “I involved my wholesaler who works with the insurance company and received all the correct documents. “
As a result, his client ended up receiving $ 750,000 in death benefits. Left on her own, the widow would have ended up with far less money – than just one of the three policies.
“She didn’t know what a disability waiver was,” said Sykes. “People in her situation might assume, ‘Oh, the policy has lapsed’ and think they won’t benefit. But you can’t stop there. Having incomplete documentation can delay things.
Filing a claim quickly almost always works to your advantage, regardless of the type of insurance. But it’s worth speaking with your advisor who can work with you to analyze the policy provisions.
“Notify your insurance company as soon as possible of a claim, but know your deductible first,” said Eileen Freiburger, certified financial planner in Sebastopol, Calif. For example, it may not make sense to file an auto insurance claim for a car. burglary or pebble hitting a windshield, she says, because the coverage may not be great – and your rates may go up later.
Filing a long term care insurance claim is long and complicated. But delaying the tedious process can work against you and your loved one in care.
Echo Huang, a certified financial planner in Plymouth, Minnesota, urges policyholders to be quick when it comes to gathering a doctor’s letter and filling out other forms necessary to submit a health care insurance claim. long duration. Many policies impose a waiting period that typically ranges from 30 to 180 days before benefits begin.
So once you know the policyholder can’t perform at least two of the six activities of daily living (like washing, eating, and dressing), start putting together the documentation to file a claim. “If you don’t report, no one knows when the start date is,” Huang said.
Some counselors are used to helping clients recover from disasters. This is especially true if they live in a high risk area prone to severe storms or forest fires.
Based in Sonoma County, California, Freiburger is familiar with the destructive nature of massive fires. She says that after a total loss, a key question for policyholders is how to ensure that they receive a fair settlement that fully reflects what they are entitled to charge on their home insurance policy.
From her experience advising clients, she found that insurance companies could withhold a seemingly generous amount to move faster to a settlement and close the claim file. It recommends that policyholders proceed with caution.
“Some insurers might say, ‘We’ll write you a check for 50% or 75% of your content coverage, so don’t bother to itemize.’ [the contents you’ve lost]”Freiburger said. But that settlement figure may not be enough if a home had personalized features with antiques, art, and jewelry.
Diligent owners keep detailed records and receipts of content and architectural improvements so that they can accurately calculate the value of what has been lost.
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