Keeping the Insurance Company in Check After an Auto Accident

There’s nothing more frustrating than having to deal with your car insurance company after an auto accident, whether you caused the crash or were the victim.

It’s even more frustrating when your claim is denied by your car insurer. No matter what information you provide, your auto insurance company can put up road blocks, so to speak, to avoid paying your claim.

Reasons for denial

Insurance companies offer plenty of reasons why they deny claims from policyholders. Some of these reasons include:

1. The driver who caused the accident did not report the crash to his insurance company.

2. You were late in making a premium payment, and therefore, the auto insurance expired.

3. The insurance policy does not cover the claim. While auto insurers are sometimes slow to review claims, they are quick to review the policyholder’s insurance coverage to determine whether the damages caused by the accident are included in the policy.How to avoid claim denials

There are other reasons why insurance firms deny claims. Things to do to stay a step ahead of them and take away their reasons to deny your claim are:

1. Review your insurance policy to make sure the claim that you are about to file is covered under your policy. It is a good practice to review your policy every year to determine whether the insurance company made changes to your policy.

2. Document any property damage or personal injuries, as soon as possible, if you are in a car accident.

3. Maintain all medical documents, such as physician reports, medical bills, prescriptions, directly connected to injuries that you received in the accident.

4. Obtain a copy of a police report or other related documents if the auto accident warranted an extensive police investigation.

5. Obtain documents to show proof of wage loss, lifestyle adjustments or any other kind of changes due to the accident.

Even with having complete auto insurance coverage and documents, an insurance company can still deny a claim and refuse to cooperate with you to resolve the matter. If you are denied and believe that you are entitled to compensation, you can talk with someone in authority at the insurance company, take it to an arbitrator or go to small claims court. Another way to get satisfaction is to contact a car insurance dispute attorney. This could come in the form of an accident lawyer.

These attorneys specialize in settling disputes between insurance companies and policyholders. More importantly, they are aware of the excuses auto insurers use to avoid paying out a claim. In reviewing a client’s claim, an experienced accident dispute attorney can determine whether an insurance company acted in bad faith by denying the claim or undervaluing the claim.If dispute resolution does not work, the attorney may advise litigation against the company. Insurance firms are more than likely to settle a claim and cooperate with an car insurance dispute attorney rather than go to trial.

There are times when accidents cannot be avoided, which is why you should prepare yourself for these unexpected inconveniences. Learning all you can about your insurance co. and going over your insurance policy prior to any accident may be more beneficial to you than you think. After thoroughly examining your policy, you may decide to switch to another auto insurance company.

How to Research Insurance Companies

Before you subscribe an insurance you need to understand how insurance companies work. To help understand that we have provided a detailed explanation of Insurance Companies Business Model based on internet research and talking with some friends that are experts and work on the insurance professional field. Let’s breakdown the model in components:

  • Underwriting and investing
  • Claim
  • Marketing

Underwriting and investing

On raw terms we can say that the Insurance Companies business model is to bring together more value in premium and investment income than the value that is expended in losses and at the same time to present a reasonable price which the clients will accept.

The earnings can be described by the following formula:

Earnings = earned premium + investment income – incurred loss – underwriting expenses.

Insurance Companies gain their wealth with these two methods:

  • Underwriting, is the process that Insurance companies use to select the risk to be insured and chooses the value of the premiums to be charged for accepting those risks.
  • Investing the values received on premiums.

There is a complex side aspect on the Insurance Companies business model that is the actuarial science of price setting, based on statistics and probability to estimate the value of future claims within a given risk. Following the price setting, the insurance company will consent or refuse the risks using the underwriting process.

Taking a look at the frequency and severity of the insured liabilities and estimated payment average is what ratemaking at a simple level is. What companies do is check all those historical data concerning losses they had and update it on today’s values and then comparing it to the premiums earned for a rate adequacy assessment. Companies use also expense load and loss ratios. Simply putting this we can say that the comparison of losses with loss relativities is how rating different risks characteristics are done. For example a policy with the double losses should charge a premium with the double value. Of course there is space for more complexes calculations with multivariable analysis and parametric calculation, always taking data history as it inputs to be used on the probability of future losses assessment.The companies underwriting profit is the amount of premium value collected when the policy ends minus the amount of paid value on claims. Also we have the underwriting performance A.K.A. the combined ratio. This is measured by dividing the losses and expenses values by the premium values. If it is over 100% we call it underwriting loss and if it is below the 100% then we call it the underwriting profit. Don’t forget as part of the Companies business model there is the investment part which means that the companies can have profit even with the existence of underwriting losses.

The Float is how insurance companies earn their investment profits. It is amount of value collected in premium within a given time and that has not paid out in claims. The investment of the float starts when the insurance companies receive the payments from the premiums and end when the claims are paid out. As it is this time frame is the duration from which the interest is earned.

The insurance companies from the United States that operate on casualty and property insurance had an underwriting loss of $142 Billion in the five years ending on the year of 2003, and for the same period had an overall profit of $68 Billion consequence of the float. Many professionals from the industry think that is possible to always achieve profit from the float not having necessarily a underwriting profit. Of course there are many thinking streams on this matter.

Finally one important think you should consider when subscribing a new insurance is that in economically depressed times the markets have bear trends and the insurance companies run away from float investments and causes a need to reassess the values of the premiums which means higher prices. So this is not a good time to subscribe or renew your insurances.

The changing on profit and nonprofit times is called underwriting cycles.

Claims

The actual “product” paid for in insurance companies industry are the claims and loss handling as we can call it the materialized utility of insurance companies. The Insurance Companies representatives or negotiators can help the clients fill the claims or they can be filled directly by the companies.

The massive amount of claims are employed by the claim adjusters and supported by the records management staff and data entry clerks within the Companies claims department. The classification of the clams are made on severity criteria basis and allocated to the claim adjusters. The claim adjusters have variable settlement authority according to each ones experience and knowledge. After the allocation, follows the investigation with collaboration of the customer to define if it is covered by the contract. The investigation outputs de value and the payment approval to the client.Sometimes a public adjuster can be hired by the client to negotiate an agreement with the insurance companies on his behalf. On more complex policies where the claims are hard to manage the client may and normally uses the a separate policy add on for the cover of the cost of the public adjuster, called the loss recovery insurance.

When managing claims handling functions, the companies tries to steady the requirements for customer contentment, expenses of administrative and over payment leakages. Insurance bad faith usually comes from this equilibrium act that causes fraudulent insurance practices which are a major risk that are manage and overcome by the companies. The dispute between the clients and insurance companies often leads to litigation. The claims handling practices and the validity of claims are the escalating issues.

Marketing

Insurance Companies use negotiators and representatives to initiate the market and underwrite their clients. These negotiators are bond to a sole company or they are freelancers, which mean that they can rules and terms from many other insurance companies. It is proven the accomplishment of Insurance Companies goals is due to dedicated and tailored made services supplied by the representatives.

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How to Select the Right Car Insurance Company?

Car insurance is mandatory for all car drivers and they should have at least the minimum coverage limits for car insurance that the state law demands. You should also consider additional coverages like collision coverage, comprehensive coverage, uninsured/underinsurance motorist coverage, medical payments coverage, etc. At the same time, it is very important to select the right car insurance company. You have to ensure that the insurance company is reliable and would treat you properly when you file any claim on your car insurance in case of an auto accident.

Visit the Website of Department of Insurance of Your StateEach state in the U.S. has a separate department of insurance and the department would have its own website. Such websites normally publish complaint ratios by consumers for all the insurance companies operating in that state. This ratio would give you an idea how many complaints that any company has received per 1,000 accident claims filed with the insurance company. Experts on auto insurance assert that you should compare the complaint ratios of several companies to decide about their reliability.

Compare Car Insurance Rates of Several Companies

All these companies have their own websites and it is very easy to obtain the cost of coverage for various types of coverages by visiting their website. You should get hold of the premium quotes of as many companies in your area as possible.

Comparison of Auto Insurance Quotes and Complaint Ratios

When you have this list of such companies with lowest quotes, you should compare their complaint ratios. These companies that are able to offer the lowest quote and are also low in complaint ratios are the ideal companies that you could personally approach. At the same time, you should not decide by the complaint ratio of an insurance company in your state. That insurance company might have lower complaint rates in your state but have very high complaint rates in many other states. It is always better to avoid such companies always. Hence, your search for complaint rates should be a national comparison and not just your state alone.Enquire with Auto Repair Workshops

Auto repair workshops that you know very well are also a good source to select a company for auto insurance. They interact regularly with these companies for car repair claims and they would be able to inform you about the companies that have smooth claim processes.