Filing an insurance claim is often directly preceded by a traumatic event in your life. So the last thing you need is a fight with your insurance company to force it to pay. But you can take steps at every point in the process -- and even before a traumatic event occurs -- to help make sure you get satisfaction.
Says Angelyn Treutel, an independent insurance agent in Bay St. Louis, Miss.: “People who do some planning are going to get through the claims process most easily.” She has plenty of experience with tricky claims: In 2005, Hurricane Katrina’s storm surge engulfed her town and left her house in 12 feet of water. It was about a year and a half before Treutel could move back into her home, and at the same time she was helping clients get their claims paid, too.
Technology has helped smooth the claims process since then, says Treutel. Smart-phone cameras, insurers’ apps, Web tools and other resources can help you prepare before a claim, submit information and gather evidence to support your case if your claim is denied.
Even if you take preventive measures plus steps to file a hassle-free claim, you could find yourself losing a tug of war with your health, homeowners or auto insurer over how much it will pay. These tactics will help you fight back.
Health insurance claims earn the title of most complicated because you must deal with the complex relationship between your health care provider and your insurer. It doesn’t help that doctors and hospitals provide different deals for each insurer.
You’ll avoid many hassles if you know what your policy does and doesn’t cover -- and what it requires. For example, do you need to get preapproval to go to certain facilities? “You don’t want to wake up in the middle of the night with severe abdominal pains wondering if you’ll be covered in the ER automatically or if you have to notify your insurance company first,” says Tom Bridenstine, Virginia’s managed-care ombudsman, who helps people with claims questions and assists in appeals.
Also, find out how much your out-of-pocket costs will be for an out-of-network provider. Charges for such visits are a common source of complaints because the co-payments as well as the total cost may be higher than with in-network providers. And the claims process may not go as smoothly because the out-of-network provider hasn’t set up an electronic claims link with the insurer, says Ingrid Lindberg, of health insurer Cigna.
If you have questions about coverage for out-of-network care, call your insurer and “note the date and time, the person you spoke with and a brief summary of the conversation,” says Bridenstine. “I’ve seen that kind of detail help win many appeals if the rep from the insurance company inadvertently gave the wrong information.”
When you have a claim, compare the form you get from the doctor (called an encounter form) and the doctor’s bill with the insurer’s explanation of benefits (EOB). “Never pay a doctor’s bill until you get your EOB,” says Pat Pane, a medical claims specialist in Wilmington, N.C. The doctor’s office may have sent you the bill before filing the claim with the insurer.
How to fight back: A denied claim could just be an administrative problem. The insurer may need more information from the doctor, or wrong codes may have been entered somewhere along the paperwork trail. If addressing those items doesn’t solve the problem, don’t waste your time with “repeated phone calls over weeks and months,” says Bridenstine. “Go into the official appeal process.” That forces the insurer to respond in a timely manner. The denial letter usually outlines the appeal procedure.
Call your state insurance department for guidance before you file an appeal (find a link to your state’s department), especially if the claim is for a large sum of money. Be prepared to provide evidence from your doctors about why the procedure was medically necessary or why you needed to go out of network for care. If you aren’t happy with the results of an internal appeal, your state may offer an external appeals process with third-party medical experts.
Sometimes you need to provide extra paperwork if you have trouble getting some of the claim paid. Bridenstine recently helped a Staunton, Va., man file an appeal contesting a $37,013 bill he got from Mayo Clinic for prostate cancer surgery -- in addition to the $2,246 he paid for his deductible and co-payments -- after he had contacted his insurer for permission to go out of network for the care. The patient worked with Bridenstine to file an appeal with his insurance company. The appeal included information from his doctors justifying the medical need to go out of network, and his balance due was lowered to $437.
You can get extra help from a claims specialist. These professionals can help organize your claims paperwork, deal with the insurer, spot errors, collect extra documents from doctors, and help you file an appeal. Find one at www.claims.org. Expect to pay about $130 to $150 per hour.
Insurers used to recommend making long lists of every item in your house and storing the records in a safe-deposit box. Now you can take a video of everything -- including your possessions and architectural details—with your smart phone and e-mail it to yourself. The Insurance Information Institute’s home inventory app (at KnowYourStuff.org) and the app from the National Association of Insurance Commissioners make it easy to save the information.
When you have a claim, gather as much information as you can as soon as possible. “Make sure you’re not putting yourself in danger, but take as many pictures as possible and take notes,” says Derek Ross, an independent insurance agent in Tarzana, Cal. In traumatic situations, it can be difficult to recall all the information later.
It helps to photograph the source of the damage, such as the source of a water leak, says Patrick Gee, senior vice-president of personal claims for Travelers. “Then there are many fewer questions about the cause of the loss.” Do what you need to do to prevent further damage, such as boarding up broken windows, but don’t start cleanup or other significant work until the insurance adjuster comes.
Filing a small claim could cost you a claims-free discount or trigger a rate increase, and filing a series of small claims could eventually get you dropped by your insurer. It’s better to pay small claims yourself and keep your deductibles high to benefit from lower premiums.
Use apps from your insurer that make it easy to send pictures and other records. Then keep in touch with your adjuster, either through e-mail or by phone. “Follow up once a week or so to find out if there’s anything else you should do,” says Treutel.
Set up a meeting with the contractor and the adjuster at the damage site. “It’s good to evaluate the damage from the same perspective,” says Gee. If you don’t have a regular contractor -- or if you have water damage or other special issues -- your insurer may be able to recommend some companies.
Keep receipts for hotel stays, meals and other extra living expenses while you’re out of your house; those costs may be reimbursed by the insurer. Also keep records of all supplies you buy to help contain the damage.
Contact the insurer if the contractor finds new issues after the repairs begin. “We might take a look at it again, and that’s a normal part of the process,” says Gee.
How to fight back: Every state insurance department has a free service to help you through the claims process and to make sure you’re getting everything you’re entitled to under your policy, says John Huff, Missouri’s director of insurance. Huff says that, mostly due to the devastating tornado in Joplin, Mo., his department had 21,000 inquiries last year and recovered an extra $19 million in claims payments for consumers. If your area has had a major disaster, your state insurance department may set up a special appeals process.
Your state can help even when there’s no major disaster. “It’s amazing how quickly many claims get paid once you contact us,” says Monica Lindeen, Montana’s commissioner of securities and insurance. “And sometimes just threatening to contact us can help.”
Don’t jump at an offer from an independent adjuster to provide extra help before working with your insurance company and state insurance department. Freelance adjusters charge a percentage of your payout -- typically 10% to 15% of the amount recovered. In Joplin, as well as areas affected by Hurricane Katrina, some public adjusters showed up right after the storm and tried to get people to sign on with them before going through the claims process with their insurer. If you decide to use a public adjuster, be sure he or she is licensed with your state insurance department.
When you’re in an accident, don’t just exchange insurance and contact information with the other driver. Take pictures of everything with your phone’s camera -- your car’s damage, damage to the other car, the accident scene, and the other driver’s license plate, registration and insurance card. Get contact information from any witnesses. Then contact your insurer or agent.
Some insurers, such as Chubb and Travelers, have apps that walk you through the claims process and let you upload the photos and an audio or written description directly to your claims file. Travelers’ Auto Accident Help app produces a detailed accident report that you can send to any e-mail address. If the police arrive and write up an accident report, get the report number.
You can generally use any repair shop to get your car fixed, but taking your car to a repair facility on the insurer’s recommended list may expedite your claim. Some insurers have special one-stop claims facilities where you can take your car, meet a claims representative and arrange for a rental car.
How to fight back: If your body shop says it will cost more to fix the car than the insurance appraiser says, provide a detailed estimate from the shop to the insurer. Sometimes the difference can be a result of policy specifics -- if, for example, your insurance covers after-market parts but the body shop wants to use original manufacturer’s parts. You may also have the right to get an “independent appraisal” -- you get an appraisal yourself and a third party weighs that along with the insurer’s appraisal and settles on the number. (This is usually called the “appraisal clause” in the policy.)
If the insurer says your car is totaled -- because it will cost significantly more to repair your vehicle than it’s worth -- and you disagree on the value it has assigned, make a case for why your car is worth more. Compare the selling prices of used cars the same age and in similar condition in your area (you can see local ads at Autotrader.com) and check used-car values at Edmunds.com and KBB.com.
It can also help to get your agent involved; sometimes he or she can help speed the claim along or ask for specific information from the insurer about why the payout was lower than expected. If the claim payment is still too low, enlist the help of your state insurance department.
As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.