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Be Honest. Lying about a loss, exaggerating the amount of damages to increase the value of the pay out, or omitting important information can land you in hot water with the insurer and may result in the denial (refusal to pay) of a claim. The best practice is to be upfront on all facts about the claim and circumstances leading to it. Again, that honesty obligation runs both ways. When making or negotiating a settlement of a claim, keep notes about any promises you’re given, the date and time of each contact, and the name and title of each person you deal with. Insurers recommend that homeowners keep an up-to-date inventory of any valuable items in a safe deposit box, including pictures or video, and receipts for the purchase of valuable items, so in the event of a loss of there’s no dispute over the existence of the perished property and its value. Be Patient but Persistent. Many insurance companies try to get you to sign off on a settlement soon after the event. Often an insured is still in shock and assessing the damage and repair cost. Some bodily injuries don’t even show up until days after an accident. Don’t jump at a settlement if you think it is unfair or too low, if you are unsure of the damage, or desperate for cash. If you think a claim is taking too long to resolve or if you are offered too little money, contact the claims manager or the insurance company’s regional office. Obviously, your financial interests conflict with your insurance company’s financial interests, so if you feel you are getting the run around, are being pressured, or you’re being asked to sign off on documents you don’t understand, contact an attorney! Claim settlements can be negotiated. PRODUCT PREVIEW Insurance is a means of preserving and protecting wealth. Without it, hard earned assets and savings are exposed to loss. Almost anything can be insured, but the types of insurance you are most likely to encounter are homeowners, auto, health, and life. A deductible is a loss sharing technique which is common to most types of insurance. Homeowner’s insurance protects the home and its contents. It also provides personal liability protection in the event the homeowner or family members damage another person or property. Car insurance provides bodily injury and collision coverage. HMOs and PPOs are managed healthcare programs that utilize a network of approved providers. Term life insurance is intended to replace the income of the insured if they die and has an expiration date. Whole life or universal life are permanent life insurance plans that can have cash value and pay benefits when the insured dies. THE BIG PICTURE
PONDER AND PREDICT Ever since preschool, you’ve been taught to share. Share your toys! Share your cookies! Sharing is caring! Sharing may be all well and good — until it comes to sharing ownership . How might sharing ownership of assets be financially perilous?
Chapter 15 | Protect What You’ve Earned 296
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