Automobile Insurance, You Get What You Pay For

BY GEORGE M. STARK, P.A.

Whether you are interested in purchasing automobile insurance or not, you are barraged by television and internet marketing efforts to win you over. It has been our experience that the services provided by most insurance companies: the “lizards,” the “good hands” and the “on your side” companies, etc. are adequate should you need to file a claim.

The subject of this bulletin is the substandard or “cut-rate” automobile insurance companies that are licensed to do business in the State of Florida which provide a marginal quality of service to their policy holders and claimants. The following problems may be encountered by those who purchase “cut-rate” insurance or, given the nature of their automobile insurance claim, must deal with a “cut-rate” insurance company.

DIFFICULTY IN MAKING A CLAIM

“Cut-rate” insurance company representatives may be unavailable by telephone to accept a claim. Some clients advise us that when they finally get through to their “cut-rate insurance” claims center, they are wrongly told they should make a claim with the adverse driver’s insurance company, or are not provided with a claim number or otherwise advised of the benefits to which they are entitled.

DELAY IN THE ASSIGNMENT OF A CLAIMS ADJUSTER

Even if they are able to establish contact with their “cut-rate” insurance company and make a claim, claimants are invariably told they will be contacted after their claim has been assigned to an adjuster. It is not uncommon to experience a lengthy delay before hearing from a claims adjuster; this may result in the necessity to make several inquiries before a claim adjuster is identified and commences processing the claim. Such delays may be attributable to an overabundance of claims and/or insufficient manpower.

COMPLICATION OF CLAIM PROCESSING

“Cut-rate” insurance companies may require that their insured provide a recorded statement before commencing the processing of a claim, and then scrutinize their application for insurance for disparities in the information provided as justification for denial of coverage. This may result in the “cut-rate” insurance company accepting the claim under a “reservation of rights,” and compelling their insured to personally appear for an examination under oath by an adjuster or insurance company lawyer to investigate representations made by the insured when they applied for insurance, as well as the facts and circumstances of the claim.

DELAY IN PROCESSING AND PAYING A CLAIM

“Cut-rate” insurance companies may to take longer to process claims. It is believed that delay in claims processing is generally associated with increased internal scrutiny of claims, hiring of inexperienced claims personnel, a high rate of turnover among staff and utilization of outside contract claims adjusters and adjusting companies to process claims. Circumstances may dictate the need to purchase “cutrate” automobile insurance and/or file a claim with a “cut-rate” insurance company. Those who do so are encouraged to document their communications with the “cut-rate” insurance company. In the event that automobile insurance company fails to provide an acceptable level of service, we recommend that you contact our firm or the office of the Florida Division of Consumer Services Helpline at (877) 693-5236 for assistance.

Published on: Jul 28, 2016