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Some people don't understand how insurance works.
Now, let me explain quickly how insurance works. Insurance is supposed to bring you back to whole. It is not supposed to leave you in a BETTER position nor a worse position. Principle of Indemnity)
When I was working in the agency in the Midwest, we had a person who had had a fire in their kitchen. Everything was destroyed and even though I wasn't working solely on claims, I still dealt with them.
I had been a go between for both the insured and the agent who seemed to be having a hard time connecting.
One quiet day, I got a call from the insured who was frantic because the contractor was going to put a lien on their house because he hadn't been paid from the insurance company.
Since the house was paid off, there was no mortgage company on the checks for repair. If there is a damage to the structure and a mortgage is present, the check must be made out to both parties.
I told the insured that I would call the adjuster and find out what the story was and why a check wasn't issued. I got a hold of the adjuster and he had issued a payment directly to the insured for about $75,000*. So I found out when it was mailed, how it was mailed and if it was cashed and who he talked to. Then I called the insured back.
I asked if they got a check for the $75k and the insured said they did. I asked if they cashed it and they said yes. So I asked what the problem was, that was the amount of the repairs minus the deductible.
He said the repair man was waiting for the check from the insurance company to be paid. I told him that check was for the repair man and that the adjuster had mentioned it both in the letter and had conveyed it in a phone call.
I asked what happened to the check since it had been cashed by Mrs. Insured on X day. The insured was silent for a minute and then said, "We thought it was for loss of use and meal reimbursement, so we paid off all our debts and then bought *big ticket items*". 1. Loss of use is determined by the adjuster depending on how displaced the family is. 2. Usually meal allowance is "reasonable" meals around $20 a person per meal. Give or take. But I have NEVER seen a loss of use/meal claim for that amount, especially when the insured is still living in the house!
I was dumbfounded. I asked the insured if he had any of those things before the fire and he stated that he had not. So I asked why in the world we would send him a check for him to buy all these things and to pay down his debt in addition to paying for the repairs in full- making his claim over $150K (about 1/2 the value of his home).
He then admitted he never read the letter with the check and had no idea what it was for, but assumed he could spend it how he wanted. Technically, yes, but one would think that if we sent a check for the exact amount of repairs it would be for that. And if I was getting a check for $75K, I'd sure call and see why in the heck I was getting that amount instead of spending it!
After spending about 30 minutes explaining to him that the check was meant for that and faxing him a copy of the letter that was with the check he finally understood. Just before I hung up I asked, "Is there anything else I can help you with today?"
He then says, "Yes, so when will you send a check to the guy? He's going to put a lien on our house and we need to prevent that! We already told him that you were going to send a check to him directly! And we don't have an extra $75K lying around to pay him off in full."
I said, "Sir, there is nothing more we can do for you. We've already sent you a check for the repairs, Mrs. Insured cashed it so we cannot send out another one to you. If you did not pay the contractor with the check we sent, then you will need to take up payment plans with him."
I wanted to say, "Sir you'll see another payment from us when
"
*I don't remember the exact amount but it was a larger sum somewhere between $50-$100K that was owed to the contractor.
Now, let me explain quickly how insurance works. Insurance is supposed to bring you back to whole. It is not supposed to leave you in a BETTER position nor a worse position. Principle of Indemnity)
When I was working in the agency in the Midwest, we had a person who had had a fire in their kitchen. Everything was destroyed and even though I wasn't working solely on claims, I still dealt with them.
I had been a go between for both the insured and the agent who seemed to be having a hard time connecting.
One quiet day, I got a call from the insured who was frantic because the contractor was going to put a lien on their house because he hadn't been paid from the insurance company.
Since the house was paid off, there was no mortgage company on the checks for repair. If there is a damage to the structure and a mortgage is present, the check must be made out to both parties.
I told the insured that I would call the adjuster and find out what the story was and why a check wasn't issued. I got a hold of the adjuster and he had issued a payment directly to the insured for about $75,000*. So I found out when it was mailed, how it was mailed and if it was cashed and who he talked to. Then I called the insured back.
I asked if they got a check for the $75k and the insured said they did. I asked if they cashed it and they said yes. So I asked what the problem was, that was the amount of the repairs minus the deductible.
He said the repair man was waiting for the check from the insurance company to be paid. I told him that check was for the repair man and that the adjuster had mentioned it both in the letter and had conveyed it in a phone call.
I asked what happened to the check since it had been cashed by Mrs. Insured on X day. The insured was silent for a minute and then said, "We thought it was for loss of use and meal reimbursement, so we paid off all our debts and then bought *big ticket items*". 1. Loss of use is determined by the adjuster depending on how displaced the family is. 2. Usually meal allowance is "reasonable" meals around $20 a person per meal. Give or take. But I have NEVER seen a loss of use/meal claim for that amount, especially when the insured is still living in the house!
I was dumbfounded. I asked the insured if he had any of those things before the fire and he stated that he had not. So I asked why in the world we would send him a check for him to buy all these things and to pay down his debt in addition to paying for the repairs in full- making his claim over $150K (about 1/2 the value of his home).
He then admitted he never read the letter with the check and had no idea what it was for, but assumed he could spend it how he wanted. Technically, yes, but one would think that if we sent a check for the exact amount of repairs it would be for that. And if I was getting a check for $75K, I'd sure call and see why in the heck I was getting that amount instead of spending it!
After spending about 30 minutes explaining to him that the check was meant for that and faxing him a copy of the letter that was with the check he finally understood. Just before I hung up I asked, "Is there anything else I can help you with today?"
He then says, "Yes, so when will you send a check to the guy? He's going to put a lien on our house and we need to prevent that! We already told him that you were going to send a check to him directly! And we don't have an extra $75K lying around to pay him off in full."
I said, "Sir, there is nothing more we can do for you. We've already sent you a check for the repairs, Mrs. Insured cashed it so we cannot send out another one to you. If you did not pay the contractor with the check we sent, then you will need to take up payment plans with him."
I wanted to say, "Sir you'll see another payment from us when
"*I don't remember the exact amount but it was a larger sum somewhere between $50-$100K that was owed to the contractor.
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