Friday, January 4, 2013

Superstorm Sandy Is A Reminder That Insurance Claims Are Complicated

In 2002, I lost a detached garage to a fire when a tree near the structure was struck by lightening (see Fire #2 at The Fire House).  My insurance company concluded that I was due over $5000 for the contents lost and another $10K to rebuild (plus repair some minor damage to the house).  However, the designated dollars to repair and rebuild came with specific strings.  I received a payment for 75% up front, but would not get a full reimbursement until the construction portion was complete.

Explanatory Sections for my Four Reimbursement Checks
What I'm sharing is the bottom line of how things turned out.  The math to get to this point was full of details, deductibles, and percentages.  I've been through multiple college calculus and accounting courses. With that said, the math/computations for my claim were harder than they needed to be.  They left  me scratching my head and wondering, why? 

Once, when I was in Chinatown (New York) I watched a team of resourceful dudes working the crowd using a box as a table on a parking meter, three bottle caps, and a rubber band wound into a ball.  They were playing the shell game with anyone willing to whip out some cash for a chance to double their money.  The complicated calculations and arithmetic thrown at me by the insurance people reminded me in some ways of the mind-boggling shiftiness of those street hustlers.  The insurance company team had a solid sense of what was going on because they went through the drill regularly and I (as the policy holder making a claim) was at their mercy due to my lack of experience.

This gets me to the people of the East Coast with losses from Hurricane Sandy.  They are in the middle of a messy situation and part of the problem is the insurance companies.  If it sounds like I'm blaming the insurance industry for the problems in the aftermath of Sandy, I don't intend to.  These are not monks, nuns, and future saints, the agents and the powerful companies they represent are business people.  Businesses are focused on the bottom line and the more money they disburse to their policy holders the less they have for themselves and their shareholders.

Politicians were not involved in my garage fire, but if you've seen the news in the last two months it's obvious that they're wrapped up in Hurricane Sandy and I see this as part of the problem more than the solution.  Our Washington legislators get a lot of money for reelection campaigns from the Insurance Industry.  Once again, the insurers are just looking out for their own interests, most obviously money.  If the Insurance Industry can pass off any part of the expense to us, the American people, that's better for them.  Furthermore, do I believe the insurance industry wants to cut checks to rebuild after Sandy?  I do not.  They will because they have to, but not because they want to and when a camera is around they do it with a smile.  I think it works to their advantage to have the national reps in Washington in the picture so they can justify some postponements of claims and explain that they're waiting for the folks in D.C. to take anticipated action.  And no matter how much the taxpayers help out now, the insurance companies are still going to cover themselves by raising home insurance rates and using Superstorm Sandy as their justification.  They must have money in the vault for the next storm and they'll get it from us because they can.

I rebuilt the Hurricane House sixteen years after Hugo hit South Carolina and I'm certain that more than a few homes on the East Coast will still be in need of repair from Sandy in 2028, sixteen years after the superstorm.  It won't always be tied back to politicians and insurers, but in some cases it will. 

My garage fire claim was basic.  Replacement of a small, two-car garage, the contents, and some money for damage done to the house.  The people in the East Coast have bigger and more intricate claims and if the numbers and percentages are as twisted up as mine were, that just adds to their confusion...but that's how the shell game works.

No comments:

Post a Comment