To combat fraud, many insurance companies are getting tougher on claims submitted by consumers.
But while some insurers delay payment to raise justifiable questions about claims, others drag their feet or deny payment for no apparent reason.
Here are the most common excuses insurance companies give when limiting or denying auto, home and health insurance claims - and the best ways to fight back...
AUTO INSURANCE
*"Your car isn't worth as much as you say it is." Insurance companies base their car-value assumptions on industry data that is similar to the information found in Kelly Blue Book. Keep in mind that Kelly Blue Book provides only average values of vehicles and that individual cars can be worth significantly more or less, depending on their condition and included extras.
Examples: Your car may have been garaged ... have low mileage ... or have expensive options, such as a sunroof or a V8 engine.
To support your claim for higher reimbursement: Check the classified ads in your local paper. If you find a half dozen cars that are similar to yours selling for more than the value listed in Kelly Blue Book, collect as much data as you can and send it to your insurer. Your insurer may relent.
*"Your car can be repaired for a lot less." Some insurers set out to reduce all claims payments by a set percentage, even when the amounts are legitimate. Of course, most insurers won't say this openly. Instead, the company might say that the $3,500 estimate you received is too high and that your car can be repaired for only $2,500.
Helpful: Don't be intimidated. If you visit three repair shops, and the lowest bid was $3,500, insist that your insurer pay the claim in full. And don't be pushed into using a cheap repair shop chosen by the insurer. I've never seen a policy that requires policyholders to go to a particular repair shop.
If your insurer still balks, say you'll turn the matter over to your attorney. This may make the insurer pay up. If the difference between you and your insurer is a few thousand dollars, it will cost the company more to hire a lawyer than to pay you off.
HOMEOWNERS INSURANCE
*"The problem cited in the claim is due to previous damage or normal wear and tear." This is a favorite ploy of insurers that want to avoid paying up.
Solution: Challenge the company to prove that it does not cover these claims. Ask where in the policy it says so. Also, ask for proof it was "wear and tear" or previous damage. Insurance policies are written by the insurance company. If the language they rely upon is vague or ambiguous, you can collect - courts hold that ambiguity is always against the insurance company.
Example: A couple from Texas had their roof and window air conditioner damaged by a hailstorm. The company's adjuster acknowledged that the air conditioner had been hurt by hail but insisted the hail hadn't damaged the already old roof.
The couple canvassed their neighbors and found that other families' insurers had paid for new roofs. The couple called the insurer with the information. The insurer then reversed itself, knowing that its policy language was the same as that of the other insurance companies that paid.
Under the typical homeowner's policy, you are entitled to the full cost of repairing or replacing a damaged roof, even if the roof is old.
*"You may fix or replace the damage for less than you claim." Some insurers will use this line as a trial balloon to see how low it can cut a claims payout before you complain. As long as you have a replacement policy and can show that it is impossible to replace an item for the amount the insurer is offering, stick to your guns.
*"We're delaying payment because the cause of the claim is suspicious." It's bad enough your house was damaged by fire, but now the insurer is holding up payment because it has questions about the fire's cause.
It's one thing if payment is temporarily delayed because of an investigation to rule out arson. But if arson is suspected, the fire department usually conducts its own inquiry.
If the fire department hasn't found it necessary to check the origin of the fire, ask the company directly if it is accusing you of arson.
If the answer is no, tell the insurer you expect the money to be forthcoming promptly or you will refer the matter to your attorney. If the answer is yes, call your lawyer immediately.
Important: Don't worry if you inadvertently caused the fire. People cause fires every year by falling asleep in bed while they're smoking, and many companies pay up anyway.
*"No receipts, no coverage". Ideally, it's best to have a written inventory of everything in your house.
But if you neglected to follow through on this chore, don't despair. Homeowner's policies don't require that you have receipts for damaged or stolen items, only that you show some proof of what you owned.
Helpful: Go through family photos, looking for pictures that show the items. You can also ask relatives and friends to check their photos for pictures that show people grouped around specific furniture and paintings.
Also, get sworn statements from friends and relatives and from merchants who sold you the items, attesting to the existence of those items.
HEALTH INSURANCE
*"We won't pay because this treatment isn't medically necessary." This is particularly troublesome with certain HMOs, which can be very tightfisted about what procedures they will cover.
Helpful: Put pressure on the insurer, starting with your doctor. Also, contact your employer's benefits department, and then call the insurer. If this doesn't work, say you'll contact your state insurance department or the media.
*"This treatment isn't covered because it's experimental." The problem is that policies can be ambiguous about which treatments are considered experimental and which are considered standard.
Helpful: Enlist the help of your physician in defending treatments.
Example: One insurer recently refused to pay for a migraine sufferer's stay at the Mayo Clinic because it said the treatment she was given was experimental.
Her doctor referred to his medical school textbooks, which described the treatment he ordered as "classic." He also found that in 49 other states, the treatment was considered routine.
The insurer reversed its decision.
*"We're not paying the entire bill because your doctor charges too much." Insurers balk at paying bills that exceed the "usual and customary" fees for the service in an area. The problem is determining what is usual and customary in your region because insurers are notoriously closemouthed about this.
Helpful: Call your doctor's office, and ask the billing manager how much other insurance companies have paid for the same procedure.
Also find out whether your doctor did multiple procedures but billed you as if it was just a single one. Clarifying the bill can often lead to a larger payment from the insurance company.