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Fighting with your insurance company? There's help

March 25, 2005|by BOB MAGINNIS

Your car is demolished and the insurance company wants to pay you less than you believe it's worth.

A house fire or other disaster forces you out of your home until repairs are made and the insurance company wants receipts for all of the expenses you incur while living in a motel.

Your home is damaged or destroyed as a result of flooding and the people who issued your homeowners' policy tell you that you're not covered at all.

Then there are health claims in which the insurance company doesn't want to pay for a treatment the patient feels is necessary.

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These are examples of problems the Maryland Insurance Administration has heard from citizens all over the state.

In the past, those not satisfied with their insurance company's response on a claim had to file a formal complaint, which began an exchange of letters and an involved adversarial process.

Alfred Redmer Jr., a former state delegate who was named the state's insurance commissioner in June 2003, said he decided there had to be a better way than that time-consuming and frustrating exchange of paperwork.

What Redmer and his staff came up with was the Consumer Education and Advocacy Unit, led by Joy Hatchette, an associate commissioner.

In business for a year, the unit travels around the state, participating in more than 40 fairs, trade shows and other events in an effort to educate consumers about insurance coverage and the claims process.

Based on those contacts, what they found was that consumers wanted problems resolved without going through an involved process - and they wanted an agency to advocate on their behalf.

To do that, the agency launched a pilot program in January in cooperation with nine insurers doing business in the state.

Participating companies include: Allstate, Nationwide, ERIE, State Farm, AIG, Travelers, GEICO, USAA and Progressive.

If you're having a problem with one of those companies, Hatchette said you may call 1-800-492-6116 or visit the Web site at www.mdinsurance.state.md.us.

"We get in touch with the insurance company and tell them the consumer has a problem. It's an informal way to get the consumers' issues resolved," she said.

Sometimes, the matter is settled by helping the consumer understand what is in their policy, she said.

For example, Hatchette said, someone whose car has been demolished shouldn't expect the insurer to take their word for what it was worth.

"You need to show them newspaper listings for similar autos in similar condition," she said.

The same goes for living expenses for a family forced out of their home, she said. The insurer needs receipts, she said.

And, she said, consumers need to realize that the ordinary homeowners' policy doesn't cover flooding.

It's not just rising streams or rivers that cause flood damage, Redmer said.

"Don't forget about the risk of living at the bottom of a big mountain," he said.

Redmer said consumers are now receiving letters from companies they've done business with for the last 10 or 20 years, following an exterior inspection.

In such letters, he said, the homeowner may be advised to repair a damaged roof or fix cracks in the sidewalk.

It may seem presumptuous of the company to ask for such repairs, but Hatchette said a home with such damage "represents a risk they (insurers) don't want to take."

Redmer and Hatchette said they hope to add other insurers to their pilot program once they're sure it is running smoothly.

As a last resort, Hatchette said, "if at the end of the day we aren't able to resolve their complaint, they can still go through the regular complaint process."

If you're interested in learning more about the process or insurance in general, visit the Web site mentioned previously or call the toll-free number. Materials are also available at Maryland Motor Vehicle Administration offices around the state.

Bob Maginnis is editorial page editor of The Herald-Mail newspapers.

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