READ THIS!!! - Posted by JohnBoy
Posted by JohnBoy on July 03, 2001 at 07:19:48:
I had recieved this from someone that is in commercial development. It pertains to getting insurance and I thought I would pass this on to the group here. It’s excellent advice when it comes to buying insurance.
reg: insurance on business or property
Some general suggestions for every one, assuming that every one has some type
of insurance coverage…
1 MAKE A COPY OF YOUR POLICY AND ALL ENDORSEMENTS
Really, do this. Make it single sided, not double, and include very thing
they sent from the agency. Then number every page.
2 NUMBER EVERY PAGE STARTING WITH 1 OR 100, AT THE LOWER CORNER.
Your hand numbering will be the best way of referring back and forth to where
you need to go. there may be a cover letter from the insurance company,
there may be a premium notice, there may be a summary of coverages, and then
the basic policy and endorsements. put them in “any” order, and then hand
2 READ THE MAIN PART OF THE POLICY WORD FOR WORD
Start with the basic policy and highlight what you don’t know or understand
or what appears unclear. Remember, if it’s unclear now, it will be more so
after a fire or other casualty.
3 READ THE ENDORSEMENTS AND AMENDMENTS
Read every one, and when a single page says something like “this modifies the
basic plan, section 3 part 4-e” or "this page replaces section 4, part 1-a
(1), then go back to that main section and cross it off, noting that it is
now replaced by the endorsement (and always refer to your hand numbered
pages. where the initial summary pages are, you will find sections telling
you what the numbers of the endorsements are. Write down the numbers and
look for them. Be sure they are included. You will often find some missing.
4 MAKE A LIST OF QUESTIONS FOR YOUR AGENT
that’s right, write them down and keep a computer file (many word document
files). when you are done, you will be sending back to the agent the letter
with questions, and a complete copy of what you have put together, and
numbered, marked up, and are referring to…for an insurance policy using
your own page numbering. if the policy is 30 pages…so be it. paper is
the cheapest and least expensive defense you will have down the road.
5 WHAT WILL YOU BE WRITING DOWN???
go on the basis that a normal person can read a policy and understand it to
the degree that it is “understandable”! you will find the following;
A references to endorsements…and those endorsements are not
B sections of the policy referring to other sections, which don’t
C Sections referring to other sections that are mis labeled.
D you might find a total lack of clarity regarding your most basic
E you might find requirements placed on you, that you have not done
F You might find requirements placed on you, that the agent said were
6 SEND THIS SUMMARY TO THE AGENT AND TO THE COMMERCIAL INSURER
Remember, your agent probably lives and dies on selling house insurance,
selling whole life, annuities, auto and the most basic of forms and
documents. your asking questions based on your reading of your own policy
will generally “throw them for a loop”.
they will want to know why you are asking these questions.
They will want to know why you did not just call them.
They will tell you they are busy.
They might tell you they are not familiar with the details of your policy
they might tell you they have sent this on to the commercial company they
insured you with.
7 APRIORI VERSUS APOSTARIORI
when dealing with insurance agents, and later on insurance companies…deal
with the facts, not with fiction or faith.
In Latin, so I was once told, and sort of remember, and remember enough of to
make this point, there are two words describing how one speaks to another.
Using the form of, or approach of (1) apriori or that of (2) apostariori.
(I’ve probably spelled both wrong, but the point remains).
apriori means “ethereal, heavenly, in the clouds, with out real basis and
fact”. this is a term quite often found in religion, and there refers to
"faith", being a "whole soul commitment and trust. "
“I’ve never had a problem”
“you are covered with this great policy”.
Apostariori means (sort of) “in regular, building, progressive steps”, based
on facts, based on proving one point and then another and then another,
building one fact on another.
Section 3 covers liability
Section 3.a says your company is covered
Section 3.b says your financial institution can be named as co insured
Section 4.5 was replaced with amendment LC1-045-A
All of this to say, that you, as the reader of the insurance policy, must
always stick with the “apostariori” approach.
what does the policy say?
what does it include?
what happens if there is a fire?
what is covered?
what must be done if there is damage?
who must do it?
your questions should not be…
"do you think this policy fits me?
is it the cheapest?
is it the best?
will it work?
this letter you have now composed, by reading the policy and every document
with it, deals with “the facts” or the “lack of facts”. This letter is based
on the policy you have “in hand”, is based on your reading of it, and based
on your understanding or lack of understanding of “the facts,
ma’am…just the facts”.
8 SEND ALL DOCUMENTS BY CERTIFIED MAIL
Never send anything to any insurance agent or company unless it is sent
certified with the certification number written on the letter inside. keep
the postage slip. look for the return green slip showing it was received.
if it was not received…send another one! if you don’t, later on, you will
be in a far weaker position relative to proving past facts and/or situations.
9 IGNORE THE FLACK
If you spend 2 to 3 hours doing all of this, when you are done, you will know
what is in your policy far more than your agent. you might find the policy
has parts that should not have been sent “as one package”. people, today, in
large insurance companies, just pull pages from shelves and “make up” a
policy, starting with the basic form, and then adding what they think are the
riders. they make mistakes big time. no one ever catches them. you now
and, you will get flack from your agent for asking these questions. here is
a simple response.
“I paid you the premium for a policy and I expect that I should know what it
says. Surely you should also. Therefore, I need answers to the questions
sent. You send them back in writing, or have the commercial insurer send
a normal insurance agent will realize that he or she cannot write anything
down, because they don’t really know the answers…and they should have
caught them when the policy went out, although many agents selling such
policies don’t even see the policy, as it is sent from the commercial
10 WAIT FOR A WRITTEN RESPONSE
You might get one and be very pleasantly surprised. Great.
You might not get one, and be told one is not forthcoming.
You might get one, and find the answers less than satisfying.
What ever the situation is, you now have, on record, the written response of
the commercial insurer, or even the agent, though that person most likely has
overstepped their bounds in what they wrote.
If you get no good answers, then start looking for a policy that covers you
clearly and spells out the coverages in a way that you can understand.
if you get great answers, then stick with the company.
11 SEND A PERIODIC REQUEST TO THE INSURER
Some items that might be in a follow up letter, or even the first one, when
reviewing the policy include…
Dear Insurance company, regarding our covered property…
…do you need a list of the equipment we have insured?
…do you need pictures and can they be prints or video?
…do you need the original purchase prices?
…for replacement are you paying the replacement cost or current market
…how are these coverages determined. please send back an explanation.
…for liability coverage, is the coverage we have that which you see as
adequate for our type of business?
…are the limits OK, or should they be increased?
…what inspections will you be making and when?
As an owner, how would you like to have insured a building with a
"replacement cost" of $60.00 a foot, and found 15 years later that the policy
did not include an automatic yearly increase in the replacement cost basis.
now, you have a fire and find that you have not met the 80% co insurance
provision (meaning you must have paid for insurance that at least covers 80%
of the replacement cost, or you will not be paid totally for the damage).
12 DOCUMENT EVERY CALL AND VISIT TAKING NOTES AND PICTURES
Every time you call the agent or insurance company, whether you get them or
not, document this in your files. in a “non threatening” and “non offensive
way”, send a follow up fax or letter indicating you attempted to call them,
but they did not return the call.
when you do speak with any one, type up the conversation and send them a
"confirming" memo of the discussion, indicating that they can, if they want,
change, alter, add, or delete any items, if their understanding was
different. the best way to do this is by writing in the “third person”.
notes should not say…
“confirming our call”…I said, you said, i said,
rather, "confirming the call of this date between the above two parties, the
following was reviewed…
Point 8.1 of the policy
insured indicated this was unclear
insurance company indicated a new page would be sent out. This will be
Writing in the “third person” seems very impersonal, but one tends to write
more clearly, and without majoring on minor issues and the reverse.
WHAT DOES THIS GET US TO???
Hopefully, nothing. No fire. No fall. No harm.
But, if there is a situation, then this “base” that you have put together,
while not under pressure to do so, and not seeking funds from the insurance
company…may mean the difference between you getting “through” the baloney
that the insurance company throws at you, or never getting through it.
in case of a problem, with all this done, even now, it will be a hard battle.
agents will want to speak with you via phone and will hang on a few words
you might utter, thereby turning the entire investigation to their advantage.
for that reason, when you meet with an adjuster, after being with them, tell
them that you want to sit down and review the findings for the day, and you
will record this. they will object. you have the right to do so. when you
are standing in the midst of a burned out unit, and some insurance reps says
he or she just does not want to be recorded…that’s all the more reason to
do so. if they say they will leave if recorded, then, as a fall back
position, bring in at least one or two other people to the meeting and have
them take notes. if the insurance person speaks “fast”, stop them regularly
and ask the note takers if they are getting every thing. all you are doing
is telling the “other side” that they are the “other side” and they are not
going to “roll over you” in this situation and that you need their help and
they will give it to you “per the insurance policy”…no more and no less.
those are my recommendations. I hope they help. I also had this happen to
our venture with a property we owned. we went through a small situation in
the last year. we had personal property in a center and I asked the agent if
it (the personal property) was “covered under our current (building coverage)
policy”. he said yesl. but he said it sort of like one says yes, when you
ask them if they have been good, when you know they have been bad. “yes, its
Great, said I. then I sent him a confirming letter and asked that he sign it
and return it for my files. he called and said he had told me. Great, said
I. now, please, for the files, since the killer truck might run over me, but
the partnership still lives…would you send a confirming letter. I wrote
him again. Finally, I got a copy of a letter from him written by him to the
commercial insurance company asking that question. He had no idea. They
responded and said “nope”, not covered. He called back and said “nope, not
covered…gee I thought it was”.
so, we took out an additional 25,000 in coverage. 3 months later, the
insured property was stolen. the insurance company first said “that was not
insured in your policy”. so, we pulled out their letter, and then showed
them we paid for the additional coverage having raised this very issue
before…and having taken on additional coverage specifically for
"unattached personal property". still, it took 6 months to get paid. and
they still raised an issue as to what was the “replacement value” of the
items. I had not highlighted that in my first correspondence.
Again, this does not answer any questions for what happens “after” the fire
or loss, but I know and you know that, there will be more losses. The best
way (if there is one) for that to occur is where you have properly,
professionally, and for your own benefit, covered your bases ahead of time.
And done so in writing.
Good luck and enjoy reading your insurance policies. I’ll bet that many
people have never read them totally, or even half way through.