What is the process that my insurance company follows when I file

Here is a general idea of the claims process:
1. The insured calls the insurance agent or claim service center to report the initial claim.
2. Claim received in local claim office from service center.
3. The insured receives a call from the claim department to review loss facts and claim-handling procedures.
4. If an inspection is not needed, the adjuster requests information needed to process the claim and issue a settlement check.
5. If an inspection is needed, the claim is assigned to a field adjuster who contacts the insured and sets an appointment.
6. If a contractor is involved, the adjuster attempts to meet with the customer and the contractor to reach an agreed scope and dollar amount of loss. An estimate is prepared and a check is written for the damages.
7. If a contractor is not involved, the adjuster prepares an estimate and issues a check for the damages.
8. If the insured obtains a contractor after the loss is settled, the insured is instructed to have the contractor review the estimate and contact the adjuster with any discrepancies.
9. Every attempt is made to reach an agreed price with the contractor and resolve any discrepancies. If additional money is owed, a supplemental estimate is prepared and a check issued.
Will filing one claim on my homeowner's insurance policy cause my rates to go up?

No. In most cases, once an insurer reviews your loss history and finds none, one claim should not affect your rates. If the claim exposes some greater risk on your property, however, such as owning a trampoline or new swimming pool, then you may face a rate increase.

I heard something about a "home warranty." What is it and where do I buy one?

Home warranties aren't insurance, but some insurance companies are starting to sell them. A home warranty will cover repair costs on items in your home such as your refrigerator and other major appliances, or your central air conditioning system. You do need to have everything in good working order before purchasing a home warranty Hale-Smith, Inc. can arrange for outstanding, affordable home warranties through First American.

Do I need to buy flood insurance?

If you want your property and personal belongings covered against damages caused by a flood, the answer is yes. Basic homeowners insurance policies do not cover damage from flooding. Because flood damage happens so infrequently, most insurance companies won't even consider writing flood coverage. The National Flood Insurance Program (NFIP) underwrites the overwhelming majority of flood policies in the United States. While most people should at least think about getting flood insurance, it is true that some people need it more than others.

A tree falls on my house, from my neighbor's yard, who pays for the damage?

Generally the insurance responsibility lies with the owner of the property is damaged. In other words, if a tree falls on your home, no matter where the tree came from, your insurance company should pay for your home repair.

An exception would be if the damage occurred as a result of negligence; for instance, if the tree was dead before it fell, and you had proof that your neighbor knew the tree was dead. Under those circumstances, the damage becomes your neighbor's liability.

As a rule, state insurance officials suggest that you file a claim with your insurance company and let them handle the claim.

Auto Insurance FAQ

What can I do to protect myself against uninsured drivers?

Purchasing uninsured/underinsured motorist (UM/UIM) coverage can protect you against uninsured drivers. In many states, the law requires UM coverage.

UM coverage will pay for medical bills and pain and suffering if an uninsured driver hits you. In some states, UM property-damage coverage is available. If an uninsured driver damages your car and you have UM property-damage coverage, you'll be able to get your car fixed under this coverage, rather than using your collision coverage.

Generally speaking, UM property-damage coverage carries a lower deductible than collision coverage.

Which states require drivers to buy liability insurance?

Most states mandate that all drivers provide proof of financial responsibility at registration time or after an accident. Essentially, that's proof that you can pay for an accident. You can do this one of two ways: Post a bond for between $10,000 and $50,000, or buy auto-liability insurance. Most people choose the latter because they don't have thousands in cash lying around.

New Hampshire, Tennessee, and Wisconsin are the only states that don't require drivers to provide proof of financial responsibility at any time.

How do you reduce the cost of collision coverage?

You can do one of two things: raise your deductible or drop your coverage. The deductible is what you pay out of your own pocket before your insurance policy kicks in. The higher your deductible is, the lower your premium will be. For example, increasing your deductible from $200 to $500 on collision coverage could reduce your premium by as much as 30 percent, according to the Insurance Information Institute.

Collision coverage is generally not worth purchasing on older vehicles with high mileage because if you ever file a claim for significant damages, your insurance company will likely declare your vehicle a total loss rather than fix it. That's because the cost of fixing your vehicle far exceeds its market value. The value you get for the vehicle in the total loss may not justify the premiums you pay for the collision coverage.

Do I have to use my insurer's body shop for repairs?

No. Most states have "antisteering" laws that say insurers can't force you to go to a particular repair facility. However, if you choose to use a body shop not recommended or approved by your insurer, you may have additional out-of-pocket expenses.

What should I do if I just had an auto accident?

You should inform your insurance company right away. Make sure you've received a copy of the police report and the other party's (or parties') insurance information. If possible, take pictures of all vehicles involved in the accident, to prevent the other parties from claiming damage to a vehicle that was not related to the accident.

Remember, just because you inform your insurer of an accident doesn't mean you're making a claim.

My teenager just got a driver's license and the insurance rates are through the roof. Do I have to add him to my policy? Do I have any other options?

It usually makes good financial sense to add your teen as a driver to your existing policy, but only after he gets a permanent license. In addition, if you're driving an expensive car, it might make more financial sense to buy your teen a safe, older vehicle and get them a policy of their own.

Which coverage pays for damages to my vehicle?

Depending on what kind of damage your car suffers; comprehensive or collision insurance, which is one of your physical damage coverage, will pay for the damages.

If a deer or other animal hits your car, is stolen, catches on fire, or is vandalized, your comprehensive coverage will kick in. If you run into something and damage your car, your collision coverage will kick in.

Both coverage's are optional and, of course, adding them to your policy will raise your insurance premium.

Health Insurance FAQ

Are employers legally required to provide their workers with health insurance?

No, there are no state or federal laws that require private U.S. employers to offer health insurance benefits to any employees at all. However, it is common practice, especially among larger employers, to offer health insurance benefits as a means to attract and retain workers.

Because private employers aren't required to offer health insurance, it is up to each company to decide which employees will be offered health coverage, as long as it is done equitably.

Many employers offer health benefits only to full-time employees. The number of hours an employee must work each week to qualify as a full-time employee depends on the individual employer. In general, most have a cut-off in the 30- to 35-hour a week range. More generous employers might offer benefits to those working just 25 hours a week.

Among those most likely not to have health insurance are young adults in the 18- to 24-year-old age group, people with lower levels of education, those who work part time, and people born in another country, according to a 1999 U.S. Census Bureau report.

It's interesting to note that although private employers are not required to offer health insurance initially, once they do offer such coverage, they become subject to a variety of state and federal laws that dictate such things as what kind of benefits to provide and continuation of coverage.

Can my employer require that I join the company's health plan as a condition of my employment?

If your employer pays all or part of your health insurance premium, it can require you to participate in the health plan. There is no law that prohibits an employer from doing so.

This requirement may seem unfair, but consider other conditions employers routinely dictate to their employees, including job-related travel, adherence to dress codes, and participation in employer-sponsored workshops or classes.

Employers may demand employee participation in the company's health plan because in some states the insurer can impose "minimum participation" requirements. The insurer may stipulate, for example, that 85 percent of the company's employees must belong to the health plan in order for the insurer to cover the group. This is to make certain that the plan participants represent a mix of healthy and unhealthy employees.

If only the "sick" employees who need to take advantage of the covered benefits joined the plan, the high number of resulting claims would cause the cost of the plan to soar and threaten it with financial collapse, a phenomenon known as "adverse selection."

What are my options for buying health insurance for my family or myself?

The best way to get health insurance is through your employer as part of a "group health insurance" plan. You'll pay less and will often have broader benefits than if you were to buy a plan yourself on the open market. Some health plans now consider people who are self-employed to be a "group of one," and will offer you group coverage.

If you don't have access to an employer-sponsored health plan, see if you can get a group policy through some other channel. Often, local Chambers of Commerce or professional organizations offer group health insurance to their members. If you can't obtain group coverage anywhere, you can still buy individual coverage, but the rates will be higher and you risk being turned down for coverage if you have any pre-existing medical conditions.

Often, health plans will have "open enrollment" periods, an annual window period when individuals can join. If you missed open enrollment, you may have to wait until next year. See if your state's insurance department has a health insurance shopper's brochure that lists health plans and comparative costs. Also, find out if your state mandates any "guaranteed issue" plans for individuals.

How can we provide health insurance for our children when we just can't afford to pay the premiums?

Your children might be eligible for health insurance through a joint federal-state program called the Children's Health Insurance Program (CHIP).

CHIP is designed to provide coverage for children whose parent(s), for whatever reason, can't afford health insurance but make too much money to qualify for existing welfare programs. CHIP is funded by matching federal and state funds, and administered by each state separately. Covered benefits and income eligibility requirements vary by state. Several states don't have CHIP plans but might run other insurance programs for qualifying children.

My employer offers health insurance through an HMO, but it's not available to all the employees. Is that legal?

Although it might not sound fair, it is perfectly legal. Employers are allowed to determine which classes of employees, if any, are offered a health plan. A manufacturing plant, for instance, can choose to offer a health plan to executive employees or managers and not to shop floor workers. However, all of the employees in the designated class must be offered the health plan; the employer cannot offer the health plan only to select employees in that designated class.

In addition, once an HMO or insurance company extends an offer of coverage to an employer, no employee in that class can be excluded from coverage simply because he or she has health problems. The health plan can screen the health history of the individual employees in the group, but only to determine whether it will accept or reject the entire group for coverage or what group premium to charge.

When it comes to small employer group coverage, many states now require "guaranteed issue," which means an insurance company or HMO cannot refuse to cover a group, even if one or more employees or their dependents have health problems.

I'm 62 years old and thinking of retiring. What are my health insurance options?

If you retire before age 65 - the point at which you become eligible to receive Medicare - you may face limited health insurance options. If your employer doesn't extend health benefits to its retirees, you'll have to find an alternative source of health insurance. And you may find you can't afford an individual health insurance policy because the premiums are based on your age and health status.

Before you decide to retire early, you should examine your three main health insurance choices:

• Continue employer-sponsored health insurance.
  
• Purchase an individual health insurance policy.
  
• Elect coverage under COBRA.
  

You can continue employer-sponsored group health insurance in two ways. If your employer offers health insurance for early retirees, you may decide to enroll. But make sure you know exactly what services are covered and for how long. Or you may decide to join your spouse's employer-sponsored health plan. It may be more cost-effective and offer better coverage.

Be aware, however, that you'll lose your health insurance if the employer sponsoring the plan goes out of business. If you don't have access to a group health plan, you can purchase individual health insurance. But be prepared for sticker shock. The premiums for individual policies are based on your age and your medical history. Insurers may consider you a bad risk and refuse to cover you or only agree if you sign a waiver that excludes coverage for any pre-existing health conditions.

Another option as an early retiree is to purchase coverage under COBRA, the Consolidated Omnibus Budget Reconciliation Act. Under COBRA, if you work in a company with 20 or more employees and have group health insurance through that employer, you're eligible to continue your health benefits for 18 months after retirement. It won't be cheap, but it may be less expensive than buying individual health insurance.

I recently discovered I'm pregnant, but I have no health insurance. Is there any way I can get insured?

Unfortunately, the insurance options for a woman who is already pregnant are slim to nonexistent.

Medicaid is an option if you fall within its low-income guidelines. If you are a college student, your student health center may be able to give you some leads.

You could try to get into a group health plan that will cover your pregnancy - either by getting a job that offers employer-sponsored health insurance that provides maternity coverage or by obtaining a group policy that covers maternity through a chamber of commerce or other professional organization. This is also true if you are currently on a COBRA policy that will expire before you give birth; unfortunately, you cannot extend COBRA coverage past your maximum even if you are pregnant.

You may be in luck if you're fortunate to live in the handful of states that are allowed to cover pregnant women under the Children's Health Insurance Program (CHIP). CHIP is a joint federal-state program that provides health benefits for children whose parent(s) can't afford insurance but who make too much for existing welfare programs.

After your baby is born, he or she might also be eligible for health insurance under CHIP. Additionally, if you are a parent of a CHIP-eligible child, in some states you may also qualify for health insurance under the program.

Life Insurance FAQ

Can I borrow money against my life insurance policy?

If you own a cash value life insurance policy, you can take out a loan against the cash value you have built up in the policy. Of course, you will have to pay back the loan with interest. If you die before you pay back the loan, the balance that you owe and any interest will be deducted from the death benefit.

If you own a term life insurance policy, you cannot take out a loan against it because in most cases you do not build up any cash value in a term policy.

If I'm a beneficiary, do I have to pay income taxes on a death benefit?

No. Death benefits from life insurance policies are free from income tax. However, the death benefit may be subject to estate and inheritance tax. Check with the agent who sold the policy, the insurance company, or your own accountant for details.

Do all life insurance companies require a physical exam?

Whether or not a life insurance company requires a medical exam from people who are applying for insurance really depends on the company's underwriting requirements. Insurance companies' criteria are based on how old you are and how much insurance you're applying for.

Generally, an adult in their mid-30s applying for $100,000 of life insurance would not need to undergo a full medical exam, but might need to have urine and blood samples taken. Some companies require at least a urine specimen from everyone applying, no matter what the amount of the policy is.

How quickly do insurance companies usually settle life insurance claims?

Jack Dolan, a spokesperson for the American Council of Life Insurers, says that once an insurance company receives a death certificate proving the death of the insured, the beneficiary receives a death benefit usually within one week.

However, if an insured dies within two years of buying a policy, and the insurer conducts a follow-up investigation to see if the death was caused by suicide, or if there is reason to suspect the insured lied on the application, it could take 30 to 45 days before a death benefit is paid, according to Dolan.

Most life insurance policies have an "incontestable clause" that states an insurer can refuse to pay the death benefit if it finds that the insured lied on his or her application. For example, if an insured died of lung cancer within two years of buying the policy, and the customer wrote on the application that he or she did not smoke, the insurer may have grounds to deny the claim based on the results of an investigation.

Can I sell my life insurance?

Yes. There are two ways- a viatical contract or life settlement.

Viaticals allow people who are terminally ill to sell their life insurance policy for a percentage of its face value. Some viatical arrangements are private, perhaps among family members. These days, viaticals have become big business, with viatical companies luring investors to buy policies in bulk.

In addition, "life settlements" or "senior settlement" contracts allow healthy policyholders to sell life insurance policies that they may not need anymore and get more than just the surrender value of the policy.

Is it possible to find out why a company has either rejected your life insurance application or placed you in a higher-risk class?

The U.S. Fair Credit Reporting Act requires that life insurance companies tell you why an "adverse decision" was made on your life insurance application (meaning why it rejected you or placed you in a higher-risk class), according to the American Council of Life Insurers.

However, insurers are not required to go into great detail on exactly what medical condition led to an adverse decision. The ACLI says that insurers do not like to "intrude" on the relationship between applicants and their physicians, and insurers do not want to be in the position of giving an applicant a detailed diagnosis of his or her condition.

If the life insurance company has acquired medical information from your doctor, you can ask your doctor for the same information, along with an explanation of your condition. If the information affecting the decision was from lab findings on exam, this information can be sent to your doctor for you to review. In some states, medical information can be sent directly to the applicant. Check with your insurance department for the exact regulation in your state.

Is a variable life insurance policy or a variable annuity (VA) a suitable financial product for parents to use to save for a child's college education?

No, a variable life insurance policy is not a wise choice to use as a savings vehicle for a college education for the following reasons:

• Although variable life insurance has cash value that can increase over time if your underlying investments in the policy perform well, you are also paying life insurance premiums that are quite expensive. Those premium payments will significantly eat into the gains you could make on your cash value.
  
• The cash value of a life insurance policy should not be considered an investment because any partial withdrawals or loans that you do not pay back will reduce your death benefit. So if you don't pay the loan back, your beneficiaries will when you die.
  
• If you partially withdraw or take out a loan against your cash value, and the withdrawal or loan amount exceeds the premiums you have paid into the policy, you will be taxed on the difference for variable life policies.
  
• If you choose to surrender your variable life insurance policy, you also may have to pay a surrender fee to the insurer. Check your policy language for more details.
  A VA can be considered as a retirement planning tool, not as an investment vehicle to save money for a college education. Here are some reasons why:
  
• VA's carry high fees because the insurance company must charge you for the risk it is assuming to guarantee you a lifetime income. While the average fee for a VA is 2.12 percent, the average fee for a mutual fund is 1.37 percent, according to Morningstar Inc., a research firm that tracks VA's and mutual funds.
  
• Many VA's require that you pay a surrender fee to get out of the contract. The surrender period is usually seven to eight years, and the rate drops each year you're in the contract. For example, you might pay an 8 percent surrender fee if you surrendered in the first year, 7 percent in the second year, and so on. You don't face those kinds of surrender fees in most mutual funds. These fees are often referred to as "back-end sales loads," or "contingent deferred sales charges."
  

You will pay a penalty tax if you withdraw money from a VA before age 59½. You do not face such restrictions with a mutual fund. Also, mutual fund returns are taxed at a capital gains rate, while variable annuity returns are taxed at your ordinary income tax rate, which is much higher.