Ok, we admit. Insurance is tough to like or appreciate for most people. It’s not something you may necessarily want to spend on, especially regularly. But on the other hand, if you ever find yourself in a sticky situation, insurance may be the only thing you can count on. That’s when folks start appreciating insurance.
But that still doesn’t mean everyone is happy. This is a complex economic instrument and, yes, sometimes things do go wrong. These are those who think they got a bad deal. There could be many reasons for this dissatisfaction. In this blog, we will look at the top 5 complaints that customers, especially your everyday homeowners, have regarding insurance.
1. A delay in processing a claim
This is understandably rather frustrating, especially if you’re waiting to commence the repairs of your home. Even though everything else seems ok payment delays in claims are not unheard of. Such delays in processing a claim could be attributed to a number of reasons. The insurance company may be flooded with claims and may be on the hook to address a surge in claims. This could happen in the event of a natural disaster, for instance. It’s also possible that the insurance company has a cycle based on which payments are made. This should not really be something for you to worry about and would usually only be a delay of a few days.
The key here is to go with a good insurance company. These are the folks that will keep you informed of what’s happening and will set the right expectations. Don’t compromise on the little things because they might land up being crucial in the long run.
2. Denial of a claim
This is also a very common complaint that customers have because they feel like they should be compensated in times of emergency, isn’t that what insurance is about? Yes, and no. While we can certainly understand the frustration of a claim being denied, it’s usually within sound reason. Some of the reasons could be the disclosure of incorrect facts, a lapsing of the policy, incomplete or absent documentation, a disagreement about whether the claim is valid or no, and maybe even something as simple as not updating your contact info! Whatever the reason, this complaint can be resolved since your insurance company has to be transparent with you. You have the right to know why your claim has been denied.
3. Unhappy with the settlement
Around 19% of insurance users claimed unsatisfactory offers as one of their biggest complaints. There’s usually little recourse in these cases since each company would have its own policies and reasons to why they have come up with a certain settlement amount. These companies follow the rules and policies as laid down pretty strictly. That’s the only way they can function professionally. As it happens, those rules leave little room for subjectivity. This may lead to a situation where the insurance company’s assessment of the extent of damage and the cost of repair or replacement may vary from your own assessment. Do keep in mind the nitty-gritty details when it comes to your typical homeowner’s insurance. And the claim amount and even process may vary based on that. For instance, insurance for floods, or other natural disasters are usually separate, which is something that most homeowners tend to overlook.
You can, of course, talk to your agent if you feel the amount being offered is absolutely unfair.
4. Increased premiums
If your premium goes up from renewal to renewal, it’s often a cause for complaint. But if the risk associated with the asset being insured rises or the cost of providing coverage increases, you can be sure that there will be an increase in your premiums. For example, if the going rates of contractors go up in your upscale neighborhood, then your premium may need to accommodate more in the pool to pay expensive fees for repairs, and so on. The insurance company must have enough funds in the pool to survive, pay their own employees and take care of claims as and when they arise. All this comes from the premiums you pay.
Of course, not all companies are completely transparent, so there could sometimes be unexpected or sudden increases in premiums. These cause frustration and also become cause for complaint.
5. Canceled policies
Yes, insurance companies do reserve the right to cancel your policy at any time, but this is rarely done without a strong reason. This is also the 5th leading cause for complaints. We can imagine that it would be rather worrisome to suddenly have your policy canceled. Some of the reasons for such cancellation may be that there have been too many claims, the home or dwelling is not repairable or is beyond repairs, if you have a criminal record or make false declarations.
If such a situation occurs, contacting your agent to understand the reasons and then deciding the appropriate next course of action as available to you would make the most sense.
So, there you have it, the top 5 complaints homeowners have with insurance companies.
We hope that this blog gives you perspective and provides a little clarity on why insurance companies sometimes take the steps that they do. The more you know, the safer you are!