hether for your auto, home, or health, insurance is something you can hardly risk not having. And whether you live in a rural or urban setting, tragedies like accidents, theft, natural disasters, and ill health can strike when least expected—remember the Salt Lake City tornado? Even though most Americans have insurance, some claims take longer to process than they should, often because of something as simple as an improperly filed claim or misunderstood coverage.
Auto policies

Homeowner policies

Staying healthy

If you are involved
in a car accident,
always call the police.
Auto policies
Let's start with the basics. If you drive, you probably have automobile insurance, and if you don't have it, you should. Many states require proof of insurance before you can register your car or renew your license. This trend is likely to continue, so make sure you're up-to-date. Contact your state insurance department to find out your state's requirements.

Most auto claims are straightforward, although any accident that involves more than one driver has variables. Still, if you follow the proper steps, you can resolve most cases easily and expediently.

If you are involved in a car accident, "Make sure nobody's hurt, everyone is safe," says Trish Tucker, a district manager with American Family Insurance. "Then," she adds, "you should always call the police," even if the damage is minor. Some agents recommend carrying a disposable camera in your glove compartment so you can take photos of an accident from every angle before tow trucks arrive, in case there's any question of responsibility.

You also should trade drivers' license numbers and insurance information with others involved in the accident, Tucker says. If possible, collect the names and addresses of passengers and witnesses, whose testimony can be helpful if there's a dispute.

Contact your insurance carrier as soon after the accident as possible so it can send an appraiser to assess the damage. Some companies, such as the American Automobile Association, allow you to make claims on-line. If your car is totaled, you'll probably see an appraiser within 24 hours. In all other cases, the appraiser should arrive within three days so you can expedite repairs. Some policies have riders for rental car reimbursement while your vehicle is being fixed, so check with your agent.

Homeowner policies
To rent or buy? Many would say owning is preferable, but insurance responsibilities come with ownership. With the recent rash of natural disasters (Hurricane Andrew cost the insurance industry $15.5 billion; the Northridge earthquake tallied losses of more than $15.3 billion), it's important to note that under most homeowner policies, catastrophes such as tornadoes, hurricanes, and lightning strikes are covered.

Floods and earthquakes are not covered, so if you live in an area prone to either (your lender will recommend insurance when you obtain your mortgage), it's wise to obtain coverage. The Federal Emergency Management Agency (FEMA) in Washington, D.C., will be there to help with low-cost loans if you find yourself short of coverage after a disaster, but you could find yourself dealing with extra frustrations if you're not covered. FEMA also has an extensive Web site for flood-related relief. And your credit union also will stand ready to assist in a disaster.

Assuming you have a standard homeowners policy and your home and/or possessions are the target of theft or disaster, follow a few steps to expedite recovery of your losses. The first involves covering your home and possessions for their full worth before disaster strikes.

According to Jeanne Salvatore of the Insurance Information Institute in New York, even though some companies offer policies insuring 80% of the value of your house, you should select "100%, 100%, 100%" coverage. If you don't and your house burns to the ground, you'll be faced with having to build a smaller house, reducing the square footage, or reducing the quality, all at a time when you're already affected by the emotional toll of the loss. Even if your loss is not total, you could end up with a smaller settlement than you anticipated, so it's important to check reduced policies out carefully.

Assuming you have full coverage and are the target of theft or disaster, pull out the camera after calling police and your insurance company. If you've completed a home inventory (see June 1999 Home and Family Finance Online), use that as a reference. If you haven't completed an inventory, start snapping pictures anyway. Document any losses as best you can: In the case of theft, that may include broken locks, windows, doorjambs, and so on. Similarly, in case of a natural disaster or fire, take pictures of everything. Compare them with "before" photos if available.

Whenever temporary repairs are necessary, be aware that costs you incur will come out of the final settlement, so be selective about the things you fix. If you have windows that have been broken or blown out, cover them with tarp or plastic until your insurance adjuster arrives rather than replacing them with glass (once you assure safety, of course). If the damage requires that you and your family move to a hotel while repairs are made, be sure to keep your receipts, as your insurance policy may cover these costs. If you have questions about your coverage, ask, don't assume. Questions like "What am I covered for?", "What is my deductible?", and "Where should I go to get estimates for structural repairs?" are all valid questions, as are dozens of others.

    "100%, 100%, 100%"
    homeowners coverage.

    Some claims may
    take longer to process
    because of something
    as simple as an
    improperly filed claim.

Check your
health insurance policy

before scheduling
a procedure
that might not
be covered.
Staying healthy
In most states, health claims are the most commonly disputed insurance claims. The reasons are many; for one, more Americans (approximately 85%) carry health insurance than any other kind of coverage. Another reason is that although most people are insured, many don't know the terms of their coverage or they make decisions based on faulty assumptions.

Roger Snell, communications director of the Kentucky Department of Insurance in Frankfort, says one out of every 709 insured people in that state filed formal written complaints against their health insurance carriers in 1998. The office handles questions from approximately 2,000 individuals a month.

"Most people look for the basics in a health policy," says Snell, "like 'Is my doctor included?' or 'What is the premium?' " Snell says that his office encourages people to look at other items too, such as the amount of co-payments, deductibles, and excluded procedures.

Kentucky is one of only eight states in the U.S. offering guaranteed issue, which means that even those with pre-existing conditions can buy health insurance. Still, if you're wishing for a smaller nose while you're having your deviated septum fixed, check your insurance policy before scheduling a procedure that might not be covered.

"We rule in favor of the insured about half the time and in favor of the insurance companies the other half of the time," says Snell, adding that when the insurance company is in the right, it's usually because the insured "don't know their policies as well as they could."

This seems to be the rule for all policies, be they auto, home, or health. An informed consumer is a good consumer. Review your policies before disaster strikes, and you're likely to settle claims faster.

©1999 Credit Union National Association Inc.