Contractor 20/20 Shares Advice on Insurance Claims and Options
Posted by Jim Eichman
President Empire Plumbing, Heating, Cooling & Electrical
I don’t how it is in the rest of the nation, but California and insurance claims spells disaster. I have had a number of insurance companies over the life of my company and have found the claims process to be horrific.
I started out with $1,000 deductible thinking that it would be fine. The insurance company would automatically pay upwards of about $5,000 with no questions asked. The result was higher claim losses than they should have been and higher rates to me.
I then went to a $5,000 deductible and found that I could handle the claims up to about $7 or $8k without the insurance company stepping in. The result was smaller losses, but if the potential went beyond $10k the insurance company would step in and stab me in the back offering upwards of $10k with virtually no questions asked. The result was higher claims and higher rates and utilization of the $5k deductible.
Then I started paying claims myself and refusing to give out the name of the insurance company. The result, lower payout’s. Sure I had to pay claims upwards of 20k from time to time, but my rates lowered so much that it made it profitable. I could pick and choose what was covered and what was theft masquerading as damages, both auto and home. I became good at writing letters questioning processes and casting doubts on claims. I photographed the damages and when they didn’t add up, threatened to stop the entire process for fraud. The insurance rates plummeted.
We grew. I then opted for a 50k cumulative deductible. It lowered my rates by $50k a year. Now I fight those bogus claims on a regular basis. I do retain an attorney when it goes to court. (Bear in mind that your insurance pretends to represent you, they really only represent themselves, it is a black hole of money. Kind of like a boat-only bigger-with no fish.) Insurance rates have never been lower. The rejection of bogus claims and inflated claims have never been lower.
Now if we have a legitimate claim-we pay it-and fast. The faster the better and the cheaper. But if we didn’t do this the following claims, in the past couple of years, would have been paid by the insurance company and would have seen my rates go up.
-We were rear ended-suing party (the person that rear ended us) claimed that we were to fault because the lettering on the truck distracted them. Hope he rots in H-E-double hockey sticks.
-We installed a defective cartridge for a homeowner who provided the cartridge. It flooded the home that night and caused, according to the bogus contractor, $20k in damages. I rejected the claim in it’s entirety and, 8 months later, have not heard a word from the insurance company. The fraud was massive in the claim. They billed up to 4 times for the same procedure.
-Workers Compensation Fraud. I have an employee collecting for being unable to work for the last year. He has worked for me and has never made more money in his life. He missed 3 weeks of work, yet collected all 8 months. This case is still pending the reimbursement.
-We were side swiped a car and the other insurance sued for $2200. It was their insured’s fault. Never paid a dime.
-We caused a rear end accident. 3 car collision. Minor damages-major bills. The middle car-the one we hit-claimed over 10k in damages-we ended up paying $5600. The front car-with a rear bumper bent-no body damage-claimed frame damage-roof rack damage-extensive car rental-and more. we ended up paying $933.
-We rear ended a 1995 400 dollar minivan taking off from an intersection. The vehicle took off in front of us and then suddenly stopped for no reason. No damages to either vehicle. The man claimed that he was permanently injured and was suing in unlimited jurisdiction court (Over 100k). I tracked down his attorney and threatened to sue him personally for misrepresentation and report him to the California bar. He wanted my insurance companies contact. I told him where to go-literally. I informed him that I was self insured to the first $50k and I would exhaust this prior to ever submitting this to the insurance company. The result was a dropped case that then ended up going to small claims. The judgment: 0 dollars to the idiot. This guy had made a career out of claiming bogus injuries.
I don’t care who your adjuster is-what kind of garbage they are feeding you-they are not on your side. You must take a pro-active approach to damages and you must push the envelope of reasonability. Insurance coverage is not designed as a profit plan or retirement plan, yet the agents and adjusters do little to nothing to stop the fraud and abuse and in acting to limit the expenses to the insurance company in the small cases are actually encouraging fraud.
Do not just turn it over to your adjuster with a proper investigation on your part. They are there to fleece your pockets and gloat about how good they are.
Signed: Not bitter, not even a bit,