Woody Allen, although creepy, can be pretty funny. He’s the comedian who said, ”...anyone who thinks there’s nothing worse than death hasn’t spent an hour with an insurance salesman.” Laugh, but please ignore that quote — insurance is important stuff to have when disaster strikes.
Insurance policies are fashioned from obtuse stuff. They are not written to be easily understood and at times appear purposefully constructed to mislead. There are states that require insurance policies to be written in simple language; Idaho is not one of them.
For some reason corporations are usually better protected than individuals in Idaho. I wonder if it has something to do with campaign contributions? Therefore, it is always best to approach all consumer transactions in Idaho with buyer beware stamped on the palm of your hand.
Having spent my legal career analyzing insurance policies, I assure you there is no shame if you can’t understand them. I still have to pour over policies for hours on end at times to try and make sense out of their gibberish.
The vast majority of clients who have retained me for assistance with insurance claims do not understand the contents of their policies. They are often shocked to find out that coverages they thought they had do not exist or have been taken away or reduced in some fine print stored elsewhere in the policy.
Another maxim I have found to be fairly accurate about insurance policies is that the thicker the policy, the thinner the coverage. The reason is that much of the fattening language is devoted to whittling away your alleged “Cadillac” coverage.
Beware too of the the bait and switch game. Insurance policies often offer you what sounds like great coverage on one page only to reduce or take it away in some other distant section of the policy. It is hard to keep track of those tricky maneuvers when you have to jump from one page to another to comprehend your supposed benefit.
Several key areas that can be especially misleading in insurance polices are the terms “replacement cost coverage” in homeowner policies and “underinsured coverage” in auto policies.
The Charlotte fire painfully produced many total loss claims for area residents. A significant number of claimants had problems with their insurance companies. What became evident from reading many of their homeowner policies was that each company had a different definition for replacement coverage.
There was a time when buying replacement coverage meant exactly that in insurance policies. If you lost your entire home, whatever it cost to replace it was your coverage. That is often no longer the case as various formulas and definitions are now used to determine the amount of so-called replacement coverage.
Please visit with your agents about the type of homeowner coverage you have, and ask them to explain in detail the amount of your coverage. If you want your house replaced when there is a total loss, make sure the amount provided is sufficient as disasters obviously happen.
It was horrific for those who lost their homes with all of their memories in the Charlotte fire, but it added insult to profound injury finding out the insurance policies they thought would replace their homes and contents were not always up to snuff.
Another area of insurance that is particularly misleading is the underinsured coverage offered by virtually all auto policies. This and uninsured coverage are two of the most critical coverages consumers should purchase. The primary reason for my view is that Idaho has ridiculously low liability insurance limits that have not been increased in almost 40 years.
Not only are the minimum liability limits low, there are many drivers on Idaho’s roads who are violating the law by not carrying any insurance. You have to protect you and your family, and many agents fail to appreciate this when writing coverage for their policyholders.
I have seen numerous policies where agents have sold substantial liability coverage while placing pathetically low limits on uninsured and underinsured coverage.
The agents doing that have it wrong. They are leaving their clients at the mercy of fate in depending upon what an opposing driver might have for protective coverage. It’s my legal opinion that failure to properly insure you is actionable malpractice.
It is the agent’s professional responsibility to educate their clients to have proper limits, and the same amounts for uninsured and underinsured coverage should be offered that are recommended for liability protection. If their clients won’t agree to that, then the agent should have a signed waiver stating the coverage was offered, explained and refused; it’s that important.
If you, as an agent, think your client should have $500,000 in liability coverage to protect their assets from strangers, isn’t that the same limit you should recommend for your customers to protect their family, the ones you are being paid a commission to insure?
Ample coverage is critical to have, but also realize most insurers in Idaho (not all) have an offset provision where they deduct the amount of liability coverage the other side has from the coverage they write for your underinsured benefits. In essence, you don’t have the amount they sell you, you have that figure less what the at fault party is carrying — misleading indeed.
I cannot emphasize enough how important it is to have a competent agent writing your insurance coverages, one who spends the time to explain your policy benefits and follows up on a regular basis (an annual review is advisable) to make sure you are current regarding your coverages.
If your agent wrote you a policy years ago and has disappeared on you, it’s time to find a new one. Also, buying insurance coverage on-line, without the assistance of an agent, is a formula for disaster. Agents are trained to understand insurance — you are not.
There are more twists and quirks that I could address about insurance policies, but you would start to think death was preferable to reading more of this article, so I’ll stop.
Many clients have come to me thinking they don’t have a chance fighting the power and wealth of insurance companies. That’s not true. This is one instance where the Idaho Legislature has provided consumers quality protection.
Idaho has adopted a few statutes that protect you when you are being mistreated by an insurance company. A key statute is Idaho Code 41-1839 which provides for an award of attorney fees, costs, interests and other related damages if you are unfairly denied payment of your insurance claim.
Attorneys who handle insurance claims will take cases against insurance companies because of this statute. Don’t be afraid to seek out their consult if you think you have a valid claim that has been denied or you need help in interpreting your gobbledegook infused policy.
In closing, most of us deal with tight budgets, but buying the cheapest insurance is not the best “policy.”
Insurance is about protecting your assets and family, and spending a few more dollars a month can make a major difference when catastrophe strikes.
A good agent will explain why that is the case, and hear them out even if you think death is preferable. My agent, by the way, is entertaining and one smart cookie when it comes to writing proper insurance coverage.
With the help of a good agent, do everything you can to understand the nature and extent of your insurance coverages. It would be nice to have fewer people in my office saying, “I wish I had understood that before the fire or accident occurred.”
Jesse Robison is a Pocatello native who has lived in Mexico and other places. He was educated at Idaho State University and University of Idaho. Robison works as a mediator and insurance law consultant, but his passion is public art. He has spearheaded numerous art improvements throughout Pocatello, including the Japanese garden located at Pocatello Regional Airport, and he serves on the Bistline Foundation. Robison currently resides in Pocatello.