By Phil and Aven Rosch | Special to The County Compass
This
article was prepared as a result of the response
to our story titled
“Insurance Adventure—an Indictment of Industry” published in the Jan. 26
issue of The County Compass.
We had
many calls and e-mails. One of the calls was from Mike Causey who is
running for North Carolina Insurance Commissioner. He wanted to hear
more. Aven volunteered to set up community meetings in Pamlico County
and Aurora so Causey could hear about the experiences people have had
with their carriers and what needs to be fixed in the North Carolina
insurance arena.
AURORA --
Eastern North Carolina homes require three separate insurance policies
for each property -- wind, flood, and homeowners. This exacerbates
complexity and encourages finger pointing between entities. Subtle
linkages exist between the policies, which cause the policy holder to
make bad decisions and allow the companies to avoid paying claims.
For example,
flood insurance really doesn’t cover all of your personal property. You
need comprehensive on your auto policy or your drowned vehicle simply
isn’t covered.
Since wind
coverage is through the North Carolina Joint Underwriters Association --
essentially a risk pool -- it is very easy for the flood folks (FEMA)
to point fingers at the wind folks and vice versa.
The root cause
of a claim is almost impossible to determine. For example, did the tree
fall on the house because the wind blew it over, or because the ground
was so wet from the flood and the root ball so shallow that it fell
over?
The normal response is to commission an engineering study, which in many cases costs more than simply paying the claim.
What should be
done? I believe major carriers should be one stop shopping. The
government flood insurance should be a “re-insurer” and represented by
the carrier. If only one company represented homeowners, wind, and flood
their motivation would be to pay claims and move on.
The ability to point fingers at other entities is “an attractive nuisance” in insurance terms.
Insurance
agency culpability is zero according to the North Carolina Insurance
Commissioner’s office. There are no penalties for errors or omissions in
disclosure of the conditions of their company, or the
interrelationships with the other two carriers.
The FEMA Flood
policy has a statement that if you disagree with their claim amount and
take them to court and win, you can’t collect your legal fees as part of
the judgment.
The insurance
commissioner’s office basically has said that your policy is the
contract and nothing the agent says, or doesn’t say, matters.
To read the entire article click below
Written by someone who knows absolutely nothing about insurance, obviously . But most of your problems and questions are easily answerable. The real problem is that most people, like yourself, don't take time to read the contract that they have paid a lot of money for. Neither do they take time to sit down with their agent and ask questions . Truth is that not everything will ever be covered, nor should it be. If it were , the product would be unaffordable. It's close enough now.
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