Hurricane Sandy attacked the East Coast, did her worst, and disappeared. Yet cleaning up the mess she left behind will take months and even years.
Even dealing with damage from much smaller disasters can take a long time. As an example, in July 2011 a severe hailstorm hit Rapid City. It only took nature a few minutes to flatten gardens, beat up vehicles, and damage buildings. It will probably take until the second anniversary of the storm to repair all the damage to our house.
Such a delay isn’t unusual. The most common reasons are finding a contractor and negotiating with your insurance company.
Moving fast after a disaster is important. In fact, you should probably call a contractor even before you call your insurance agent. Insurance companies respond quickly and can move adjusters in from other areas. Local, credible contractors, on the other hand, fill their schedules fast. We spent hours getting bids from beleaguered roofers, painters, and carpenters.
These bids were worth our time, because they showed us the initial repair estimates from our insurance company were low. For our roof, the estimate was to replace cedar shake shingles with much cheaper asphalt ones. Estimates to repair our siding and deck were also low. It took 15 months to come to an agreement on the cost of replacing the deck. The work probably won’t be done until summer of 2013.
Does this difficulty in getting a full settlement mean it’s time to switch insurance companies? Not necessarily. Having to argue to get what you need doesn’t mean the company is wrong, bad, or unethical. Getting compensation from an insurance company is just business, and you don’t have to accept the first offer. Negotiating will take time and effort, but it eventually should get you full compensation.
When you file a claim, you and your insurance company have competing interests. The company is not your advocate. You want as much money as possible from them for repairs, while they want to repair your damage for the lowest cost. There’s nothing wrong with either motivation.
Once I understood that the insurance company and I were natural adversaries, not friends, it helped me feel less victimized and more empowered. While getting the money we needed to make the repairs certainly took time and perseverance, the company readily acquiesced when we presented the facts. After all, their best interest also included keeping us as customers. We did not have to threaten a lawsuit or go to court.
Insurance companies and other service providers aren’t fiduciaries to you like attorneys, doctors, or fee-only financial planners. They have no responsibility to look out for you. Someone selling you something has no duty to put your interests before theirs. Protecting your interests is your duty and yours alone.
When a natural disaster strikes, we are certainly victims of nature’s whims. When it’s time to clean up the mess, though, we’re not victims. We’re our own advocates, with the responsibility and ability to look out for our own best interests.
Rick Kahler is a Certified Financial Planner™ professional licensed with a registered investment adviser that provides personal financial advice online for a flat fee.He is an author of four books on financial psychology and recognized by BusinessWeek magazine as one of the 15 most experienced financial planners in the nation. Contact Rick for help on virtually any financial need.
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