Be Safe, Then Act Quickly

Different sources such as salvage experts, property specialists and government agencies advise that quick action is critical. Many types of personal property can be saved if rescue attempts occur within 48 hours of the property suffering damage.

Before trying to save property, make sure that YOU are safe. Flooded buildings may have dangers that must be addressed. Make sure that there is no danger of electrocution by turning off power and avoiding fallen utility lines. Do not come in contact with water containing sewage and make sure the floor, ceiling and wall supports pose no danger. Tips On Handling Personal Property

Photographs - Remove from plastic/paper enclosures or frames, carefully rinse with cool, clean water, DO NOT touch or blot surfaces. Air dry: hang with clips on non-image areas, or lay flat on absorbent paper. Keep photographs from contact with adjacent surfaces or each other.

Paintings - Remove from frames in a safe, dry place. Do NOT separate paintings from their stretchers. Keep paintings horizontal and paint-side up with nothing touching the surface. Avoid direct sunlight.

Books - If rinsing is necessary, hold book closed. Partially wet or damp: stand on top or bottom edge with covers opened to 90° angle; air dry. Very wet: lay flat on clean surface; interleave less than 20% of book with absorbent material; replace interleaving when damp.

Paper - Air dry flat as individual sheets or in ¼" or smaller piles, with absorbent paper placed between each wet sheet (interleaving). Do not unfold or separate individual, wet sheets. Keep coated papers wet by packing in boxes lined with plastic garbage bags; freeze (maps or manuscripts), sponge water out, pack loose flat sheets in flat boxes or plywood covered with plastic sheets. If too many items for air drying: interleave (by groups or individually) with freezer or waxed paper; pack papers or files, standing up in sturdy containers; pack containers only 90% full and freeze.

Tapes - Disassemble case and remove tape; rinse dirty tapes, still wound on reel, in clean, lukewarm water; support vertically on blotting material to air dry; reassemble and copy.

Diskettes -Remove diskette from casing and bathe in clean distilled water, dry with lint-free towels and insert diskette into new casing and copy.

Clothing/Fabrics - Brush off all loose, dried dirt. Rinse thoroughly in cold water as soon as possible until as much mud as possible is removed. Repeat if necessary. Do not use hot water as it sets stains from red or yellow clay. Machine wash when no more dirt can be rinsed out.

Wood Furniture - Rinse/sponge surfaces gently to clean, blot, and air dry slowly. If any painted surfaces are blistered or flaking, air dry slowly without removing dirt or moisture. Weigh down or clamp veneers in place while drying; separate weight from veneer with protective layer. (Finishes may develop white haze; treat later with wood cleaning product.)

Upholstered Furniture - If antique or VERY valuable, get professional estimate on cleaning/restoring.

Metal - Use gloves to handle, rinse/sponge and blot metal object, air dry. If object has applied finish, do not clean. Air dry; keep flaking surfaces horizontal.

Leather (including shoes) and Rawhide - Rinse/sponge with clear water to remove mud, drain and blot to remove excess water, pad with toweling or unlinked paper to maintain shape, air dry. Manipulate tanned fur skins during drying to keep skins flexible.

Baskets - Rinse, drain and blot to remove excess water, stuff with clean paper towels or cotton sheets to retain shape and absorb stains, cover with clean towels and air dry slowly, regularly changing blotting material. Be Practical And Prioritize

Often it is impractical or impossible to try to save everything, so prioritize. Get to the property that is MOST important to you and start with the type of property that's most vulnerable to permanent damage. One practical consideration is to forget about fully upholstered furniture and mattresses. Such property is usually impossible to properly dry and is often contaminated.

There's something happening with candles?

If things haven't got complicated enough for persons concerned with protecting their homestead, it appears that the soft, soothing glow of a candle's flame may disguise some problems. Specifically, the use of candles may result in:

• reducing the internal air quality of your home
• increasing the chance of fire losses
• damages by particulate deposits on interior and exterior walls, carpets, furniture, appliances, window treatments, floors and other surfaces.

Further, their use may also contribute to health problems from inhaling particulate matter or ingesting harmful chemicals. What's the problem?

Actually, there are a number of problems and they have been accentuated by a change in the market for candles. The last few years have seen an explosive growth in the popularity of candles. They are increasingly used for their traditional, decorative purpose and they are now marketed as scented candles for deodorizing and for a health-related purpose called aromatherapy.

Of course, to boost sales, candle-makers find that they have to offer products with an intense scent. This is accomplished by adding scented oils into their wax mixture. This often causes the candle to burn improperly and increase the production of soot. A Sooty Situation

It looks like soot, which is a carbon residue produced by burning, can create a large, expensive problem. Since soot is particulate matter that can be carried through the air, it can seriously stain walls, carpets, and personal property. Studies show that electronic and plastic components are also vulnerable to soot damage. Unfortunately, soot produced by improperly burning candles bonds very strongly, making it difficult to impossible to clean. Further, soot may contaminate a home's heating system, including ductwork. The soot can then be spread throughout a home, creating widespread damage that is difficult to repair. Property stained by soot may have to be cleaned by professionals and, often, the property has to be replaced. What's in those things anyway?

You may have assumed that the only materials found in candles were the wick and some type of wax. Surprise! Here's a list of ingredients which may either be found in a candle or may be created during combustion:

Acetone Benzene Trichlorofluoromethane

Carbon disulfide 2 Butanone 1 1- Trichloroethane

Trichloroethene Carbon tetrachloride Tetrachloroethene

Toluene Chlorobenzene Ethylbenzene

Styrene Xylene Phenol

Cresol Cyclopentene Lead

Another surprise is that the candle-making industry is not required to tell consumers about the ingredients used in their products, including when a wick is used which contains a lead core. Poor candle design or practices

Besides the use of oils and chemicals, candle-makers sometimes create problems because they make other mistakes. Candles may also burn improperly (causing soot) because a candle's wick may be off-center or there may not be a proper amount of air in the candle mixture. A candle may have a higher likelihood of causing a fire loss due to:

• an improper candle mixture which results in intense heat or high flames
• improper holders (glass that shatters or spills flammable liquid)
• wood holders that catch fire
• flammable items imbedded in the candle mixture such as potpourri

Damage to a home or personal property due to soot can create serious problems for both an insurer and a homeowner. Losses involving soot can create thousands of dollars in damages. Depending upon the details surrounding a loss and the wording of the particular homeowner policy, coverage for the damage may not be available. Why? Because the source of loss might be considered the result of pollution, which may be excluded. Another reason for rejecting a claim may be an assumption that the damage was gradual instead of sudden, so it wouldn't be considered accidental and sudden damage. A claim could even be affected by the knowledge of the insured. For instance, even if the policy covers soot-related losses, a claim could be denied if a homeowner knew that the type of candle they used could cause damages.

Since the damage is caused by matter that is invisible to the naked eye, it could be difficult to prove that the loss was sudden. Tests can be used to determine the cause of stained or discolored property, but the testing can be expensive and the cost may have to handled by the homeowner. What To Do?

It's all up to you. You might wish to ask more questions about the type of candles you use or curtail your use. You can also discuss whether coverage is available under your homeowner policy with an insurance professional. If you do use candles frequently, you may also want to check your home thoroughly for any stains or discoloration, including any contamination of your heating system. Candle, candle, burning bright? Not if you cause a claim tonight.

Oh Beautiful, For Sprawling Pets

America loves its pets, especially dogs, whose population in U.S. households is estimated at 60 million. While dogs make great companions, playmates, and protectors, they also continue to be a problem for certain dog owners and their insurers. Current statistics indicate that approximately two million people are bitten by dogs each year. Of this total, nearly 800,000 dog bite victims seek medical treatment for their wounds. Each of these incidents are potential lawsuits Have Teeth, Will Bite

With the continued growth of dog ownership, incidents of bites have also climbed. Besides increased ownership, another factor that contributes to the epidemic of bites is that owners often fail to supervise and train their pets. A third big contributor to the problem is that many persons, especially children, do not know how to behave around dogs. Bites occur when:

• a person stares at a dog, which the animal perceives as a threat or challenge
• people attempt to handle dogs who are trying to eat or are nursing puppies
• trespassers invade a dog's territory
• "rough-housing" with a dog escalates beyond playing.

An Issue Of Control

If you look at the situations that surround dog bite incidents, it's easy to see how they can deteriorate into lawsuits. It is also reasonable that such claims often become the grounds for serious action on the part of insurance companies.

Insurance is still designed to handle accidents, and companies are at a severe disadvantage when policies are asked to respond to losses that have a significant element of control. Dog bite claims involve the insured having control over areas such as:

• choosing to own a dog
• choosing the particular breed of dog
• raising the dog in a certain manner
• housing the dog in a certain manner
• exposing the animal to various social situations
• degree of knowledge of the dog's temperament and inclination to bite or attack.

All of the above elements can contribute to lawsuits and to action from an insurer. The "Policy" On Dogs

If you have homeowners insurance and you own a pet, the liability portion of your policy provides protection for liability that arises from pet ownership. In fact, typical coverage is broad enough that; not only are you and your household protected, but even persons who have custody of your pet are also considered insured. There is an exception for certain businesses that, because of their profession and/or expertise, should have their own (business) coverage.Such businesses may include kennels, obedience schools, groomers and professional sitter or walking services. Minimizing The Problem

Dog owners should have the privilege of owning a pet, but the privilege should be balanced with the safety of other people. Owners have a responsibility to raise and handle their dogs in a manner that reduces the chance for a loss. Steps to take include becoming knowledgeable about their breed of dog and about general principles of ownership and care. They should make certain that family members, social visitors, neighbors and strangers are protected from the owner's pets. Owners should also take advantage of resources to help them, such as tips from animal shelters, dog ownership clubs, the AKC and a plethora of Internet sources. Like One Of The Family

Pet owners generally have a very strong emotional bond with their pets. Many owners are often at odds with what they perceive as unfair or arbitrary treatment from insurers who choose to respond so quickly to dog bite claims. Some owners feel that a member of their family is being mistreated. It's unlikely that many insurers would disagree with these feelings….just as unlikely that they would continue to insure a household where a son or daughter either attacked or bit others.

It may not be the fairest set of circumstances, but more insurers are choosing not to give dogs the benefit of the doubt. It's becoming more common for companies to refuse to write coverage for persons who own certain breeds of dogs. Therefore, owners must fight this trend by not taking their pet ownership lightly....because insurers aren't.

The issue of diminished value (DV) has long been a great debate among insurance companies, lawyers, state courts, consumers (including activist groups), auto parts manufacturers, auto repairs shops and others. The focus on whether such losses are covered concentrates on claims that a policyholder would make to his insurer for damage to his or her own car. Answering this question is only clear from one's viewpoint. Supporters of the DV theory say that these losses are real and should be reimbursed under an insurance policy whenever there is accidental damage to a covered car. Other groups say that such losses are similar to depreciation and were never intended to be covered. Factors affecting this debate include:

• Can DV be accurately measured?
• What are the financial stakes of the groups supporting each side of the issue?
• Should DV be considered only when a vehicle is repaired and then sold?
• How is an older car's "pre-accident" value measured?
• Should repair shops or insurers bear the responsibility for DV?
• The wording of applicable insurance policies.
• Current and pending state laws involving DV.
• If DV is paid and a vehicle owner sells the car without a loss of market value, does the DV payment have to be returned to the insurer?

Courts’ Views

Over a dozen, high-profile cases have been decided by courts nationwide over the last 18 months. Most of the cases have resulted in the courts dismissing DV as a legitimate area of coverage, but there has been a notable exception. In November, 2001, Georgia’s Supreme court ruled that DV should be considered whenever a loss occurs to a vehicle, so insurers will have to include DV in any settlements they make.

What To Do About DV

The only thing that is really important to you is your unique coverage situation. Depending upon the age and value of your cars, you may or may not have a concern over this issue. If you do, your best bet is to discuss your concerns with an insurance professional. You can find out what coverage options may be available or, at the very least, gain a better understanding of your existing coverage. Please be sure to read our companion article, "What Is Diminished Value?"

Has your car ever suffered from diminished value (DV)? DV refers to damage to an auto that reduces its market value. There are several different types of DV:

Inherent DV: Describes a general conviction that a wrecked vehicle, which is then repaired, is less valuable than a vehicle that is accident-free. This belief is unaffected by having information on the scope of the repairs or by whether there are any visible signs of repair

Example: Will Prudunt is ready to get a new car. Although his '98 model has served him well, he's ready for a change. After finding his dream car, Will wants to make a good trade-in deal. Will and the sales rep look over his '98 and agree on a $3,950 trade-in. As they discuss the loan papers, the rep asks if the '98 has ever been in an accident. Will slaps his forehead and says "Oops, I was rear-ended three years ago. My insurer paid about $2,000 in repairs." The sales rep then picks up the finance paperwork and says that he will have to re-figure the agreement. When he comes back, the rep says that they can only offer him $2,400 on the trade-in. Will points out that he's never had any problems with the car and that it ran even better after the repairs...the rep won't budge on the lower trade-in offer.

Claim Related DV: This refers to any instance where an insurer's action or practice results in an inferior vehicle repair. This is subjective because parties can argue over what is meant by inadequate repair. Insurer actions that could trigger claims-related DV include an insurer's:

• insistence upon the use of selected auto repair shops
• requirement that a repair facility use after-market, rather than original, equipment and manufacturer parts
• refusal to pay for additional repairs identified by a repair shop.

Repair Related DV: This refers to any instance where a repair shop's action or practice results in an inferior vehicle repair. What is considered a below-standard result that is created by a repair shop may involve:

• completed work which includes below standard labor or improper procedures
• completed repairs where below-standard parts were used when an insurer authorized standard parts
• incomplete repairs when an insurer authorized that all needed repairs be performed.

Now that you have more information on the basics of DV, please be sure to read our companion article, "Is Diminished Value Covered?"

Maybe You Already Know

Have you or a friend ever owned a car that has suffered from diminished value? Are you familiar with the term? Well the concept, represented by the "diminution in value theory" is gaining strength as a major insurance consumer concern. The theory is that damage to an auto often results in a monetary loss in its market value. In other words, there is a monetary difference between a car's pre-accident value and its value after accidental damage has been repaired. Martha's Tale

Martha Bye-lemun had a personal auto policy that originally covered her '96 Buick Regal. Martha bought a '99 Lexus and, instead of trading in her Buick, she decided to sell it. Martha notified her agent and both cars were listed on her policy.

Martha's research showed that the car should be worth around $7,500. The evening of the same day that Martha put her Buick on her front lawn with a "For Sale" sign in its windshield, a very heavy branch from her oak tree fell and smashed the Buick's roof. The Buick was repaired for $1,700. However, when Martha later sold the car; the most she could get was $6,300. Types Of Diminished Value

Diminished Value may exist in several forms which are variously defined, including actual, real, perceived, psychological and others. The following terms describe different types of the Diminished Value (DV) concept:

Inherent DV: This is merely a general conviction that a vehicle which has been wrecked and is then repaired is less valuable. This belief is generally unaffected by:

• having information on the scope of the repairs
• whether there are any visible signs of repair

Example: Will Prudunt is ready to get a new car. Although his '94 model has served him well, he's ready for a change. Will finds his dream car and is now ready to make the best deal he can on his '94. Will and the sales rep look over his '94 and agree on a $3,950 trade-in. As they discuss the loan papers, the rep asks Will if the '94 has ever been in an accident. Will slaps his forehead and says "Oops, I was rear-ended three years ago. My insurer paid about $2,000 in repairs." The sales rep then picks up the finance paperwork and says that he will have to re-figure the agreement. When he comes back, the rep says that they can only offer him $2,400 on the trade-in. Will points out that he's never had any problems with the car and that it ran even better after the repairs...the rep won't budge on the lower trade-in offer.

Claim Related DV: This is actual diminished value that places responsibility for the reduced value on an insurer. It refers to any instance where an insurer's action or practice results in an inferior vehicle repair. Note that this term is subjective because there are various opinions about what constitutes an inadequate repair. What is considered a below-standard result that is created by an insurer may involve an insurer's:

• insistence upon the use of selected auto repair facilities
• preference or requirement that a repair facility use after-market, rather than original, equipment and manufacturer parts
• refusal to pay for additional repair procedures identified by a repair facility.

Repair Related DV: This is actual diminished value that places responsibility for the reduced value on a repair facility. It refers to any instance where a repair facility's action or practice results in an inferior vehicle repair. Note that this term is also subjective because there are various opinions about what constitutes an inadequate repair. What is considered a below-standard result that is created by a repair facility may involve a facility's:

• completed work which includes below standard labor or improper procedures
• completed repairs where below-standard parts were used when an insurer authorized standard parts
• incomplete repairs when an insurer authorized that all needed repairs be performed.

This has long been a great debate among insurance companies, lawyers, state courts, consumers (including activist groups), auto parts manufacturers, auto repairs shops and others. The focus on whether such losses are covered concentrates on claims that a policyholder would make to his insurer for damage to his or her own car. Answering this question is only clear from one's viewpoint. Supporters of the DV theory say that these losses are real and should be reimbursed under an insurance policy whenever there is accidental damage to a covered car. Other groups say that such losses are akin to depreciation and were never intended to be covered. Factors which affect this debate are numerous, including:

• Can DV be accurately measured?
• What are the financial stakes of the groups supporting each side of the issue?
• Should DV be considered only when a vehicle is repaired and then sold?
• How is an older car's "pre-accident" value measured?
• Should repair shops or insurers bear the responsibility for DV?
• The wording of applicable insurance policies.
• Current and pending state laws involving DV.
• If DV is paid and a vehicle owner sells the car without a loss of market value, does the DV payment have to be returned to the insurer?

The only thing that is really important to you is your unique coverage situation. Depending upon the age and value of your cars, you may or may not have a concern over this issue. If you do, your best bet is to discuss your concerns with an insurance professional. You can find out what coverage options may be available or, at the very least, gain a better understanding of your existing coverage.

Some Things Still Aren't Covered

Having an auto insurance policy is a good thing. It shows that you're a responsible driver and it likely fulfills your state's requirements concerning the legality of your sharing the road with other drivers.

However, even if you have auto insurance, there are a number of instances where your automobile policy won't provide coverage. Such instances are called EXCLUSIONS. Why should exclusions exist in an insurance contract? Actually there are quite a few different reasons. Some fundamental reasons are that exclusions:

• help maintain the expense of providing insurance;
• prevent coverage under one policy when it should be covered elsewhere; and
• prohibit coverage for losses that are against public policy.

Let's look at these reasons a bit more closely and provide some examples. Help maintain the expense of providing insurance

If an individual's auto policy could be counted on to respond to every imaginable loss, it would also have an unimaginable premium. Auto insurance premiums are affordable only if insurance companies can exert some control over the losses their policies can be expected to cover. Therefore, automobile policies generally contain exclusions similar to the following example.

This automobile policy does not provide coverage for accidents which involve:

• injuries caused directly or indirectly by a nuclear weapon, reaction radiation or contamination; or by war, civil war, insurrection, rebellion or revolution.
• injuries involving any vehicle inside a facility designed for racing while preparing for ,or competing in, a race.

The first instance involves losses that are beyond any insurance company's ability to control and such losses would likely be far beyond the ability of most insurance company's to pay.

The second instance involves losses that are strictly under an individual's control. Insurance companies certainly want to avoid situations where their customers choose to put themselves and their cars in an excessively dangerous position. Prevent coverage under one policy when it should be covered elsewhere

Most automobile policies won't provide coverage for a loss or injury which:

• happens while being in a vehicle that has fewer than four wheels
• occurs while the vehicle is being used to transport persons or property for profit
• happens while the vehicle is in place and being used as a premise or residence
• occurs while on the job, and workers compensation coverage is either available or required for the bodily injury
• happens while an insured is occupying, or is hit by, a vehicle that is owned or is regularly available to an insured, but the vehicle is not listed on the automobile policy.
• occurs while in a vehicle that's being used in an insured's "business." Coverage still applies if the insured is in a private-passenger auto, an owned pickup or van, or a trailer being used with such vehicles.

These limitations are fair. Their purpose is to make sure that coverage which you purchase for your own car, van or truck listed on your policy does not also provide coverage in situations which are better covered by:

• another person's policy
• worker's compensation or a business policy
• specialty coverage (such as racing events coverage)

other types of policies such as mobile home, recreational vehicle, motorcycle or business coverage. Prohibit coverage for losses that are against public policy

Some examples of this reason are when coverage is denied for losses:

• occurring when the injured person is occupying a vehicle knowing that she or he does not have the vehicle owner's permission
• that were fraudulently staged by the vehicle's owner in order to collect insurance for "phantom" injuries.

Insurance would quickly be impossible to buy if policies were expected to pay for injuries to car thieves or people who fake accidents and injuries.

So remember, without reasonable exclusions, you or I would not be able to enjoy the protection and security that is offered by automobile insurance. If you have questions about exactly what is excluded by your policy, talk to your insurance agent..

After a loss occurs, here are some important obligations you have to meet before your insurer pays for a loss. The duties help an insurer to determine whether payment is due or how much it has to pay.

Notification – You must contact the insurance company with accident details. Notification may be through an agent and it should include the identity and addresses of any injured persons and any witnesses. Quick notification starts the entire claims process, and it helps the insurer to control claim expenses.

Assisting the insurance company – You must help the insurer with the claim's investigation, settlement or with its defense against any claim. Helping includes sending the company copies of any accident-related material. Assistance also means participating in physical exams and interviews under oath. You’re also required to give your insurer access to all records (especially medical) related to the accident and a proof of loss statement (document that has all loss details and information about the lost property).

Repeated requests for help or information may strain relations between you and your company. While companies have the right to thoroughly investigate losses, it should balance its right against your expectation of fair treatment and privacy.

Preserving the damaged property after a loss – Let’s demonstrate this important condition with an example. Tina returns home early in the morning in her convertible and hits a large landscape rock that's in front of her house. The damage is minor, but the impact causes an alignment problem that makes it impossible to close the convertible top. Instead of moving the car into the garage or covering the car, Tina leaves it in the driveway. It sits there all day, sitting exposed to a downpour that severely damages the interior and the car's electrical systems. The car now has to be towed to have the damage inspected when, originally, it could have been driven. Tina’s inaction complicates a once simple claim.

Being too quick can also cause problems. A claimant who repairs or disposes of damaged property before an insurer examination has seriously breached the insurance contract. This breach could result in an insurer refusing the claim.

If you have any questions, your insurance agent is an excellent choice to help you properly understand your insurance policy obligations.

Your home may be destroyed by a fire or storm. You’re scrambling around to get your lives and routines back in order and you may think that things couldn’t get worse. Well, they can and often do because of people who can’t spell contractor without c-o-n.

The period after a serious loss is hectic, emotional and disorienting. Your major concern is to get your home repaired or rebuilt. These elements make you very vulnerable to "CONtractors," people who specialize in victimization instead of construction. While you may be in a hurry to restore your loss, it is critically important to avoid persons who appear on your damaged doorstep offering to start construction. While managing a loss, think of taking precautions such as the following in order to avoid compounding your problems:

• Pay attention to your "gut" being aware of any "feelings" you get about any contractor you speak to
• Refuse to pay any money "up front"; a reputable contractor always works according to a written agreement, spelling out cost of materials, labor and other important work details
• Contact more than one contractor to get competitive estimates
• Make sure that any contractor you talk to provides references and proof that they are insured
• Check references and ask for evidence of how long the contractor has been in business
• If a local chapter is available, call the Better Business Bureau and check for complaints
• Ignore any tactics intended to pressure you into making an immediate financial commitment.

Keep in touch with an insurance professional during such trying times. They’re already committed to providing genuine help.

You take the time and money to identify what you need to insure, what company you wish to protect, reading and understanding the various policies that cover you and your possessions. Isn't the importance of telling your agent or insurance company about a loss obvious? Surprisingly, no, it isn't. The Notification Obligation

Fulfilling the coverage promise of an insurance policy is all about communication. An insurer makes a promise to protect you against certain types of loss, but it can't follow-through unless it knows about a loss. Prompt notification is so important that it is a formal policy provision and your failing to meet its requirements could result in you losing the protection you paid for.

Depending upon the policy, items having to do with notification may be under a separate policy part or spread among several areas. However, a policy typically requires you to do the following:

Contact the agent or insurer as quickly as practical - the practical requirement replaced the previous use of "possible," since some companies unreasonably denied coverage because notification was not instantaneous. The difference between words may seem minor, but it gives you some consideration for circumstances that could affect how quickly you contact your agent or insurer about a loss.

Identify Yourself - Perhaps one day your insurer will be able to recognize your voice over the phone and immediately pull up your file. Until then, be prepared to at least tell your insurer your full name (or, if different, the name the insurance policy is under) and the policy number.

Give adequate details - What, When Where, Why and How. It's important that the insurer has enough information to take proper action, including giving you instructions on how to have your loss handled. This information forms the basis of opening a claim file, assigning the loss to a claims person and beginning investigation of the claim.

Give the insurer copies of any communications regarding a loss or possible loss (such as a threat of a lawsuit) - You should not guess about whether a legal notice or request to be paid for damages is important, even when an actual lawsuit has yet to be filed. Send a copy of the information to your insurer and let them decide. Prompt Notification helps Everyone

Complete and quick communication about losses gives you the best chance to get needed coverage and gives your insurer an opportunity to handle a possible claim efficiently. It also allows the insurer to control issues that could let lawsuits get out of control, such as the ability to offer payment for medical expenses or to contact and question witnesses.

Don't hesitate! Contact your agent or insurer and get your loss handled.

You've Got A Contract

Ownership of an insurance policy means that you have a contractual relationship. Paying a premium to an insurance company creates an obligation on their part to provide coverage. The terms of the coverage is defined by the policy and most companies try to be clear about what you can expect for your premium dollars. It's up to you to understand the critical points of your policy, such as the following:

• Who or what is protected?
• How does coverage take place?
• When is coverage effective?
• How much coverage is provided?
• What are my responsibilities for reporting losses?

As is typical of most contracts, both parties are expected to deal fairly with each other, under the contract terms. As far as an insurance contract, you the policy owner (or insured) and the insurer are partners in the insurance transaction. Partners often learn to understand and work with each other quite well. However, sometimes disagreements occur and you should be aware of how you may look to your policy for help. Arbitration And Appraisal

Two common areas of disagreement are over whether coverage exists and how much should be paid for a covered loss. Arbitration is a tool for addressing the former issue, while the latter is frequently handled by appraisal.

A policy owner may be in a position where, after filing a claim, it is rejected by the insurer. The insurer, in most cases, should offer an explanation for declining coverage. (Of course, if no explanation was given, the policy owner's first step should be to request this information. ) The insured and insurer may discuss their viewpoints and, failing to reach either an understanding or a compromise, may choose arbitration.

This process typically requires each party to:

• select their own qualified arbitrator
• permit the two arbitrators to select a third arbitrator to act as a judge
• allow that agreement among any two of the three parties stands as the decision
• each party pays for its arbitrator and share the expense of the judge

The appraisal process is often similar or even identical as both parities usually:

• select their own qualified appraiser
• permit the two arbitrators to select a third appraiser to act as a judge
• allow that agreement among any two of the three parties stands as the decision
• each party pays for its appraiser and share the expense of the judge

Items that can have a big impact on either process are any local or state laws, the actual provision wording found in the applicable policy and certain rules regarding arbitration/appraisal procedure that may vary by locale.

IMPORTANT: Depending upon the type of policy or the provider of the policy, the terms being discussed here may either be called by another term OR MAY NOT APPLY. Please read your policy carefully. Last Resort

Of course, sometimes arbitration or appraisal fail to settle differences. In such instances, legal action may be the last resort. Note that many insurance contracts also have provisions on seeking legal action. Typically an insured is prohibited from filing a suit unless it's done within a certain time period and only after the insured has exhausted other avenues for resolving the conflict. While lawsuits between contract partners are sometimes inevitable, it's important that insurance consumers be aware of alternatives in resolving conflicts. It's even more important to take advantage of discussing your insurance coverage with a qualified insurance professional. Their expertise can be invaluable in dealing with complex insurance situations.

What Is Loss Control?

Of course you are familiar with insurance, but are you aware that insurance is just one of a variety of methods for controlling your personal exposure to loss? Insurance is a method of loss control. Loss control is important because your personal environment is filled with opportunities where losses can occur. Most folks would like to minimize their chance of suffering a significant loss. The process of identifying and acting upon situations which may lead to losses is called "loss control."

Loss control may involve both simple and complex ways to reduce the likelihood of facing a loss. Besides insurance, you can choose to use protective devices, oral or written contracts to shift the responsibility for a loss, avoid ownership of items that may cause a loss (such as large pets), avoid dangerous hobbies and activities, or change your environment. Let's look at some areas where you might exercise loss control. Loss Control With Your Automobile

• Use a bike or public transportation instead of owning your own car
• Borrow or rent a car when needed
• Take a defensive or advanced driving skills course
• Practice defensive driving
• Obey traffic laws
• Adjust driving habits according to driving conditions
• Park or store your car where there is greater security
• Install security alarm and/or other anti-theft devices
• Properly maintain the car in good condition, especially safety devices such as brakes
• Purchase or use cars that have higher safety ratings
• Don't lend your car to inexperienced or inconsiderate drivers
• Have an emergency kit available, including first aid

Loss Control In Your Home

• Keep the inside and outside of the home in good repair
• Carefully store flammable liquids
• Install security alarm and/or other anti-theft devices
• Consider an apartment or condo which avoids certain risks of home ownership
• Warn visitors about any known hazards in your home
• Avoid running a business from your home
• Take precautions when your premises includes attractive nuisances such as playsets and swimming pools.
• Keep dangerous objects out of the reach of children
• Carefully scrutinize activities that may create a bigger exposure to loss such as dangerous hobbies or highly visible activities (volunteer work for organizations that may create extra chances for losses)
• If you are involved in high risk hobbies or activities, get the training and/or take precautions to be sure that your participation is as safe and responsible as possible
• Take care with heating and electrical devices and systems (such as portable heaters, loads on electrical circuits, etc.)
• Keep first aid kit available
• Have a fire escape plan, including any needed safety devices (such as escape ladders from 2nd floor exits)

• Store important papers in a secure, fire-resistance box or even in the corner of a freezer.
• Keep all the negatives of photos, so they can be reproduced
• Make videotapes of personal property as a record of your possessions
• Make copies of personal videos
• Arrange to exchange and keep important papers and mementos such as copies of videos and photos with friends so they're easier to access and less expensive than storing in a safety deposit box

Of course the help of an expert is invaluable and your insurance agent is a very helpful source for reviewing any actions you're considering to reduce your chances of facing a loss. So contact your agent for his or her expert assistance.

Examples of Unfair Claim Practices

Here are some examples of such practices:

• Attempting to settle a claim based on an application which the company has changed without the insured's knowledge or permission
• Delaying a claim investigation by requiring unnecessary reports or documents which contain substantially the same information
• Failing to act promptly after receiving information concerning an insurance claim
• Failing to adopt or comply with standards that define what is meant by a prompt claims investigation
• When applicable, failing to pay a claim quickly, fairly and equitably
• Failing to promptly settle claims where liability is reasonably clear under one portion of the policy to influence settlement under any other portion of the insurance policy coverage
• Failing to promptly and clearly explain the basis in the policy or the law for either denying a claim or offering a compromise settlement
• Attempting to persuade insureds not to take advantage of the arbitration process
• Misrepresenting significant facts or insurance policy provisions
• Refusing to tell an insured what is happening with a loss within a reasonable time after receiving a completed proof of loss statement
• Denying claims without a reasonable loss investigation
• Offering very low settlements to encourage insureds to sue
• Settling claims for less than the amounts a reasonable person would expect

Of course a good way to avoid problems is to deal with reputable agents and companies who have a strong commitment to properly serving their insurance customers. Your insurance agent would be happy to discuss your concerns and/or expectations about making an insurance claim. Take advantage of his or her expertise.

For more information on claims handling, please see part 1 of this article.

The Problem

The complexity of insurance policy can put you at a severe disadvantage when it is time to file a claim. Requesting payment for a loss is under your home, auto, boat or other policy is what insurance is supposed to be about. You’ve paid your premium with the assurance that, should an eligible loss occur, you or your property will be protected. Faithfully handling your premium payments gives you the expectation that your insure will perform." Performance" of the insurance contract refers to the insurance company's obligation to investigate and, if applicable, pay for a loss, including associated expenses for settling a loss or handling the defense of a lawsuit.

It’s unfortunate, but sometimes an insurance company may not have an attitude toward paying claims that meets your expectations. In fact, a company may actually deal with you in a manner that is unfair. Your right to fair dealings is protected by the efforts of individual state governments. States agencies, typically via a special insurance or commerce division are responsible for seeing that insurance companies and agents are true to the commitment represented by the insurance policy.

Most states actively enforce the requirement that all insurers fairly settle valid claims against their policies. The insurance companies and agents operating within a state are also provided with complete information regarding unacceptable claims practices. A state's rules on claims are based on the National Association of Insurance Commissioners (NAIC) Unfair Trade Practices Model Act. The guidelines developed from the original act, and other regulations (which vary by state) are meant to shield you from practices that are misleading, unfair or deceptive.

For more information on such practices, please see part 2 of this article.