Collecting Money From Insurance

Collecting money from insurance companies can range from an extremely easy process to a complex nightmare requiring the assistance of a lawyer. Insurance companies are not in business to give money away. But they will pay on claims that they are required to by the contract they signed.

Easy Collections

• In a straightforward case where the insurance company obligation is cut and dried, collecting on an insurance policy is relatively easy. For instance, a life insurance policy where the person obviously died of natural causes is pretty simple. All that is required is proof of cause of death and proof of insurance. The company will usually promptly make arrangements for payment. Another simple claim might be on a homeowner's policy where a storm has obviously caused damage to your home.

A More Complex Life Insurance Situation

• On the other hand, any questions about the circumstances of the death or the eligibility of the beneficiary and the collection process can drag on for years. As of 2010, 42 states have laws called "slayer statutes" that prevent the listed beneficiary from benefiting from a policy if they "intentionally caused" the insured's death. This may sound like a bad movie plot, but there are numerous cases of spouses hiring "hit men" in order to collect on an insurance policy. The remaining states rely on common law or precedent to produce the same result.

Cases Involving Property Damage

• In cases involving property damage, such as a car accident, the party causing the damage is generally responsible. However, insurance companies can assign a percentage of guilt, so that the damaged party may only receive 80 percent of the claim if they were deemed 20 percent at fault. Some states have "no-fault" insurance provisions, which allow you to collect no matter who was at fault, thus simplifying the process and speeding your ability to collect.

Cases That Require A Lawyer

• When the case in question requires a subjective settlement, such as an accident involving an injury, it is often difficult to determine the extent of the insurance company's liability. There is of course a maximum: the limit of the policy coverage. But if the limit is high, the insurance company may try to see how little it can get away with paying. If you have injuries where you don't know how much the treatment will finally end up costing, you need a lawyer to protect your interests and ensure that you get all to which you are entitled.

Whom To Contact

• Initially, you should contact your own insurance company. The company will generally help you begin the collection process. In some cases, the company may pay your claim and then try to collect from the guilty party's insurance company for you. In other cases, the company may just act as a resource for you. If you feel you have been cheated by an insurance company, you can contact your state's department of insurance, which has the task of regulating all insurance companies within its state. You can usually find a claim form on the department's website.