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I have a friend who also happens to be a contractor. He just called with an insurance question.
It appears that one of his clients’ bath rooms has flooded because of a clogged drain-pan in the shower. He is over at her house right now trying to fix it but the problem is that her insurance company is denying the claim. They are saying that she did not file the claim within the time frame required by her policy.
My friend was confused. He asked me, “I have never heard anything like this. What can she do?”
Since I am no longer licensed to work with property and casualty insurance, I could only give him limited advice.
- Tell her to read her policy.
- If, after she has read her policy she is still confused, call the Texas Department of Insurance.
I am not licensed or qualified to give specific advice on issues of property and casualty insurance. I am a Life & Health Insurance Counselor. I am able to advise on life and health insurance matters.
If he had called me about a friend who was being denied a hospital claim, I could have been more helpful. I would have still probably recommended the same two things.
READ
Although they are called policies when you use them, they are called contracts when there is a problem. Technically, insurance policies are policies of “adhesion.” That means that if you do not speak up and complain before there is a problem, the courts can assume that by paying your premium, you have “adhered” (i.e. accepted) the terms of the contract.
That means that the insurance company has the right to deny a claim if you do not abide by the terms of your policy. Even though you may innocently remain ignorant of minute limitations in the policy, “ignorance is not an excuse in the eyes of the law.”
Most states will give you 10 days to review your insurance contract to make certain it is acceptable. If you do not speak up within 10 days of getting a life or health insurance policy, you are bound by its terms and limitations.
I know that insurance policies are not the most interesting reading materials. Never-the-less, you should read your policy when you get it. Make certain you know what you should and should not do.
Last year one of my clients did not read her policy. Her son was in an accident that smashed his hand. He was covered on a PPO policy. There was no problem, whatsoever, with the medical
bills from the Emergency Room. His treatment there was paid for by the insurance company like normal. All she had to pay for was the E.R. co-pay.
The problem arrived a couple of days later. Her son had to have surgery. They elected to have the surgery in a non-network hospital because it was a couple miles closer to their house. She had not read her insurance policy. She did not realize that the insurance company required her to get non-emergency treatment at a network hospital.
If the son’s surgery had been done at a network hospital her portion of the bill would have been less than $ 4000. Because she failed to read her policy and went to a non-network hospital, her bill was a little over $ 18,000.
She learned the hard way that insurance policies are actually contracts. They can be quite beneficial if they are used correctly. They can be a waste of money if they are not used the way they are meant to be.
Read your policy to make certain you know how to use it.
DEPARTMENT OF INSURANCE
Insurance companies are required to explain why they do or do not pay a medical bill for you. That explanation is on the form, EOB (Explanation of Benefits.) Insurance companies often use simple codes to explain their actions on that form. If you are able to decipher their codes, the form should make sense to you. If you are unable to read their codes, call your insurance agent or your state’s Department of Insurance. They should be able to help you. (Be advised, they will probable want to see the front and back of the EOB. You won’t be able to get an immediate answer over the phone. You will have to email or fax the EOB to them so they can review the code.)
The EOB will explain why your medical claim was paid the way it was. If you followed the requirements in your policy, your claim should be paid with no problems according to the terms of your policy.
If you have followed the requirements in your policy and your insurance company still is giving you a hard time, you should contact your state Department of Insurance for help. They will review the situation. If you have a legitimate complaint, the Department of Insurance has the ability to force an insurance company to honor its contract.
If, however, your claim is based on assumption and not the wording in your insurance policy, you can find yourself being told, “There is nothing we can do.”
CONGRESS
If that happens, the only thing left for you to do is run for congress. If you can get the sympathy of enough members of congress you can change the rules in the middle of the game. It does not make any difference if you read your policy or not.
If, however, you do not want to run for congress, make certain you read your insurance policy when you get it to make certain you know what is required. Don’t just assume your new insurance policy works exactly like your old one. There are differences between insurance policies.
Not only should you read your policy when you first get it, you should dust it off and read it before you have any non-emergency or non-routine medical treatment. If you have to go to a hospital, read your policy before you go. Make certain that you are using a network hospital.
