5 Things Never to Say to Your Insurers

Some words are red flags to insurers and using them could mean that your claim might be delayed or even denied.

1. "I Think ..."

Never begin a statement regarding a claim with these words. If you aren't sure, don't guess. What you say could cause your claim to be delayed or denied, says attorney Vedica Puri. And if you're wrong -- say, you report driving at 30 miles per hour before an accident but police later prove you were going 50 -- it could hurt your credibility.

Particularly beware of speculating on blame or causation. For example, if you suggest that a water leak is due to a construction defect, you could give the insurer an out if that's a policy exclusion.

Stick to the facts. Should the insurance rep ask you a question you can't answer, simply say, "I don't know." If the person is taking a written or recorded statement, ask for a transcript to review for misstatements.

2. "I Got Whiplash"

Fraud costs auto insurers up to $6.8 billion a year, reports the Insurance Research Council. And suing for damages caused by whiplash is a fraudster favorite ("Oh, my neck!"). Merely mentioning the term is likely to get your claim flagged for further investigation, says Amy Danise of Insure.com.

Whiplash is a specific diagnosis. If a doctor says that you have it, then you should report it as such. Other wise, if you feel neck pain, just refer to it that way.

3. "It's an Experimental Treatment"

Truly experimental or investigational medical procedures are typically not eligible for health insurance coverage. So if a doctor tells you he wants to experiment with a treatment, don't represent it using those words. "In medical terms it may not actually be experimental or investigational," explains Danise. "If it's proven effective, your doctor deems it medically necessary, and it's not an exclusion, it should be covered." Verify with your doctor that it meets the above litmus tests before going to the insurer.

4. "My Basement Flooded"

With homeowners insurance, "flood" is a red flag. "The word refers to an act of weather or an overflow from a nearby body of water," says Danise. "And a standard homeowners policy doesn't cover it. You'd need flood insurance."

So don't use the f-word if your basement is knee-deep in water because of a burst pipe. Damages from such an incident should be covered by a homeowners policy. But calling it a "flood" could muddy the waters, so to speak.

5. "Just Send Me a Check"

When filing a home or auto claim, don't emphasize that you're just looking for the cash.

"If you were to say, 'I don't care about the roof leak, I just need the money,' that admission could slow things to a halt," says Puri. Technically, you're supposed to use the payout to make the repair for which you filed. While it's true that most insurance companies aren't going to check up on you, you'll certainly raise the fraud unit's suspicions if you imply that you won't. And then you might lose out on the money altogether.


Are You Hard to Insure?

What prompts an insurer to deny coverage? The reasons for rejection fall into a handful of categories, but they all boil down to one maddening fact: Companies don't like to sell insurance to people who are likely to use it.

In some cases, there isn't much you can do to remedy the situation — if you live in an active flood plain, for instance. But some things you do have control over. After all, do you really need that woodburning stove? Here's a list of things you might think about changing — if you can — plus a list of last resorts.


Potential Hazards
Exposure to things like earthquakes and floods is obviously a problem. But anything on your property that could bring about liability claims could also cost you. For example, you may be refused coverage or will certainly have to pay more if you own an unfenced swimming pool, expecially if it has a diving board or a water slide. State Farm considers a trampoline a potential risk.

Unsafe Conditions
The insurer may deem your home or neighborhood unsafe due to anything from the crime rate to the incidence of fire in buildings like yours. Insurers will certainly want to know if fire-resistant materials were used to construct your home — something to keep in mind if you're thinking of buying a fixer-upper. They will also check to see if you maintain your property. Signs of disrepair, such as cracked steps or a leaky roof will be taken into consideration when agents are deciding whether to write or renew a policy.

Mean Pets
Believe it or not, unleashed or unfriendly dogs are seen by insurers as potential causes of liability claims. "If we investigate a home and find that a dog seems to be threatening, or if someone owns a pack of dogs," says State Farm spokesman Jerry Parsons, "then we might decline coverage."

Wood-burning Stoves
Wood-burning stoves have become a much sought-after item among home shoppers looking for coziness or charm. But, due to danger of fire, insurers see nothing charming about them. If you own one, most companies will either increase your premium or, if you live in an area far from hydrants or a local fire station, may refuse your business altogether.

Heavy Claims Filing
As unfair as it seems, this is a primary reason for denying coverage. Insurers may consider several claims filed within a couple of years as a sign that you are not taking care to protect your home and possessions, or even that you are engaging in insurance fraud, says Peter van Aartrijk, a spokesman for the Council of Independent Insurance Agents. Many companies would rather see one very large claim than several small ones. Say you have a $50,000 claim in your recent past for damage from a house fire caused by faulty electrical wiring. You can probably find a new policy fairly easily, since in all likelihood the electrical system would have been brought up to current building codes in the course of repairs. But if every six months or so you file a claim for the loss of a ring, a watch or a set of golf clubs, finding a new homeowners policy is going to be something of a challenge. Try using an independent agent who will not only shop around for you, but can also make a case to underwriters that you are a responsible homeowner, and have just had a string of bad luck.


Where do you turn when no one else will have you? Check if your state offers a Fair Access to Insurance Requirements (FAIR) plan. FAIR plans are government-backed policies for folks who have been turned down everywhere else because their property is in a high-risk area. They are often more expensive and less comprehensive than standard policies, but may be your only option. Currently 35 states and the District of Columbia offer FAIR plans,