Hailstorms, and similar natural disasters, serve to remind us that, even with our 21 st century smarts, we still cannot control the forces of severe weather. No matter all our advanced technology, all we can do is watch helplessly as our homes, offices, cars and property are damaged by catastrophic hail or winds. It is a terrible feeling.
Since these events are so unpredictable, and since they can cause thousands of dollars to repair, we buy insurance to limit our financial exposure for the huge cost of these events. Instead of paying $15,000 for a new roof, we will pay no more than the "deductible" for the repair (usually around $1,000—even so, still a very large sum for most of us). When we pay the premium for the insurance each month, or quarter or year, we hope that this is a product we will never have to use. The day after the storm we learn for the first time whether the insurance that we have faithfully paid for year after year will step in and responsibly, and timely, handle the repairs—or whether our premium money was a bad investment after all.
Although most insurance companies want to do the right thing for their customers ("policyholders"), the process is baffling to most of us. If you have a claim from damaging weather events, it is important to know right away what your own insurance policy states. Find the actual written insurance policy. If you can't find it easily, ask the insurance representative (or your insurance agent, if you have one) to provide to you a copy of the policy language you have paid for. This language sets forth the "rules of the game." The process and procedures taken by the insurance company will be described in the insurance policy—as are your obligations and duties under the policy. The insurance representative must follow the rules of the insurance policy for your claim. So long as you know what the rules are, you won't be surprised—and you can even get ahead of the process by anticipating what will be asked of you as the claim moves along. Don't ask to be treated differently than what the policy says: it can't happen. It's not that the insurance representative doesn't want to help you, it's just that he or she cannot change the procedures and rules of your insurance policy.
Colorado Insurance Laws
Since 2008, Colorado insurance companies have been subject to a new law that requires them to refrain from "unreasonably" delaying or denying insurance benefits for claims such as storm damage. (C.R.S. 10-3-1115) This law is a great consumer protection for Colorado insurance policyholders. Before this law, an aggrieved policyholder would have to go to court and prove that the insurance company "recklessly disregarded" "standard insurance claims practices" in the handling of his claim. Before this law, in order to recover any damages more than just the amount of the claim, the policyholder had to prove he had particular damages caused by the insurance company's conduct in handling his claim. Under the new law, if the policyholder simply convinces a jury that his insurance company acted "unreasonably" in denying or delaying his claim, the statute provides that the insurance company has to pay double the amount of the claim. (C.R.S. 10-3-1116).
Under the new law, as long as the policyholder does his part to move the claim along, his insurance company cannot drag its heels to get the claim resolved and paid. The new law has changed the way claims such as storm damage are handled. Insurance companies now inform policyholders of their rights and duties under the policy, and keep their policyholders regularly updated of the various steps in the claim process. The new law makes the insurance company accountable to its policyholders to process claims in a timely manner. In response, insurance companies are prompted to move their claims promptly, knowing that its policyholders now have clear legal remedies to enforce those timely claims practices.