Yes, more often than the horror stories suggest, especially with the regional New York carriers we place most of our business with. The real risk isn’t a company looking for a reason to deny you. It’s a policy that was never built to cover the loss in the first place, usually because someone chased price over substance when it was written. Here’s what that looks like in practice, told honestly, including the one that didn’t go the way anyone wanted.
Quick Answers Before We Get Into the Stories
Does insurance really pay out, or is that just what agents say? Most claims are paid, and the regional New York carriers we work with have, in our experience, overwhelmingly erred toward paying rather than looking for reasons not to. The amount and the outcome still depend heavily on how the policy was built before the loss happened, which is the whole point of this article.
Why do some claims get denied? Two reasons come up most often. The policy only covers specific, named causes of loss and the cause of the damage wasn’t one of them, or a lack of maintenance let a smaller problem turn into a bigger one the policy was never meant to cover. Both are form and upkeep issues, not bad-faith issues, and both are almost always avoidable.
Does having a local agent change the outcome of a claim? In our experience, yes. The difference shows up before the loss, in the limits and the form that were selected, not in some negotiation that happens after something goes wrong.
What’s the single biggest factor in whether a claim goes well? The limits and the form selected at the time the policy was written, long before anyone thought a claim was coming. Chasing the cheapest price at that stage is where most of the real risk gets introduced.
When Carriers Paid Before Anyone Even Asked
After Tropical Storm Irene in 2011 and Tropical Storm Isaias in 2020, Sterling Insurance paid food spoilage claims to affected homeowners with little to no proof required. No itemized list of every ruined item in the freezer, no fight over what counted. They paid.
Around the same time as Isaias, in the early days of COVID, several New York regional carriers, including Preferred Mutual and NYCM, issued auto insurance premium rebates and credits to policyholders on their own, not because state regulators required it. Rebates went to those who paid in full, credits to those still on a payment plan. Nobody filed a claim for that money. Fewer people were driving, so the carriers sent it back without being asked.
Most people have forgotten both of these happened. That’s worth sitting with. If insurers were really built around finding reasons not to pay, food spoilage claims with little to no proof and unprompted premium rebates are exactly the kind of payouts that wouldn’t have happened.
When the Right Limits Made All the Difference
A client came to us with an auto policy carrying $50,000 per person and $100,000 per accident in liability coverage, often written as 50/100. We reviewed their situation and moved them up to $250,000 per person and $500,000 per accident, or 250/500.
Our client was later at fault in an accident that seriously injured another driver. The claim settled at $250,000, and our carrier paid the full policy limit.
Under the old 50/100 limits, our client would have been personally responsible for up to $200,000 of that settlement out of their own pocket. Under the 250/500 limits we put in place, the claim was paid in full at the top of what the policy allowed, and our client never had to write a check.
When a $300,000 Loss Went Exactly as It Should
Not every story here needs a complication in it. Sometimes the system does exactly what it was built to do, and that’s worth showing too, because it’s the standard every other story in this series gets measured against.
A client paid his premium for eight years on a well-built policy without ever filing a claim. Then, in mid-March of this year, a house fire caused more than $300,000 in damage. By May 1st, six weeks later, the insurer and the client had agreed on the payout and funds were in hand to begin repairs.
Six weeks, start to finish, on a multi-six-figure claim. No drawn-out dispute, no runaround, no itemized inventory demand that dragged on for a year. A serious loss, handled the way it’s supposed to be handled.
The Honest One: Where Coverage Fell Short
We’re not going to pretend every claim ends well, because that’s not true and you’d see through it anyway.
A client came to us through an agency we acquired, already holding a named peril policy, a form that only pays for damage caused by a specific list of covered events. During a policy review after the acquisition, we told her it was a lesser form and recommended moving to broader coverage. She chose to keep the policy as it was.
Water later leaked through an older roof. The claim was denied because the water damage wasn’t one of the named perils on that form. Roof condition had nothing to do with it, even a newer roof would have leaked the same way and still wouldn’t have been covered. An open peril policy, sometimes called a special form, covers everything except what’s specifically excluded, which would very likely have included this kind of loss.
We’re telling you about this one on purpose. Not because the advice wasn’t given. It was. But coverage only works if it’s acted on, and that’s as true of the advice as it is of the premium.
What This Means for You
None of these outcomes came down to luck or to which company happened to be on the policy. They came down to decisions made before any of these losses occurred: what limits were in place, what form was selected, and whether someone was paying attention to how well that coverage still matched the risk.
The carriers we work with, in our experience, aren’t the problem. Chasing the lowest possible price, and ending up with a policy nobody checked against what could go wrong, is where things fall apart. That’s the honest answer to “is insurance worth it.” Not automatically yes, and not automatically no. It’s worth it when it’s built right, by someone who’s paying attention to your specific situation, not a generic policy sold off a script.
More Straight Talk
Can My Home Insurance Company Drop Me in New York?
Does My Auto Rate Go Up Even When the Accident Wasn’t My Fault?
I Haven’t Had a Claim in Years, Do I Really Need Business Insurance?
Why Did My Auto Insurance Go Up With No Accidents or Tickets? (coming soon)
What Is My Homeowners “Insurance Score,” and Why Does It Matter? (coming soon)
Does My Homeowners Policy Cover an Injury During a Home Business Delivery? (coming soon)
Is “Full Coverage” Actually a Real Thing? (coming soon)
Why Do Insurance Companies Use My Credit Score or Zip Code to Set My Rate? (coming soon)
Will My Insurer Lowball Me After a Big Claim? (coming soon)
What Business Insurance Coverage Do I Actually Need? (coming soon)
Do I Really Have Enough Homeowners Coverage? (coming soon)
Will Filing a Business Claim Get Me Cancelled? (coming soon)
Curabba Agency has been doing this work in the Hudson Valley for more than 80 years, and stories like these are why. If you want someone to take an honest look at what you’re covered for, not just what you’re paying for, give us a call. No phone tree, no pressure, just a real conversation about your policy.