Insurance double-dipping?
October 19, 2012 12:40 PM Subscribe
Our storage unit was broken into, and about $5000 worth of stuff was stolen. We purchased an insurance policy with the unit (it was mandatory), and we also have renters insurance (with our auto insurance company). Can I file with both of them?
My dad claims that since we are paying for both policies we should be able to collect from both. This seems kinda fishy to me. Thoughts? If I can only do one, which would you recommend?
My dad claims that since we are paying for both policies we should be able to collect from both. This seems kinda fishy to me. Thoughts? If I can only do one, which would you recommend?
generally speaking, no, you cannot double-recover on a single loss, even if you are over-insured. exceptions will, generally speaking, be explicitly spelled out in your policy/policies. I am not *your* lawyer and this is not legal advice, just a general principle of coverage.
posted by crush-onastick at 12:50 PM on October 19, 2012 [1 favorite]
posted by crush-onastick at 12:50 PM on October 19, 2012 [1 favorite]
Sure. They can sort out between them who covers the loss as they would share the cost. You don't get to collect twice the cost of the damage and you don't get to profit from having insurance. I don't understand why you would want to do that, though – you'd be paying two deductibles, if applicable, and dealing with the hassle of making two separate claims.
posted by halogen at 12:51 PM on October 19, 2012 [1 favorite]
posted by halogen at 12:51 PM on October 19, 2012 [1 favorite]
It's double dipping. File a claim with one of the companies (the one with the best coverage usually). If it's denied, then file a claim with the other one.
But you can't get both.
The purpose of insurance is to be restored to what you had before the theft. Once that's been resolved, then you no longer have a claim.
posted by inturnaround at 12:51 PM on October 19, 2012 [2 favorites]
But you can't get both.
The purpose of insurance is to be restored to what you had before the theft. Once that's been resolved, then you no longer have a claim.
posted by inturnaround at 12:51 PM on October 19, 2012 [2 favorites]
You won't get double the payout, and it may be more trouble than it's worth. It's called "double dipping," and insurance companies have lots of stops in place to make sure you don't do that.
posted by xingcat at 12:51 PM on October 19, 2012
posted by xingcat at 12:51 PM on October 19, 2012
You could speak to a lawyer. Whether your renter's insurance applies to the items in your storage unit will depend on what those items were, that is for sure. If they are business items, they will not be covered.
On top of that, some policies allow for additional coverage, while others specifically exclude payment for the same loss by a different insurance policy. So I would have an independent insurance attorney look at the terms of your policies, and/or talk to an adjuster or your insurance rep about what is possible.
posted by phaedon at 12:52 PM on October 19, 2012
On top of that, some policies allow for additional coverage, while others specifically exclude payment for the same loss by a different insurance policy. So I would have an independent insurance attorney look at the terms of your policies, and/or talk to an adjuster or your insurance rep about what is possible.
posted by phaedon at 12:52 PM on October 19, 2012
Best answer: My dad claims that since we are paying for both policies we should be able to collect from both.
He's probably right, assuming your renters policy has coverage for your property in storage units at all.
What's going on here is called "coordination of benefits," and it's extremely common. Say you get in an accident while you're driving someone else's car, and you hurt someone. The injured party may be able to recover from both the owner of the car's insurance and your insurance. The policies will have language about which one pays first.
That's basically what's going on here. You have two policies which potentially cover the same loss. How they interact is going to be a question which can only be answered by examining the policies.
Note, though, that double recovery is categorically prohibited. You can't recover from both policies for the same items lost. You can, however, "stack" the policies on top of each other, increasing the available coverage limit. So you've got a $5,000 loss. If you've got more than $5,000 in coverage on the unit policy, then you're fine. But if you've only got $2,500, you would then want to call your renters' company and say "Hey, the unit policy covered the first $2,500 of the loss, but I lost $5,000. Pay up." What you can't do is recover for the same TV from both companies. That's insurance fraud, and it's a felony.
My first instinct, is to file with your unit policy first, and then turn to the renters' policy if you run out of coverage. The reason is that the unit policy is probably primary for this loss--though you'll absolutely need to read the policies to figure that out--and that renters' and homeowners' policies are probably more sensitive to loss histories than storage unit policies. So you file the claim with the unit policy, then call your renters' company and say "Hey, I suffered a loss which I think is covered. But I've got another policy which should pay out first, and I'm going to try to recover from them. I may be coming to you for benefits--I'll keep you posted--but I just want to provide adequate notice of the loss as required by the policy." That way, even if you don't wind up going forward with a claim for six months or so, they're on notice right away and there won't be any funny business on that score later.
Of course, there may not be coverage under the renters' policy for a variety of reasons, but you can only find that out by asking.
On the deductible: you're probably only going to have to pay one deductible. Say you've got a $2,500 limit and $250 deductible on the unit policy and a $20,000 limit and $500 deductible on the renters' policy. You eat the first $250 of the loss. The unit policy pays the next $2,500, and the renters' policy pays the remaining $2,250. You shouldn't have to pay the deductible on the renters' policy, because as far as the renters' company is concerned, they're getting away with a $2,750 deductible, which is awesome for them.
The short answer is that, yes, provided both policies have coverage, both limits would be available to recover from if the loss exceeded the limits on the unit policy.
IANYL, TINLA
posted by valkyryn at 12:56 PM on October 19, 2012 [15 favorites]
He's probably right, assuming your renters policy has coverage for your property in storage units at all.
What's going on here is called "coordination of benefits," and it's extremely common. Say you get in an accident while you're driving someone else's car, and you hurt someone. The injured party may be able to recover from both the owner of the car's insurance and your insurance. The policies will have language about which one pays first.
That's basically what's going on here. You have two policies which potentially cover the same loss. How they interact is going to be a question which can only be answered by examining the policies.
Note, though, that double recovery is categorically prohibited. You can't recover from both policies for the same items lost. You can, however, "stack" the policies on top of each other, increasing the available coverage limit. So you've got a $5,000 loss. If you've got more than $5,000 in coverage on the unit policy, then you're fine. But if you've only got $2,500, you would then want to call your renters' company and say "Hey, the unit policy covered the first $2,500 of the loss, but I lost $5,000. Pay up." What you can't do is recover for the same TV from both companies. That's insurance fraud, and it's a felony.
My first instinct, is to file with your unit policy first, and then turn to the renters' policy if you run out of coverage. The reason is that the unit policy is probably primary for this loss--though you'll absolutely need to read the policies to figure that out--and that renters' and homeowners' policies are probably more sensitive to loss histories than storage unit policies. So you file the claim with the unit policy, then call your renters' company and say "Hey, I suffered a loss which I think is covered. But I've got another policy which should pay out first, and I'm going to try to recover from them. I may be coming to you for benefits--I'll keep you posted--but I just want to provide adequate notice of the loss as required by the policy." That way, even if you don't wind up going forward with a claim for six months or so, they're on notice right away and there won't be any funny business on that score later.
Of course, there may not be coverage under the renters' policy for a variety of reasons, but you can only find that out by asking.
On the deductible: you're probably only going to have to pay one deductible. Say you've got a $2,500 limit and $250 deductible on the unit policy and a $20,000 limit and $500 deductible on the renters' policy. You eat the first $250 of the loss. The unit policy pays the next $2,500, and the renters' policy pays the remaining $2,250. You shouldn't have to pay the deductible on the renters' policy, because as far as the renters' company is concerned, they're getting away with a $2,750 deductible, which is awesome for them.
The short answer is that, yes, provided both policies have coverage, both limits would be available to recover from if the loss exceeded the limits on the unit policy.
IANYL, TINLA
posted by valkyryn at 12:56 PM on October 19, 2012 [15 favorites]
Was writing something; valkyryn beat me to it. And did it much better than I would have.
Go with their answer!
posted by Lemurrhea at 2:16 PM on October 19, 2012
Go with their answer!
posted by Lemurrhea at 2:16 PM on October 19, 2012
Your renter's insurance may have a stipulation that it doesn't cover goods in transit or in storage. Mine did.
posted by Corrective_Lenses at 2:24 PM on October 19, 2012
posted by Corrective_Lenses at 2:24 PM on October 19, 2012
Response by poster: Thanks, y'all. I suspected that my dad was incorrect!
posted by radioamy at 4:27 PM on October 19, 2012
posted by radioamy at 4:27 PM on October 19, 2012
I worked as insurance analyst and my advice to you is to talk to an insurance specializing lawyer. They are experts and they will get you everything that you are entitled. You almost assuredly will under claim and be under compensated without one. Insurance companies count on your naivety and mistaken belief of insurance competence to manage their costs. Don't let them
posted by srboisvert at 4:50 PM on October 19, 2012
posted by srboisvert at 4:50 PM on October 19, 2012
srboisvert: "I worked as insurance analyst and my advice to you is to talk to an insurance specializing lawyer. They are experts and they will get you everything that you are entitled. You almost assuredly will under claim and be under compensated without one. Insurance companies count on your naivety and mistaken belief of insurance competence to manage their costs. Don't let them"
Based on my own experience dealing with an insurance company after I was injured due to the negligence of one of their policyholders, this is excellent advice. I am so glad I had a lawyer to deal with them on my behalf. It was most definitely to my benefit financially — he did things like get my HMO to knock $1,000 off the medical lien they'd placed on any settlement I might recover, just by asking them to do it. Would I have even known that was possible? Heck no.
posted by Lexica at 7:20 PM on October 19, 2012 [1 favorite]
Based on my own experience dealing with an insurance company after I was injured due to the negligence of one of their policyholders, this is excellent advice. I am so glad I had a lawyer to deal with them on my behalf. It was most definitely to my benefit financially — he did things like get my HMO to knock $1,000 off the medical lien they'd placed on any settlement I might recover, just by asking them to do it. Would I have even known that was possible? Heck no.
posted by Lexica at 7:20 PM on October 19, 2012 [1 favorite]
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Trying that sounds at very best like an invitation for both companies to pass the buck between one another.
posted by holgate at 12:48 PM on October 19, 2012