Navigating property insurance
Resources exist for baffled consumers
A months-long ordeal involving an improperly installed roof, a wind storm and an uncooperative insurer ended in a claims payment this past June for one Minot family, thanks to relentless research and dogged determination.
Debbie Fugere Fauske of Minot, who has a background in insurance, said she eventually went to bat for a family member to resolve what turned into a year-long claims process, but not all homeowners might know what to do when faced with policy issues.
“If you have a problem with your insurance, call the insurance commission. That’s what they are there for, and then you have somebody to back you up and help you,” she said.
Trying to resolve issues with an insurance company on your own can be frustrating, said North Dakota Insurance Commissioner Jon Godfread.
“Those individuals work on these products every single day. They’re well versed in the topics and so you’ll be at a disadvantage talking to them,” Godfread said. “Whereas, we can step in the shoes for the consumer. That’s our primary mission is consumer protection and consumer advocacy.”
There is no direct cost to the consumer for the service. The program is funded by a tax on insurance premiums and other revenue sources.
Godfread said the North Dakota Insurance Department’s efforts have resulted in reversals of company denials. At times when that doesn’t happen, the department will provide other options to consider to be made whole, or consumers at least will have the satisfaction of understanding why their policies will not cover their losses and will be more knowledgeable for future insurance purchases, he said.
Fauske said her family member’s problem arose when an adjuster concluded faulty construction by a roofing subcontractor disqualified the claim, despite the premiums paid to insure the roof. She was able to obtain information from the North Dakota Secretary of State about the insurance carried by the out-of-state general contractor, Tollberg Homes. Although it took some convincing, the contractor’s insurers ultimately paid the homeowner’s claim.
Tollberg Homes no longer is in business. City of Minot records show the house in its extra-territorial zone passed inspection, meeting all building codes at the time.
The insurance department continues to look into policy inconsistencies, though, because Safeco, the homeowner’s insurer, had accepted a wind damage claim on the roof in January 2021 — which wasn’t high enough to exceed the deductible — before rejecting the second wind damage claim in June 2021 due to workmanship issues. Liberty Mutual, of which Safeco is a subsidiary, stated it does not comment on specific matters involving policy holders.
Fauske said her experience also reinforced the importance of working with companies that have local connections so you aren’t dealing with out-of-state adjusters. Not all insurance products sold locally have North Dakota connections so it’s important to look at more than price when choosing policies, she said.
Tina Hughes, personal lines manager with First Western Insurance in Minot, said there are so many variables that need to be considered in buying home insurance that seeking out a professional becomes essential. An agent can guide a person through a host of options that would not occur to the average person to think about when buying insurance, Hughes said.
“Sit down with someone you trust to walk through your insurance needs with you and don’t make it about cost. Make it about coverage,” she said.
Wind and hail are the largest loss items insurers see, and homeowners need to understand their policies and the limits companies might place on these types of claims, she said. They need to understand how investments in fire prevention, such as a newer furnace or furnace cleaning, can pay off.
“They need to not call 1-800. They need to not listen to the advertisements that just say you can pick and choose what you want,” Hughes said. “You can’t base it solely on premium. You have to base it on ‘If I have a loss, how am I going to be protected?'”
Ensuring educated consumers is a challenge the insurance department currently is working on, Godfread said. The goal is to increase opportunities for the department’s consumer assistance education coordinator to get in front of the public, whether speaking to high school students as they enter adulthood or seniors facing changing needs with their insurance products.
“There’s definitely a big insurance knowledge gap,” Godfread said. “A really good insurance agent can can help a lot with that, but again, it comes down to there’s some personal responsibility for individuals.”
He said the department can be a resource for consumers who are shopping for insurance by providing answers to questions and by identifying questions to ask their agents once they are ready to buy.
“We’ve got people who are ready, willing and able to help assist you and navigate what can be sometimes complicated,” he said. “There are no dumb questions when it comes to insurance, whether that’s on the front end before you buy, as you’re buying, during a claims process, during an annual review.”
As the state licensing agency, the department reviews the solvencies of insurance companies and conducts background checks and testing every three years for agents. Still, consumer complaints can arise, and his office investigates when they do, Godfread said.
“All of it gets back to consumer protection and making sure that the insurance that’s being sold in North Dakota is fair, it’s equitable and that our consumers in North Dakota are getting what they pay for,” he said.
– North Dakota Insurance Department: https://www.insurance.nd.gov/consumers/insurance
– National Association of Insurance Commissioners: visit https://content.naic.org and click on “consumer” at the top of the page. A guide for homeowners can be found by going directly to https://content.naic.org/sites/default/files/publication-hoi-pp-consumer-homeowners.pdf.
— Insurance Information Institute: www.iii.org