Taking action to protect consumers who are denied insurance claims

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What do you do when your insurance claim is denied and you’re left with a bill you can’t afford?

Fox 59 is taking action to find out how you can, for free, get your claim investigated by an outside agency.

“I just do not understand how this (isn’t) covered by insurance,” said Karen Schmidt, who filed a claim after water started leaking from a broken pipe inside her wall.

She said her insurance company contends that this is a “wear and tear item” so it isn’t covered. She was thinking a wear and tear item would be something like a fridge or a water heater.

“Something that I use constantly and could actually have control over,” Schmidt said.

Due to cancer, she’s disabled and lives on social security.

She said the $2,300 cost to fix the leak is going to do her in financially. She said she wonders what the point is of insurance, if it doesn’t cover issues like this.

“I don’t understand how the world has gotten so callous and they don’t have the morals,” Schmidt said.

We took her complaint to Dennis Rosebrough with the Indiana Department of Insurance. He said the law gives them the power of investigation to protect people like Schmidt, if necessary.

“Sometimes it is just a matter of clarification and sometimes there are those issues where we will weigh in and say no, your insurance company should have covered this,” Rosebrough said.

The Department of Insurance hires external consultants to look at the responses from insurance companies to determine validity. There’s a separate enforcement division to make sure the company follows through.

“It depends on what her policy says, quite candidly. That’s why it’s very difficult because there is no boilerplate or template homeowners’ policy,” Rosebrough said.

Insurance policies are customized so customers must read through and understand a policy before they sign it, he said.

“It is very difficult to say, ‘Well, this should be covered.’ You can’t say that until you read the policy because you don’t know,” Rosebrough said.

Meantime, Schmidt has been going without regular hot water for more than two months and said she believes this amounts to a scam.

“They want their premium, but they don’t want to pay,” Schmidt said.

The Department of Insurance already sent the complaint to the insurance company. They have 20 total days to respond and face a $500 fine if they don’t.

If you think you’ve been wronged by your insurance company, you can file a complaint too. Visit this link to file a complaint online.

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