Like most businesses, homeowner’s insurance is quite obviously conducted with a “for profit” mindset. There is no news there. One of the things we find most interesting about certain insurers, especially some of the big named brands you find covering a large number of homes, is that they are some of the wealthiest corporations you find in America. In 2020, you’ll find that State Farm placed 36th in the Fortune 500. They placed higher than Facebook. Higher than Fedex. Higher than Lowe’s, Pepsi, or the Walt Disney Company. Close behind and still in the Top 100 are Allstate, Liberty Mutual, and Progressive. The point to make here is that insurance companies, as much as the rest of corporate America, want to increase their bottom line and produce a great annual report to shareholders. They can increase that bottom line by reducing their risk and decreasing or limiting certain benefits. Because of this, many homeowner’s have found that they had to fight for certain coverages when they needed help the most. Insurance companies can save thousands by underestimating the value of each claim, or by offering a fraction of the value of that claim. There are often incredibly high annual costs for homeowner’s insurance, which include complex and complicated language built into a policy that is more meant to protect the insurer, but as the insured we think we have that safety net when the unexpected occurs. It is unfortunate and all too common that we hear the exact opposite is happening when some homeowners file a claim.
A common mistake many homeowners make when they file a claim is how they report their damage to the insurance company, which paves the way for an easy claim denial on that initial call. For instance, saying “a tree fell on my home” could be considered as an exclusion in your policy. In actuality, the root cause of the tree falling was from ice or snow damage, which could actually be covered. Sometimes filing a claim is simple, easily understood, and no hassle to complete. Other times, especially when the damages are extensive or affect a widespread area like you see in natural disasters, claims are commonly denied or underpaid when they could be covered. The majority of insurance claim disputes are often fought over incorrect damage estimates, where many storm damages are often missed or misrepresented by the insurance adjuster that is sent to prepare the report.
Insurance is confusing - and it is meant to be. Understanding your policy is very important, but not always easily understood alone. There are several types or forms of homeowners insurance with different levels of coverage and all insurance policies have notable exceptions, limitations, and exclusions (see our Homeowner's Insurance FAQ). If you experienced a type of property damage and do not understand why your claim is being denied, you can always consult with an insurance claim attorney. Most attorneys offer free consultations or work on a contingency-basis with no upfront costs or fees. You can easily find out if your claim truly is denied or whether it can be disputed with the insurance company.
Common Struggles with Insurance Claims:
Delayed Claims
Many policyholders complain about the frustrating difficulties in getting their claim resolved. Although there can be legitimate reasons for a claim to be delayed, there are also unjust tactics that some companies use to postpone payment. Common delays in claims can include:
Delayed scheduling of an inspection
Requiring multiple inspections of your property
Additional documentation is repeatedly requested
Untimely responses to your questions, concerns, phone calls, and messages
Underpaid Claims
Especially from natural disasters or catastrophic loss, it is unfortunately commonplace for many claims to be underpaid. Insurance companies can save thousands by underestimating the value of each claim, or by offering a fraction of the value of that claim. Underpaid claims can happen for a number of reasons, including:
Overbooked insurance adjusters have little time to properly inspect each property
Many property damages are overlooked or omitted when preparing the initial report
Some damages require proof or receipts that you do not have or lost in the hurricane
Estimates fail to factor in necessary pricing for the construction (logistics, materials, cost of labor, environmental, etc.)
Claim values only offer a patch to the damages, versus fully restoring or replacing them
Denied Claims
Policies can be written in vague and complex language to make it difficult to understand what is covered or excluded and navigating the terms can be a daunting task. Oftentimes coverages are denied based on exclusion from the policy but are covered under certain circumstances. Claim denials can include:
Wrongful denial or unproper investigation of damages under the policy terms
The insurance company says you lack the proper evidence of damage
They attempt to find reasons for the denial of a claim such as a pre-existing condition
Paying you as little as possible to protect their profits
Why Should I Contact an Insurance Claim Lawyer?
Many home and business owners find they have little trouble filing an insurance claim for their damages. Other times - usually when the stakes are much higher – there is a greater chance for dispute. You should consider contacting an attorney for help when:
You have questions regarding your policy coverages
The insurance adjuster’s estimate is lower than expected
Damages are extensive and claims are more complex
Claims are delayed or denied
Even if you have already received a settlement, it is not too late. You might not be getting all you deserve and there is free legal advice out there to take advantage of. Reach out to our team at Galindo Law if you have any questions about your insurance claim, policy, or the amount in benefits you received from your insurance company. We are experts at defending your rights and challenging bad faith claims.
You might also like to read What is Insurance Company Bad Faith?
