Property owners facing an insurance company denial or unfair adjustment have several options.  There is no need to immediately “lawyer-up” when an insurer is acting unfairly.  The following are options to consider:

Demand A Written Letter.  Insurance companies are legally required to answer a request for information from an insured.  Insured property owners ought to write to an insurance company and demand the insurer put its position in writing.  Verbal statements on the phone are not as helpful.

A request in writing serves several purposes. First, it requires the insurance company’s adjuster to be serious and not make off-the-cuff judgments.  Second, insurers often link their position to exclusions or requirements in the policy.  The insurer’s response in writing will often quote to the exclusion in the policy it relies upon.  An insured can see for himself or herself the validity of the insurer’s position.  The property can ask, “does that exclusion really apply?”

A written demand to an insurer ought to be answered within 10 days. Failure to do allows the insured property owner to claim state law was not followed. That is very helpful.  Finally, a written answer from an insurer may be handled by someone higher in the company structure than the adjuster giving off-the-cuff responses.

Hire a Public Adjuster.  Public adjusters are the insured property owner’s adjuster.  They are well-versed in insurance company protocols and software used by the insurance industry. They also know policy exclusions are requirements. For complex claims with several coverages being claimed, such as alternative living expenses and contents, public adjusters can smooth the process and be a good advocate for the property owner.

Demand an Appraisal.  The amount of loss should be decided in appraisal. Appraisal in this context is an out-of-court dispute resolution process that should be used when the insurance company’s adjustment is too low.  When the insurer acknowledges some damage from a loss event (fire, storm, etc.) state law in the jurisdictions where I practice requires such disputes be appraised. A full description of the appraisal process can be found here.

Give The Insurer the Kitchen Sink.  Some insurance companies argue the property owner has not properly complied with its demands for information, such as documentation of the property, financial records, the loss, etc.  One option is to give the insurer the kitchen sink.  If they want volumes of records, why not give it to them?  In giving them the kitchen sink the property owner overcomes any viable claim of a lack of cooperation per the policy’s cooperation clause.

Pursue Coverage Litigation.  Whether a policy exclusion truly applies is for a court of law. Insurance companies are not the last word on how an exclusion in the policy operates. Property owners often think of insurance company adjusters as authority figures, but remember, insurance companies do not make money when they pay claims.  Insurance companies are frequently just plain wrong.  They summarize how they think an exclusion operates, but sometimes insurers are wrong.  In that instance, property owners can go to court for a coverage determination.

Bad Faith Claim.  In the states where I practice the law includes bad faith claims. The essence of a bad faith claim is when an insurance company has unreasonably denied a policy benefit owed to an insured. That’s an easy statement to write but the standard of proof requires thought.  If an insurance company can credibly argue observed hail damage is from a long time ago – longer than the policy coverage or statute of limitations – a bad faith claim will not work. Bad faith only occurs when the insurance company has taken a position that has no merit, either factually or legally, or has conducted the claims process in an unreasonable fashion.

Do not hesitate to email me should you need help exercising any option set forth above at