It can happen to even the most prepared policyholder.
You suffered property damage from wind, hail, fire or a catastrophic natural disaster. As a policyholder, you file the claim and expect to receive the money needed for repairs. Even home and business owners who faithfully pay their premiums can find themselves in the unexpected situation of a denied property insurance claim.
It is no secret that insurance companies do not like to pay out claims—especially when the damage is extensive and costly. They will use any excuse possible to not pay a claim or to minimize the amount paid. Insurance companies can make policyholders feel as if they have no choice but to accept their decision. This is simply untrue.
While the insurance process for damaged property can be complex and time-consuming, policyholders should not forfeit their property rights and accept less than they are due.
Under the Texas Insurance Code, policyholders have certain rights. Insurance companies have denied many rightful insurance claims. When this denial happens, policyholders should seek professional help.
An experience attorney can help you evaluate your claim, make sure that your settlement is fair and, if necessary, take legal action so you can receive what you are rightfully owed. If your claim has been denied or underpaid, or you have been waiting an unreasonable amount of time to receive payment, it is important to be proactive and take action.
If your insurance claim has been denied, do not despair. Follow these steps and contact the Fitts Law firm for a free consultation and review of your claim.
Find out why your property insurance claim was denied
Responsible home and businessowners who diligently pay their insurance premiums are often shocked to learn that the insurance company has denied their claim. After paying premiums for years, policyholders ask simply that the insurance company provide coverage for the loss. However, insurance companies do not consider customer loyalty or timely premium payments when denying claims.
Insurance companies are for-profit business that can be an extremely profitable. They are in the business of making money. It is always in the best interest of the insurance company to pay its policyholders as little as possible. This does not mean that all insurance companies are out to take advantage of policyholders, but it does mean that discrepancies in costs often occur between the policyholder and the insurer.
Additionally, every property insurance policy is different. While some policies may exclude certain types of damage, more robust coverage typically contains less exclusions. Some policies pay the replacement cost value of your damages, while some only pay the depreciated value of your damages. If your property damage claim is denied, find out if the type of damage was excluded from your insurance coverage policy and what type of policy you have.
Another common reason for denied claims is insufficient evidence of the damage. It is crucial to keep a thorough record of any damage, repair estimates and proof of purchases.
Other reasons for denial may include: construction defects (e.g. if the home builder failed to properly insulate your home’s walls); pre-existing damage; false statements by policyholders; and failing to file a claim in a timely manner.
Speak with your insurance company
If your insurance company has denied your claim, one of the easiest steps you can take is to contact your claims adjuster and find out why. By listening to the insurance company, you can figure out their line of reasoning for your denied claim. It is always possible that the claim was wrongfully denied, but you need to communicate with your insurance to understand what your policy covers and the basis for the denial.
Before speaking with your insurance company, you should always remember to document all communications in writing.
If your insurance adjuster or agent, or another representative from the insurance company, tells you something over the phone, ask to receive that statement in writing as well. Documentation is crucial for the insurance process—especially if your claim requires further legal action.
When reaching out to the insurance company, remember to be polite. Like any business, insurance companies can make mistakes. Be respectful. Ask for a reevaluation or more detailed explanation of the claim denial.
If insufficient evidence was the reason they denied the claim, you can provide additional documentation. You should cooperate in the insurance company’s investigation of your claim, it is required by most policies.
In some cases, a professional attorney may be the best person to help you communicate with your insurance company. Oftentimes, these professionals know the right questions to ask and can advocate for the policyholder more effectively.
What about the appraisal process?
When the policyholder and insurer cannot decide on the dollar amount of the property damage, the appraisal process allows each side to have an independent appraiser. The appraisers from each side meet, assess the damages and try to agree on the claim amount. If they are unable to agree, they select an umpire who makes a decision and determines the amount of the damages.
The appraisal process is an option under the insurance policy, however the insurance policy is written by the insurance company, so it is important to note that the process may not always solve the claim value dispute in your favor. This process is unpredictable and only an option when the insurance company and policyholder disagree about the specific value of the property damage. If your insurance company is denying your claim outright, the disagreement is about your insurance coverage. Therefore, the appraisal process is not a viable option.
For example, if your home’s roof was damaged in a hail storm, and you needed $10,000 to fix your roof while the insurance company believes you only need $5,000, you could enter the appraisal process to try and receive a higher claim amount. If the insurance company denied your property insurance claim because of an improper roof installation, the appraisal process would not be an option.
The appraisal process is just one option open to policyholders in certain cases.
Contact an attorney and notify the insurance company of your disagreement
Just because your denied claim is not eligible for the appraisal process, does not mean that you are out of options as a policyholder.
You have the option to file a notice of disagreement with your insurance company, so they can reassess your claim. If you choose to go this route, make sure you contact an attorney who can assist in the investigation of your claim and file the notice, including all the documentation and any additional evidence regarding your claim.
You also have the right to hire an independent engineer or inspector. When insurance companies keep insurance inspectors and engineers on a retainer, these people are not working on behalf of the policyholder. They may cut corners during the inspection or not investigate the damages as needed to fully assess the damage. Consequently, an engineer who conducts an independent assessment without payment from the insurance company may have a different opinion on the extent of property damages.
Regardless of which steps you choose to take, an experienced attorney can help explain your best options and decide if legal recourse is worth considering.
In some, though not all, cases, the legal system provides the best opportunity for a policyholder to receive their full claim amount.
Especially in cases involving an outright denied insurance claim, filing a suit and beginning the legal process can be the only recourse.
Contact the experienced attorneys at Fitts Law Firm today. Our team has handled hundreds of denied property insurance claims over the years. We are well-versed in the Texas Insurance Code and have helped policyholders with damaged homes and businesses receive what they are rightfully owed by their insurance company.