Here’s a story that may sound a little familiar. A nice couple returns from a weekend getaway to discover a pipe under the sink has burst and their house is filled with water. This couple starts the claim process. There’s a lot of items that need to be fixed. The hardwood floor, the walls with moisture in it, the damaged furniture. As they get into the claim process, they feel like the insurance company isn’t giving them a fair and reasonable amount to put them back to where they were before the pipe burst. What now?
Disputes between customers and home insurers over claim payments occur for many reasons, from fine print buried in a policy to debate over the real cost to fix your house.
If you think maybe it’s not going the way it should, here’s a couple of ideas to help you come to an agreement.
1. Know Your Coverage
Sometimes claim payment disagreements are the result of not knowing what actually is and is not covered by your homeowner’s policy.
Before you put too much time and energy into something, review your homeowner’s insurance policy to see if you’re covered for the damage that you’re concerned about. Look at what your policy limits are listed at. Knowing what you’re entitled to under your policy will also bolster your argument if you’re in the right.
2. Review Your Claim
If you’re confused about why the claim amount is lower than expected, ask the adjuster or insurer for some clarification. They may cite an exclusion or other specific language in your policy. If that’s the case ask for them to point out the section in question.
Always document everything in writing. Adjusters are people too and may make mistakes. Keep a log of dates, whom you spoke to and what was said. If you get information by phone or in person, send a follow-up email confirming what you heard. Keeping a detailed list not only helps document everything that’s been said, but also helps you clarify what course of actions you have and have not taken.
Once you have clarification on the insurance company’s position, prepare documents that can help prove your case if you still feel like it’s not fair. For instance, if your insurance company thinks it will cost a certain amount to repair your house, but you think it’ll be more, get a written estimate from an independent contractor.
3. Appeal Politely
If you still feel like the settlement is unfair and need to file a dispute to a denial or claim offer, start by writing a letter to your claims adjuster. Sometimes communication is the key. Briefly describe your point of view, including any evidence you’ve organized that proves your point, and request that the adjuster review the claim.
Ask for a response within a certain period of time, say, 10 business days. To have a record of the exact day your letter is sent and received, choose the certified-mail option at your post office. Also, send it in email form so there are two methods of communication.
Even if you are boiling mad, stay calm and polite. Don’t threaten to hire an attorney. If you take an adversarial tone right off the bat, your insurer might decide to let its lawyers do the talking. Momma taught us best; you get more flies with honey.
4. Ask for a Re-inspection
If there’s a dispute over the amount of damage, ask your adjustor for an additional inspection. If you’ve received second opinions from independent contractors or other professionals, such as a smoke-contamination investigator or mold inspector, bring those people to meet with the adjuster to vocalize their expertise.
Get everyone together. Determining the full scope of damage isn’t an exact science and it may help your case if other experts can physically prove the point to the adjustor and help everyone come to a solution.
Appraisals are a pretty normal step when it comes to disagreements between policy holders and the insurance company on property damage. Both sides pick an appraiser to represent them.
The two appraisers review the damage to your home and belongings and try to agree to what is a fair settlement. A neutral party, called an umpire, breaks any deadlocks between the appraisers.
Curious if your policy has this clause? Here’s the kind of policy language to look for.
If you and we fail to agree on the amount of loss, either may demand an appraisal of the loss. Each party will choose a competent appraiser within 20 days after receiving a written request from the other. The two appraisers will choose an umpire. The appraisers will separately set the amount of loss. If the appraisers submit a written report of an agreement, the amount agreed upon will be the amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will set the amount of loss.
The biggest downside to appraisal is that it determines only what was damaged and how much that damage amounts to, not whether your insurer actually has to pay that much. Appraisal won’t resolve disagreements over your coverage, the language in your policy or other issues holding up your claim.
Mediation involves hiring a completely impartial party, or mediator, to work one on one with you and the insurance company to come to terms that both can live by.
You and your insurer split the cost for mediation, unless your policy states that your insurer must pay. The mediator can be court-appointed or a private professional whom both sides agree on. You can also go through a state-sponsored mediation program, which you typically can find through your state’s department of insurance website.
Mediation typically is fast, but it’s nonbinding, so you or your insurer can pretend the whole thing didn’t happen if either side doesn’t like the outcome.
Among the downsides: The insurance company’s rep likely will be trained for the process, while it will be brand new to you.
The Last Resort: Lawsuit
Suing an insurance company can be a long and expensive process. Before you start a lawsuit, try working with the insurance company instead of against it.
So often, we have policy holders who immediately go out and get a lawyer. Often times, this completely changes the process the claims adjustor has to follow. Often what happens is the claims adjustor can only communicate with the lawyer, unless the lawyer gives the claims adjustor permission to speak to others. This takes away communication from the policy holder and inhibits their agent any ability to help along the way.
Need a quote for your Oklahoma homeowner’s policy? Click get a quote or text or call our office to start the process.
Other claims processes: