Insurance companies look for many reasons to deny property damage claims or get by with smaller payouts. Often, the priorities of insurance companies are saving the company money rather than paying out a full claim that you might be entitled to. That’s certainly true after a natural disaster.
Claims may be denied for a number of reasons:
- Type of damage that is not covered
- Inadequate documentation
- Negligence by the policy holder
- Insufficient evidence
- Late claims
- Late payment of premium
- Improper damage mitigation
Here are initial steps you can take if your claim is denied:
- Read your policy
- Study the claim denial letter
- Examine your property damage
- Appeal the denial decision
Insurance adjusters can make mistakes. It is possible that your claim was assessed inaccurately.
You can dispute a denied claim by appealing the decision made by your insurance company. Keep a record of documentation and photo evidence. Get all statements in writing.
Even if your claim is not denied, the initial settlement offer might be low. Insurance companies use a complex valuation process to price your property damage. It is not unusual to have discrepancies with their methods.
If you disagree with the insurance company’s valuation, follow these steps until you get a resolution:
- Explain your grievances to your insurance company in writing
- Get their responses in writing
- Hire a certified adjuster or contractor to assess damage and provide estimates
- Send a written counter offer
- Request a mediator for arbitration
- Seek legal help from an experienced attorney
- Call your state’s insurance commissioner and file a complaint
Be aware that a dispute with your insurance company will take lots of time. This is especially true after a natural disaster, because insurance companies will have numerous claims related to storm damage, flooding, and wind damage. Disputing a claim can last for years.
During settlement negotiation, if you agree with a portion of their offer, ask if they can pay the undisputed portion of your claim (as long as you do not have to waive your rights to the disputed sum). For instance, you may want to access the living expenses portion, even though you are disputing their offer for your belongings claim. This way, the entire claim won’t be tied up in negotiation.