My Property Insurance Claim Was Underpaid – What Can I Do?
Submitting a claim for damage to your property caused by a covered event should not be a stressful experience. If you are paying your monthly premiums, then you should be able to expect that your insurance company is going to fully honor their obligation. But what you may not know is that while your insurance company may approve your claim, they sometimes will only do so at a fraction of what you believe it is worth. When this happens, you are then faced with a difficult decision on how to proceed. Fortunately, if you find yourself dealing with an underpaid claim, there are options. Let’s take a closer look at underpaid claims and what you can do if you are dealing with one.
What Is An Underpaid Claim?
When you file an insurance claim, you expect that your insurance company will pay the exact amount required to repair or replace what has been lost. With a property insurance claim, this amount is usually calculated by assessing the damage and figuring out how much it will cost to resolve the issue. When your insurance company offers to pay you an amount that falls short of what it will cost to bring your property back to its pre-damaged condition, it is known as an underpaid claim.
Because insurance companies are businesses, they are constantly looking for ways to increase profits and limit the amount they pay out on claims. They often underpay claims because they know that many people would rather accept a lower amount than appeal the decision or take them to court. This practice forces policyholders to come out of pocket to make up the difference and saves the insurance company millions of dollars per year.
If an insurance company is found to intentionally underpay a claim, this is known as bad faith and is not allowed under the law. If proven, an insurance company operating in bad faith can be forced to pay you what you are owed and may even face punitive damages.
What Are My Options?
If you are offered an amount that you know is less than what the claim is worth, then you may want to consider rejecting your insurance company’s offer. You may not be able to do that if the damage to your property requires immediate attention. If you can afford to wait, then you will want to ask your insurance company to show you exactly how they came to the amount that they are offering. Your insurance policy will also have what is known as policy limits. These are the maximum amounts that you can receive from your insurance company to repair or replace a loss caused by a covered event.
You may also be able to hire your own claims adjuster, who will then assess the damage and submit a report on the extent of the damage and the projected costs of repair. It is important to note that claims adjusters will charge for their service, and their fee may be deducted from what the insurance company ultimately ends up paying out on your claim.
You may also sue your insurance company in court to force them to pay you what you are owed. Again, this method can be lengthy and may not be an option if you are short on funds and time. Still, if your high-value claim is severely underpaid, then consulting with a property claims attorney on taking your insurance company to court may be your best option.
As with claims adjusters, claims attorneys will also charge a fee for their services. Many claims attorneys will take your case on a contingency fee basis. What this means is that they will not collect a fee unless you are successful in getting your claim paid by your insurance company. If that happens, then your lawyer will likely take a percentage of the total claim amount.
FL Property Insurance Claims Attorneys
The Louis Law Group represents homeowners dealing with property insurance claims. Our experienced property insurance lawyers are here for you. Get in touch with The Louis Law Group by calling (954) 676-4179 or contacting us online.