Lawyers Helping People Fight Against Underpaid Home Insurance Claims
It’s not every day that you need to file a homeowners insurance claim, but when you do, you expect your insurance company to step up and pay the claim like they should. After all, you’ve faithfully paid your premiums, probably for many years, and never made a claim before. You rightly believe that the insurer should pay in full. Instead, you are shocked when your insurance agent tells you only a small part of your claim is covered. This is called underpayment, and you should inquire with an attorney about whether you have options to convince your insurer to pay the total value of your claim.
Why Do Homeowners Insurance Companies Underpay Claims?
Attempts to underpay claims are extremely common. Property insurance companies underpay claims as a way to keep their own profits high. Underpayments are subtle way for insurers to appease policyholders while minimizing payouts.
There are several reasons why an insurance company might underpay a claim, such as:
- A narrow reading of your policy ꟷ Insurers are notorious for interpreting policy language very narrowly in order to exclude certain damage/repairs. The best way to recognize an underpayment is to familiarize yourself with the language in your policy.
- Paying actual cash value ꟷ Home insurers often attempt to pay actual cash value (ACV) rather than full repair/replacement cost in order to save money.
- Underestimate labor costs ꟷ Using this common tactic, insurance adjusters correctly estimate the cost of materials to repair your home, but then purposely underestimate the labor costs. This creates an estimate that is too low from the beginning, but they hope you don’t know better and won’t challenge the estimate.
- Underpaying is an alternative to denying payment ꟷ Insurers know people are more likely to fight a total denial of a claim, so they attempt to pay some small amount in the hopes that the policyholder take the money and walk away.
What You Should Do If You Receive a Home Insurance Underpayment
First, read your policy, then see if you can gather more evidence to support your claim. Then, call your agent or claims adjuster to object to the low estimate you were given. Ask for another estimate.
If nothing improves after talking to your agent, you can hire an independent appraiser to assess the damage. You can use this new estimate to again approach the insurer and make your case.
Finally, if the insurer just refuses to act appropriately, consult a home insurance claims lawyer.
Contact Our Home Insurance Claim Attorneys for Help
Whether your claim was underpaid or denied outright, the Law Offices of Thomas M. Friedman, P.C. is here to help. Our lawyers help ordinary homeowners stand up against even the largest insurance companies when those companies treat policyholders unfairly. You do not have to stand by and simply accept an underpayment. Contact us first at 877-619-8966. We take cases in California, Illinois, Ohio and Pennsylvania.