Don’t get scammed by your insurance company when you file a property damage claim.
Wind damage, water leaks that ruined your floors, fire damage that destroyed your home – it’s all traumatic to go through. But at least you know you can count on your insurance to pay out and help you recover, right?
Wrong.
Insurance companies have lawyers and entire departments dedicated to denying your claim. And it works. A shocking 37% of homeowners insurance claims were denied in the U.S. in 2023.
That’s more than 1 in 3 claims getting denied for some of the most upsetting and damaging events homeowners can experience.
In this post, we’re going to arm you with information to protect yourself.
We’ll cover:
- Why Insurance Companies Deny Property Damage Claims
- What Rights You Have As A Policyholder
- When You Need A Property Damage Attorney
- How To Protect Your Claim From Day One
Why Insurance Companies Deny Property Damage Claims
Insurance companies are for-profit businesses. They make their money by taking your premiums and then paying out as little as possible in claims.
Some of the most common reasons a claim gets denied:
- Policy Exclusions
- Missed Deadlines
- Insufficient Documentation
- Disputes Over Cause of Damage
But what might shock you is just how often some of the nation’s largest insurance companies are rejecting claims.
State Farm rejected about 51% of homeowner’s claims in California last year. Chubb 57%. Western backed out of 61% of homeowners claims.
These aren’t tiny fractions. That’s real damage to real homes and real people who paid insurance premiums and thought they were covered.
What Rights You Have As A Policyholder
What many policyholders don’t know…
You have rights when it comes to filing a property damage claim. When you purchase an insurance policy, you enter into a contract with the insurance company.
In that contract, both sides have duties they must perform. They are bound by contract law. And they have to follow certain regulations.
The insurance company’s duties are to:
- Promptly and fairly investigate your claim
- Provide clear communication about decisions
- Act in good faith and with fair dealing
- Pay valid claims in a timely manner
Failure to do any of those can rise to the level of bad faith insurance practices.
When this happens, a property damage attorney can help you enforce your rights and make sure you get the compensation you are owed.
The Property Damage Claim Process
So, how do these claims work?
First, you report the property damage to your insurance company. The company then appoints an adjuster to examine the damage. The adjuster inspects the property and makes an estimate for how much your claim is worth.
That’s it in a nutshell.
Or is it?
Insurance adjusters work for the insurance company. Their job is to save the company money. So, they have an incentive to downplay your damage or find reasons to deny your claim entirely.
Property damage claims average $13,954 per claim. Insurance companies know that. And they know that makes them targets for adjusters who can legally “cut corners” to keep those costs down.
When You Need A Property Damage Attorney
Many people try to work on their own at first when filing a claim. And that can be a good strategy in some cases.
But there are times when you know you should get professional legal help, such as:
- If your claim was denied. A denial is the most obvious red flag that you need to talk to an attorney.
- If the settlement offer is too low. Insurance companies make lowball offers hoping you will accept less than you deserve. An experienced property damage attorney will know the true value of your claim.
- If the insurance company is taking too long. Delays are another common tactic. You have a right to a timely process. If they are dragging their feet, you may need an attorney.
- If the damage is severe or complex. For large-scale property damage like total loss vehicles or structural home damage, you want to have a professional in your corner to make sure you get every dollar.
Common Property Damage Claim Scenarios
Different types of property damage can bring different issues.
Wind and Hail Damage
Wind and hail damage result in the most property damage claims filed, about 34-41% of all property damage claims.
The problem?
Insurance companies often dispute whether the damage was pre-existing or from a recent storm.
Water Damage
Water damage claims can be tricky because coverage often depends on the source of water.
Flooding from rising water or sewer back up is often excluded from standard homeowners policies. Burst pipes may be covered. Each type of water damage needs to be addressed in your policy.
That’s another common way insurance companies deny claims.
Fire and Lightning
Fire damage claims are the most expensive, averaging around $77,340 per claim.
So, don’t be surprised if your insurance company fights these hard. And remember that lightning damage is also fire damage.
How To Protect Your Claim From Day One
You can take steps to make sure your claim is approved from the start.
- Document everything. Photograph and video record all of the damage, from multiple angles. The more proof you have, the harder it is for them to deny.
- Report damage immediately. Don’t wait to file a claim. Late reporting is one of the most common reasons for denials. Report the damage as soon as possible.
- Keep good records. Document all emails, letters and notes from phone calls with your insurance company. You may need this for an appeal.
- Don’t take the first offer. Insurance companies often lowball policyholders in the first offer. Don’t accept this without negotiating.
- Get a professional inspection. It can help to get your own inspection or contractor to provide an estimate. This can give you more leverage to counter low offers.
The Appeals Process
Your claim can get denied. We know that.
But that doesn’t mean you are out of options.
Appeals are the most common recourse. Most policies have an appeals process built in. You can use this to present more documentation and other evidence in support of your claim.
This is one of the most critical times to have an attorney on your side. A property damage attorney knows what evidence insurers want to see. They know the legal arguments that work.
Insurance company lawyers aren’t scary to them.
The Cost of Filing A Claim On Your Own
Something to consider is this:
The small amount of money it might cost you to hire a property damage attorney pales in comparison to what you could lose by going it alone.
Insurance companies have large legal departments and armies of insurance defense lawyers whose sole purpose is to save the company money.
Shouldn’t you have someone on your side fighting just as hard for you?
Lawyers work on contingency when it comes to this type of case. It means you only pay if you win.
You risk nothing by hiring professional legal help.
Red Flags That Something Is Wrong
Here are some red flags to watch out for that your insurance company might not be dealing fairly:
- Your adjuster is hard to reach, returns calls slowly or avoids you.
- Your claim has been pending for weeks or months without an explanation.
- The settlement offer is much lower than your repair estimates.
- The insurance company is asking for excessive documentation or repeating requests for the same information.
Insurers use these tactics hoping you will get frustrated and give up or accept less than you deserve.
Don’t let it happen to you.
Conclusion
Filing a property damage claim shouldn’t be a nightmare. But it does require knowing your rights and standing your ground when insurance companies lowball or deny your valid claim.
Some key takeaways are:
- More than 1 in 3 property damage claims get denied
- Policyholders have rights that insurance companies must honor
- Your documentation is your best defense
- Professional legal help costs nothing upfront and can dramatically increase your recovery
Property damage is stressful enough. Don’t let your insurance company make it worse by refusing to pay their share.
If your claim was denied or you received an unfair settlement, contact an experienced attorney today. They can review your case and advise you on the next steps.
Your property. Your rights. Your recovery.
Don’t settle for less than you deserve.
