How Insurance Companies Underpay Insurance Claims

By Ricky K. Patel Esq. 

Most homeowners are meticulous in making sure that their property insurance premiums are paid on time. So, after your home sustains damage due to a covered loss, you may assume that your property insurer will do the right thing and properly compensate you for the damages you’ve claimed. Sadly, many property insurance companies routinely delay, deny, or underpay property insurance claims. After you’ve reported your property insurance claim, the insurance company typically sends out an adjuster who works for them to evaluate and estimate the damage to your home. After this initial step, you may spend days, weeks, or even months for a follow up from your insurance company. Finally, after a long period of waiting, you may get a letter from your property insurance company with a check for damages that is low in comparison to the types of repairs your home may need to be completely restored to its pre-loss condition. It’s important to understand that if you find yourself in this situation, there is still hope.

Many times, home insurance companies will outright deny a large percentage of claims that are made. There are several reasons that an insurance company may decide to deny all or a portion of your claim. Some examples include pre-existing damage, damage was caused by a loss that is not covered by your policy, wear and tear, faulty maintenance of property, and many other. In the event that the insurance company accepts a portion of your damages as covered under the subject policy, they often underpay or undervalue your claim. The insurer may achieve this by setting limits on the number of items that can be repaired or setting limits on the amount that they are willing to pay to repair your home. You may be wondering how insurance companies get away with these tactics. The answer is that in most states, there are statutes that enable property insurance companies to pay the actual cash value of your damages instead of the replacement cost value of your damages—which is usually a more accurate representation of the costs of fully restoring your home to its pre-loss condition. In the event that your specific policy calls for your damages to be paid at replacement cost value, many insurers will severely undervalue claims in an effort to pay only the actual cash value of a claim that is supposed to be paid on a replacement costs basis.

Do You Need Help with Your Undervalued Property Insurance Claim?

If you have additional questions about your insurance claim or are currently caught in an insurance dispute over damage to your property, contact us today at (305) 300-3000 for a free consultation. The attorneys at Farrell, Patel, Jomarron & Lopez recognize your rights as an insured homeowner, understand how the insurance claims process works, and know how to submit a strong homeowners insurance claim that will prevent your property insurance claim from being denied, delayed, or underpaid. Your home insurer will hire a team of attorneys who will work hard to make sure you don’t receive the compensation you are entitled to. You should have a team of lawyers working for you too! FPJL will aggressively represent you to ensure you get the money you are owed without any further delay by the insurance company. Our team of attorneys have decades of experience providing affordable representation to homeowners facing a wide range of denied, delayed or underpaid insurance claim issues.

Contact our law firm today at (305) 300-3000 for a free consultation!