In the wake of a hurricane, a flood or other natural disaster, you may find your property, your livelihood, even your way of life at risk. There is tremendous pressure to get your life back to “normal” as quickly as you can. But if you don’t maximize your insurance recovery now, you may not have another chance, even if storm-related issues arise in the future.
There are a variety of insurance issues that may require attention and legal assistance. The insurance company has a duty to act promptly and to fairly investigate and evaluate your claims. Your insurers should be considering your interests at least as strongly as they consider their own. Unfortunately, that doesn’t always happen.
Claim-related problems that often occur after a natural disaster may include:
Denial of Covered Claims
If the insurance company denies a claim that should be covered, it may be able to avoid paying the claim altogether. At the very least, a denial will delay payment of the claim, allowing the insurer to continue using the money for its own purposes. The insurer may be able to make a profit from keeping that money invested a while longer, even if it eventually has to pay the claim.
Ambiguous Policy Exclusions
An ambiguous provision in an insurance policy is one that could mean two different things, both equally reasonable. If an insurance dispute goes to court, ambiguous policy provisions are supposed to be construed against the insurer, so why do insurance companies seem to deliberately insert ambiguous provisions into their policies? Sometimes insurers use these terms when they negotiate with their customers—arguing that the insurer’s interpretation is the right one and sometimes succeeding in settling the claim for a reduced amount.
Attempts to Blame the Damage on Excluded Causes
Hurricane damage is often caused by a combination of wind and flooding. The insured may have separate insurance policies that cover wind and flood damage. A wind policy may exclude flood damage and vice versa. The insurer may try to blame the damage on a cause excluded by its own policy. While the insured is thinking of the damage simply as hurricane related, it may be very important to establish that wind or flooding played a specific role in causing the damage.
Underpayment Due to Computerized Data Sources
Insurance companies use formulas and standardized data to calculate their offers. But these data sources fail to consider specific circumstances that will affect the final price (for example, local prices, labor market, contractor quality, depreciation issues, etc.). You are entitled to a settlement that takes your specific circumstances into consideration and that will cover the real cost of restoring your property.
Undervalued Claims when Solely Obvious Damage Is Considered
In addition to the difficulties of negotiating complicated settlements under duress with parties that are experienced at maximizing their own savings, you must also confront the fact that a great deal of storm-related damage is not immediately apparent. Problems such as mortar damage or infrastructure weakness, while very real and costly to repair, are often not initially apparent and may only show outward signs of damage in years to come—well after your insurance negotiations are complete.
Unreasonable Delays in Investigating and Evaluating Damages
When the insurer delays investigation and evaluation of the damages, the company benefits financially from having use of the money for a longer period of time. Also, the consumer often becomes increasingly anxious as financial pressure grows. The consumer may succumb to the pressure and settle the claims at a discount. In effect, the insurance company may benefit twice from violating its duty to respond promptly.
Given all of the variables in this complex negotiation it is important to have a good partner—to have a legal team on your side that will work hard for your best interests and will not be intimidated by the insurance companies into make hasty judgments.
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