What Challenges Can You Expect in a Home Insurance Claim?
The process of a home insurance claim isn’t always easy. The more sizable the claim, the more likely you are to run into a disagreement with the insurance company or the claims adjuster.
At the same time, the bigger the claim, the more you depend on things going well to protect you and your finances. You need the insurance settlement to rebuild your home and get things back on track.
If you’re going through the claims process now, these are some of the most common problems with house insurance claims that you should anticipate.
1) Repairs vs. Replacements to Your Home
One of the problems that might come up in the wake of a fire is whether the structure of your home should be repaired or completely rebuilt.
The insurance company accepts bids from their preferred contractors and will usually go with the lowest quote. There’s a motivation to do things as economically as possible, but does that mean your home is getting the repairs it truly needs?
If you have a disagreement about a structural repair, you may want to bring in your own structural engineer to back up your claim.
2) Valuing Your Personal Belongings
In a total loss, there are a lot of contents to list and value. The claims adjuster likely isn’t doing deep dives into the value of your belongings, and their pricing may not be accurate.
What can you do to make sure your belongings are accurately valued? Buy yourself more time to review your Schedule of Loss (your list of belongings lost or damaged in the fire) by signing an interim Proof of Loss. The insurance company may want to pressure you into signing a final Proof of Loss before they issue any advance funds so that you can get started, but you don’t have to give into this demand. By signing an interim Proof of Loss, you should be able to get access to undisputed funds while you negotiate with the insurer about the remainder.
3) Finding Out You’re Underinsured
Underinsurance is much more common than you might think, and it can be financially devastating if you need to make a claim. Underinsurance happens when your policy doesn’t match up with the reality of your home, and the true cost to rebuild or repair your home exceeds the policy you’ve taken out.
Unfortunately, if your policy covers less than 80% of the cost to rebuild or replace your home, the policy may be void entirely, leaving you with no insurance whatsoever. If your insurer refuses your claim due to underinsurance, you may want to let experienced attorneys negotiate with the insurance companies for you. Similarly, if you find out that your insurance does not cover your home because of bad faith practice or misrepresentation when the cover was taken out, you may also have a valid legal claim against your insurer. As such, when you suspect bad faith, negligence, or fraud may have played a part in the refusal of your insurance claim, it’s worth your while to contact a law firm that can offer you help for denied insurance claims and will act on your behalf to win you the payout you deserve.
Even if you’re only marginally underinsured, you may find that you reach your coverage limits and have to pay out of pocket to finish rebuilding your home. You could wind up having to rebuild something smaller, or if you still owe your mortgage lender, they could take the insurance settlement and close out your mortgage.
Your home is arguably the biggest and most important purchase of your life. If you have to make a claim, be prepared for complications and common problems that may arise.
