What can I do if my insurance claim is underpaid?
I get calls all the time from insureds and contractors asking for our help because the insurance carrier has severely underpaid their claim. I had one yesterday that was originally denied and the insurance carrier said they had no damage on the property. They even sent their engineer out who said there was no damage to the property. Yesterday, they sent us a check for $208,000. You have to ask, "Why?" How could the insurance carrier be that far off? Why would their engineer have lied? Why would their adjuster have lied?
Sadly, it is all about money. They have it. You want it, but they don't want to let it go. It is your money, though. You have paid your premiums for years. They made a promise that you would be covered and then broke that promise when you needed them most.
Now, you are left with the question and the problem. Do you take it on the chin and pay for your loss again? Do you hold the insurance company accountable? If you do, then how?
You could file a complaint with the Department of Insurance. They are supposed to be consumer advocates right? Well not according to them. In fact, they will tell you that they have no power or ability to force the insurance company to change their mind or follow the law. They will tell you to call the Consumer Protection Agency, and the Consumer Protection Agency will tell you to call the Department of Insurance. So you play around in this world of bureaucracy and give up. In all the complaints that we have ever filed or seen filed, they have never once helped the insured. Sad, but true. We will often file complaints knowing we will not get a real result out of it but it does burry the carrier in paperwork though. It also helps document your claim and shows that you have done all in your power to resolve your claim with the carrier.
The insurance policy usually allows for a few different options when it comes to dispute resolution. There is usually an insurance appraisal clause, litigation, or mediation. All of these provisions can be helpful, but all of them are useless if the claim is has not properly prepared before hand.
Similar to a real estate appraisal, that determines the value of the property, an insurance appraisal determines the amount of the loss in regard to an insurance claim. In an insurance appraisal, there is what is called an appraisal panel. The appraisal panel consists of 3 members. The insured's appraiser, the insurance company's appraiser, and the umpire. The appraisal panel will determine the amount of the loss and issue the award. In theory, this settles the claim and the award is final. We have done a lot of appraisals and had great success for our clients. The drawback of the appraisal is that in the State of Utah an appraiser does not have to have a license or even any credentials. Often the umpire that is proposed is extremely biased toward the insurance company. Also, if the carrier does not like the outcome, they might still refuse to pay the claim.
We are not attorneys- I will try to explain mediation, though. Mediation is similar to appraisal except it is done by attorneys. They have a mediation board consisting of three members that will try to negotiate and determine a settlement amount. Again, if the carrier does not like the award there is a risk they will not pay it. Additionally, if the preparation is not properly done it could end in a terrible terrible outcome for the policyholder.
Bad Faith Litigation-
When an insurance carrier denies or grossly underpays your claim there is a potential bad faith claim against them. This is our preferred method of claim resolution. Every claim that we have ever handled the carrier broke the law and breached their policy contract in some way, usually in 10-12 different ways. The problem is that proving bad faith can be very difficult for attorneys when they come into a claim without it being properly documented and prepared. Then there is no possible action on bad faith, you will have spent a lot of good money chasing bad.
So what now?
When we take on a claim we act as the independent voice for the insured. We ensure that all of their after loss duties are completed. We do a thorough and complete inspection of the loss. We negotiate with the insurance company on their behalf. This by itself greatly improves the condition of your claim. With a proven track record, the carriers know we a force to be reckoned with. We properly document all aspects of the loss, not just the damages. In order to have a case against them, all bad faith actions and laws that were broken need to be documented along the way. In most cases, we have a tendency to not lean toward appraisal. When we do our job properly, and the law is broken, we feel that the carrier should be held accountable for their actions. With your claim properly prepared, and with concrete evidence in hand, even an amateur attorney can collect the rest of the money that is owed. We have several firms that we work with that are ranked among the Top 10 Bad Faith Attorneys in the country. They work our claims on contingency. They are also willing to take all of our claims we refer them because when they are prepared properly their probability of success is sure.
It is time to take back control and make sure your greatest investment, and the lives of your families, are cared for and the promises made to you are kept.
Give us a call.