Homeowners count on their insurance companies to cover property damage and issues that affect their property. Waiting to get reimbursed or get approval for repairs can be as nerve-wracking as suffering the initial damage to property. It can be even more upsetting when those property damage claims are underpaid—that is, the insurance company pays out less than you believe the repairs or replacements cost. This is not uncommon as some insurance companies try and pay out as little as possible. Fortunately, there are things that you can do in the event that you do not receive the contractual damages you believe you are owed. Read on to learn what to do if this happens to you.

Common Reasons for Underpayment

 While insureds cannot fully avoid underpaid claims from insurers, one of the things that they can do is avoid making errors that lead to underpayment. Here are some common reasons that insurance claims go underpaid.

1.  Failure to Mitigate Damages

 This basic principle generally means you have a responsibility to prevent the damage from getting worse if it is in your power to do so. For instance, suppose a storm rips off the roof of your home. If you continue to live in the room without a roof, rain and other debris will come into the home. This will cause further damage to the furnishings, walls, and floors. While that damage would not have happened if the roof was still on the property, you may have been able to mitigate damages by having a covering installed or taking other efforts to mitigate your damages.

2.  Underestimating Value

 Another reason for underpayment could be an underestimation of the value. An adjuster will come out and review the damage. If they rush through the process, they may not see all the damage or adequately reflect the extent of the damage. Try to stay involved in your claim to prevent the rendering of a lower estimate than what the damage justifies. 

3.  Exclusions 

 An exclusion is something that is not covered in a policy. For instance, an insurance policy may cover your main property but not an outbuilding on the property. In that event, if there is damage to the outbuilding, you may not be reimbursed. To avoid this, be sure to review the policy ahead of time. You may not select a different insurer to get the outbuildings covered or pay extra to cover any property damage to them. 

4.  Failure to Disclose or Misrepresentation of Information

 Whether applying for insurance or filing a claim, it is essential to be honest about the damage. Be sure to report accurate information on insurance claims forms. Do not undervalue your insured property or underreport the damage your property has suffered. 

5.  Missing Forms or Documents

 All claims need to be accompanied by the appropriate forms and documentation. If you have gone through the claims process, you are aware that it can be extensive and require a lot of paperwork. An honest mistake of not filing one of the pages can result in delays or underpayment. Be sure to fill out forms in an orderly fashion and keep records organized. Additionally, make sure to keep copies of anything that you submit to the insurance company.

6.  Want to Replace Instead of Repair   

Sometimes, there will be a question of whether the damage needs to be repaired or replaced. Generally, this can turn on expert opinions, the policy, and Florida law.

7.  Third-Party Liability

 Sometimes, an insurer will deny a claim by arguing that a third party is responsible for the damage. For instance, the siding on a house might become damaged due to harsh weather. The insurer may argue that the siding would not have been damaged had it been properly installed and will claim that the installer should be liable for the damage that was sustained. Situations like these can turn on expert opinions, the policy, and Florida law.

What to Do In Case of Underpayment

Fortunately, property owners are not without options in the event of underpayment. Here are three strategies you can take.

Contesting the Underpayment

 You do not need to accept the amount given by the insurance company if there is a basis to challenge their decision. You can ask your insurance company to explain how they arrived at their number. Many insureds avoid this because they need their money for the repairs and would rather take less money than no money at all. Others who do contest may still be confused about how the insurer arrived at the number.

Hire Your Own Claims Adjuster

 Another option is to hire your own claims adjuster or public adjuster. This person will assess the damage and issue a report that details both the extent of the damage as well as the projected costs of the repair. Their fee may be deducted from what your insurance company pays for the claim.

Filing an Underpaid Insurance Lawsuit

If you have questions about a denied or underpaid claim, contact our office today at 321-283-5888 for a consultation with one of our homeowners’ insurance attorneys. We present the material contained on our website and pages, including this Blog, for general informational purposes only. It does not constitute the rendering of legal advice and does not create any attorney-client relationship. If you need legal or other professional advice, you should consult with legal counsel about your particular facts and circumstances. Contact us to see how we may be able to fight for you!