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If you've filed a homeowners insurance claim and think you've been wrongfully denied by your insurer or offered an excessively low payout, you still have options. Overall, the strategy should be to present additional evidence for your case and escalate the dispute in steps, but only up to the point where the costs of doing so are outweighed by the potential benefit.
Step 1: Contact your insurance agent or company again
Before you contact your insurance agent or home insurance company to dispute a claim, you should review the claim you initially filed. Consider if there is any way you can improve the quality of evidence showing damage or a loss, which can have a significant impact on the settlement.
For example, you should have more photos ready to submit and bolster your case for the amount you claimed. Photos, videos, repair estimates and receipts for items are all materials you should organize before reconnecting with your agent or company, assuming you didn't include them in your initial claim.
After analyzing your initial claim paperwork, call and speak to either your agent or company's claims department about the estimate you received from the adjuster. Remember that an adjuster from the company calculated the estimate, not your agent or the person you’ll speak to.
Ask them if your claim can be reviewed again based on your new evidence, or if the adjuster can reexamine the property damaged or lost. Mistakes happen and it's possible an adjuster miscalculated the estimate. A company might review it again, but that doesn't mean their settlement offer will change. They might not even agree to have another adjuster evaluate your damage or loss. If that's the case, the next step is to obtain a third-party appraisal.
Step 2: Consider an independent appraisal
Hiring your own appraiser or public insurance adjuster allows you to get an independent estimate for the damage you're trying to repair. Depending on how far away they are from your home, a private appraiser or adjuster will cost roughly between $200 and $500. If the discrepancy in the claim settlement is roughly equal to the cost of the independent appraisal, it may be more cost-effective just to take the settlement.
A second professional opinion of the damages or loss will do one of two things. The new estimate will either confirm the accuracy of your insurance company's settlement offer or provide leverage in your argument for raising it. If you find yourself in the latter situation, contact your insurance agent or claims department again and tell them about the independent estimate. You might even want to ask to speak to a claims manager and ask that they evaluate your case.
Step 3: File a complaint and hire an attorney
Claim disputes rarely make it to this stage. If you are unable to reach an agreement on a claim with your home insurance company, and have exhausted all of the previous options, there are only two other things you can do: file a complaint with the state and seek legal remedy through an attorney.
Policyholders can report what they feel is mistreatment or bad business practices to their state insurance department. The department should investigate your claim and provide you advice on what step to take next. They typically evaluate whether your complaint is justified, and if so, will reach out to your insurance provider through its own channels to encourage a fairer resolution.
The state insurance department might suggest that you hire an attorney, but it will not help pay for that expense. This makes it important to weigh the costs and potential benefits of legal action. You will need to find an attorney, pay a consultation fee and whatever additional rate they charge. Should you choose to hire an attorney, make sure a fee structure is in place.
Note on disputing natural disaster claims
Most insurers handle natural disaster claims the same way as any other claim — as quickly and accurately as possible. However, disasters often lead to a huge wave of simultaneous claims, which can make it challenging for insurers to respond in timely fashion.
For this reason, state insurance departments usually set special dates for insurance companies to acknowledge a claim has been filed. Typically, companies have 15 days to acknowledge they have received a claim but that is usually extended.
A higher volume of claims might also force insurance adjusters to make rough estimates in each case. If this is the case, the policyholder should be notified and expect a second visit from an adjuster at a later date. Make the second appointment during the first one if you can.