Why Do Insurance Companies Underpay Claims?

You pay for property insurance in case an emergency happens and you need your home repaired. But things don’t always work out that way.

Most people expect that when a storm or hurricane causes damage to their property, their insurance company will pay the claim and they won’t have to pay for the repairs out of pocket. After all, that’s why we have insurance in the first place.

But what happens when your home is damaged and an insurance company tries to underpay your claim, or denies it altogether? Unfortunately, this is not as uncommon as people would like to think.

That’s one of the reasons why it is so important to know your insurance policy and your rights. Otherwise, it’s possible for insurance companies to take advantage of you. It also helps to be aware of some of the reasons insurance companies underpay or deny claims so that it doesn’t happen to you.

Below are a few of the most common reasons insurance companies underpay claims:

      • People don’t know their rights. Many people assume that if they don’t take the first claim offer from their insurance company, they will be left high and dry. For this reason, insurance companies often lowball their first claim offer, and many people unknowingly accept. If you feel you are being offered less then you deserve, you don’t have to accept the offer. Be prepared to fight for your rights.
      • Bad faith tactics. At the end of the day, insurance companies are in the business of making money. Sadly, this often motivates them to use bad faith tactics such as using outdated price lists when calculating claims.
      • Adjusters get paid based on quantity. Because of the way adjusters are paid, they are motivated to perform inspections quickly. This means that sometimes they don’t conduct thorough home inspections.
      • Adjusters could be poorly trained. When you suspect that an insurance adjuster is inexperienced or has not been trained properly, you should consider hiring an attorney or a third-party adjuster.
      • Mistakes happen. Not all lowball estimates on property damage happen in bad faith. Sometimes adjusters and insurance companies make mistakes. However, when they do, it’s your responsibility to call them out.

If you feel your insurance company is trying to take advantage of you or underpay your claim, contact an experienced property damage attorney today.

Speak with a property insurance attorney in Florida today

At Johnson and Williams, we have many years of experience fighting for folks who have been taken advantage of by insurance companies. If your property was damaged in a storm or hurricane and you are not happy with the estimate provided by your insurance company, we can help you receive the compensation you deserve. Call our office at (407) 245-1268 to speak with a lawyer, or contact us online to schedule a free consultation.