I need to file a claim…now what?
If a fire breaks out or a pipe bursts in your home, more often than not, anxiety sets in for you, the homeowner. If done properly, showing your home’s storm damage to a claims adjuster should be a feeling of relief rather than high anxiety. From the inception, the insurance company made a promise to you when you purchased the insurance policy. It was to help you recover financially following a covered loss.
Yet all too often, the claims handling process falls short on upholding its promise. Reason being, insurance companies are profit-making businesses who employ adjusters with the intent to limit their payout and overall financial exposure. In sum, claims adjusters are essentially business agents who are tasked with negotiating the lowest payment to settle your claim. In order to protect your interests, it is important to be familiar with the claims process and have a basic understanding on how adjusters should treat you, so that you can obtain a fair, equitable, and reasonable resolution of your claim.
First and foremost, it’s the job of the insurance company and the claims adjuster to “indemnify” you, which means they have the responsibility to put you and your home back to their original condition. In doing this, they owe you a duty of good faith and fair dealing in the handling of your claim in order to determine whether payment is warranted.
Second, when investigating a claim, the claims adjuster must initially determine whether the claim is covered under the policy. Claims adjusters are often tasked with reviewing the underwriting file for the purpose of identifying whether any policy exclusions apply to your claim. Similarly, claims adjusters investigate to determine if the reported damages are in fact the result of pre-existing conditions and/or construction/manufacturing defects. These tasks are performed for one reason alone, denying coverage on your claim.
Third, once it is determined your claim is covered under the policy, the next step for the claims adjuster is to determine whether the scope of repairs and the costs associated for making such repairs warrant any payment. This should be accomplished by the claims adjuster performing a reasonable investigation and inspection of your property. During the inspection, your adjuster should document the claim by taking appropriate photographs and notes to reflect the current condition of your property. If you have a roof claim, not only should the adjuster perform a reasonable inspection of your roof, but the adjuster should also inspect the interior rooms and the attic to confirm whether any damages exist that are not otherwise apparent to the average person. Remember, the claims adjuster is typically more qualified and experienced in identifying claim-related damages than you are. Plus, in exchange for you paying the insurance company a premium for coverage, the claims adjuster is obligated to investigate your claim in a proper and timely manner. Not only should a reasonable investigation be performed, the claims adjuster is also required by law to provide you with a reasonable explanation in writing for the denial or settlement of your claim. Failure to do these acts may be in violation of Texas insurance law, which was drafted with the sole intent of protecting your interest from any potential unscrupulous activity.
Ultimately, if the total costs to repair your property exceed your deductible along with any applicable proper depreciation, then the insurance company is required to issue payment on your claim. Once you receive any payment from the insurance company, it is vitally important to use such proceeds in making the appropriate repairs as insurance companies notoriously use this information to their advantage in their analysis of any potential future claims. While attempting to make such repairs, if it is discovered your claim was undervalued or any aspect of your claim was improperly excluded, it would be prudent to contact your claims adjuster immediately and provide all necessary written documentation needed to support and justify a supplemental claim.
In the long run, knowing and engaging in these basic claims handling principles will hopefully save you time and expense without the need of unnecessarily engaging in litigation in recovering what is rightfully owed to you under the policy.