Insurance Claim Denials

Homeowners purchase an insurance policy for the confidence that they will be compensated in an emergency if their home or property is severely damaged. Many homeowners are shocked when they discover that insurance companies routinely deny claims and cancel policies in order to avoid paying the homeowner for his or her damages. There are few situations worse than having to face a situation where a home has been destroyed and the insurance company is refusing to stand by the homeowner.

An insurance company will usually present a homeowner with an excuse for denying the claim. One of the most common reasons for a denial is that the insurance company is claiming that the damage to the home or property is not covered by the policy. Another common excuse for denial is that the homeowner did not do exactly what he or she was supposed to do following the damage.

It is important for homeowners to know that just because an insurance company denies a claim it does not mean that they are right. An experienced attorney can investigate the situation and file the appropriate legal action to challenge the denial in Court. Often, the attorney can show that the claim should not have been denied according to the policy and the insurance company must pay for the damage.

Bad Faith
According to a homeowner’s agreement and contract with the insurance company, the insurance company is supposed to protect and compensate the homeowner in the unfortunate event that their home or property is damaged. Often times, a good insurance company will follow through and make sure that the homeowner is taken care of immediately following an emergency because that is what they have agreed to do. Unfortunately, sometimes an insurance company will purposely not do what they have agreed to do. That situation can sometimes amount to bad faith. When an insurance company acts in bad faith, a homeowner can file a lawsuit and recover compensation beyond the normal compensation needed to just fix the damage to their property.

There are various ways in which an insurance company may act in bad faith. Some common situations include: completely unreasonable underpayment of claims, long drawn out processes before payment, cancellation of policies and sometimes an outright refusal to honor the insurance policy. An experienced attorney can determine if a particular situation rises to the level of bad faith and take the necessary actions to get a judgment against the insurance company.

Underpayment of Claims
Homeowners purchase an insurance policy in order to be compensated quickly in the event of an emergency loss to their home or property. Sometimes, the insurance company will use this to their advantage because they know that the homeowner may be in a bad position. Often times, a family cannot wait to get money to fix their home and they will have no choice but to take whatever the insurance company is offering at the time. Unfortunately, an insurance company may purposefully take advantage of the situation by paying much less than the claim is worth. A claim that is purposefully underpaid can be a form of bad faith and an experienced attorney can sometimes get you compensation for the insurance company’s bad actions.

If a homeowner believes that the insurance company is knowingly attempting to pay them less than their claim is worth, it is important to immediately see an attorney so that he or she may investigate the case and determine if the homeowner can seek additional damages for bad faith. In the very least, an attorney can initiate legal action to make sure that the insurance company pays what is needed to fix the home or property.

Delays in Payment
Everyone knows that it will cause serious problems if a homeowner’s insurance company denies a claim. A homeowner could be left with a serious and dangerous problem with no way to fix it. Sometimes, an insurance company will not deny a claim outright. The company may delay payment instead. They may delay the payment for an indefinite and unreasonable amount of time. A delayed payment can be just as bad, if not worse, than a denied payment.

An unjustified delay in payment can be a form of bad faith. Bad faith is a legal concept that refers to a situation where an insurance company is purposely refusing to honor its obligations to the homeowner without a good reason. An experienced attorney can evaluate the unique circumstances of a homeowner’s claim and determine if the situation rises to the level of bad faith. If so, the homeowner could be entitled to additional money damages from the insurance company.