My Insurance Company Underpaid My Claim: What Now?
Understanding underpaid claims and how to challenge an unfair settlement
Your homeowner insurance policy is supposed to be a financial safety net if your home in Florida is damaged or destroyed. After filing a claim, you discover that the amount of the settlement you have been offered falls far short of what is needed to repair or replace your damaged home. Insurance companies routinely lowball claim settlements in Florida due to a variety of factors. But if you’ve been offered an insurance claim payout that you know doesn’t cover your damages, don’t despair. Florida homeowners have several options for fighting back against insurance company underpayments. This article covers the reasons why your insurance company may be shorting you on your claim, how to tell if your insurance claim was underpaid, and the steps you can take to get the insurance company to pay what you are owed.
The most common reasons why insurance companies underpay insurance claims in Florida include:
Overlooked Damage: Insurance adjusters can easily overlook hidden damage during their initial inspection, such as water damage behind walls, undetected roof damage, or structural damage that requires further evaluation.
Scope of Work Limitations: Insurance companies’ repair estimates often contain missing or shortchanged line items and underestimate the true cost of repairs at today’s Florida construction prices.
Policy Misinterpretation: Insurers may misinterpret their own policy provisions, coverage limits, or exclusions to avoid paying out more on a claim.
Adjuster Caseloads: In the aftermath of widespread disasters like hurricanes or flooding, insurance adjusters are assigned huge caseloads and often rush the assessment process, missing key details about your claim.
Spotting an unfair settlement offer from your insurance company can be challenging, but a close review of your insurance company’s claim payment decision and comparison with your own damages can point you in the right direction. Here’s how to know if your insurance claim has been underpaid:
The Settlement Payment Does Not Cover All of Your Damages: The biggest red flag that you’ve been shorted on an insurance claim is when the insurance payment you received does not cover all of the items on your property loss list or only partially pays for certain losses.
Repair Estimates From Contractors Are Higher: Getting repair estimates from licensed, professional contractors is the best way to get a good idea of what your claim is worth. If contractor estimates for repairs are significantly higher than the insurance settlement check that you received, your claim was almost certainly underpaid.
Entire Categories of Damage Are Missing: A proper insurance claim payout from your insurer should include payments for structural damage, personal property damage, additional living expenses (if you are displaced), and other categories of damage covered in your policy. If entire categories of damage are missing from your settlement offer, your claim was underpaid.
Your Insurance Company Offers to Settle Your Claim Extremely Quickly: Beware of quick settlement offers from your insurance company, especially when a quick offer arrives before a proper assessment of damages could have been completed.
Parts of Your Claim Are Denied With No Real Explanation: Insurance companies are required to adequately investigate and evaluate your claim. Insurers who deny parts of your claim without explanation that ties back to specific policy language may not be meeting their obligation to process claims properly.
Your Claim Payment Does Not Include Code Upgrades**: Florida building codes change frequently, especially after major hurricanes. Ordinance and law coverage in your policy may pay for code upgrades and related expenses, but these are often excluded from an insurance company’s initial settlement offer.
Florida law offers multiple avenues for homeowners to dispute their insurance company’s decision not to pay a claim in full. The process of contesting an insurance company can be time consuming and challenging, but in some cases hiring an experienced public adjuster may be your best option. Here’s what to do if you believe your insurance claim was underpaid:
Ask the Insurance Company to Review Your Claim: The first step is to request that your insurance company review your claim. Send a detailed letter to your insurance company explaining the reasons your damages exceed their settlement offer and include copies of all supporting documentation such as contractor estimates, photos, and reports.
Pay Attention to Florida Time Limits: Florida insurance law requires that insurance companies acknowledge receipt of your claim within 14 days and make a claim determination within 90 days. Insurers must complete these timeframes unless there are factors beyond the insurance company’s control.
File a Complaint With the Florida Office of Insurance Regulation: This Florida state agency regulates insurance companies and can investigate potential violations of Florida insurance laws.
Hire a Public Adjuster: Licensed public adjusters represent policyholders, not insurance companies. They can professionally document your damages, develop a scope of work and help negotiate a better payout with your insurance company. Public adjusters in Florida are licensed by the state and are limited by Florida law to charging no more than 20% of the claim payout for most claims, and no more than 10% for hurricane-related claims filed after the governor issues a state of emergency.
Document All Communication: Keep meticulous records of all conversations with the insurance company, including the date, the representative you spoke with, and a summary of the conversation. Save all emails, letters, and documents related to your claim.
Know Your Homeowner Claims Bill of Rights: Florida’s Homeowner Claims Bill of Rights gives you the right to receive a claim acknowledgment within 14 days of filing and a decision within 90 days, absent exceptional circumstances.
An insurance company’s underpayment of your claim can cause a frustrating delay in your recovery from property damage or loss. As a homeowner in Florida, you have rights and several options for fighting back against an insurance company that unfairly underpays your insurance claim. The important thing is to act quickly, document your case thoroughly, and be aware of the specific policy provisions and Florida laws that apply to your insurance claim. While it can be an uphill battle to dispute an insurance company decision, you don’t have to go it alone. A public adjuster works on your behalf and can help properly document your claim and fight for a fair payout. If you are concerned that your insurance claim has been underpaid, call for a free claim review to see how a public adjuster can help with your insurance claim.
Vanguard Claims Solutions is a trusted licensed public adjusting firm specializing in maximizing property insurance claims for residential and commercial policyholders.
