Filing a homeowners insurance claim can be stressful, especially if the settlement you receive is far less than expected. An underpaid homeowners insurance claim may not cover the full cost of repairs, leaving you to pay out of pocket. Unfortunately, underpayments are not uncommon, but you don’t have to accept a low offer without a fight.
If you believe your claim has been underpaid, here’s a step-by-step guide to help you challenge the insurance company and get the compensation you deserve.
1. Review the Settlement Offer and Policy Details
The first step is to carefully review the insurance company’s settlement offer and compare it with the details of your policy.
Check Your Coverage:
Look at the specific coverage limits (e.g., dwelling coverage, personal property coverage) and exclusions in your policy.
Verify whether your policy is based on actual cash value (ACV) or replacement cost value (RCV). ACV considers depreciation, while RCV pays the full cost to replace or repair without deducting depreciation.
Understand the Adjuster’s Report:
Review the insurance adjuster’s report to see how they calculated the payout. Check for errors, missing items, or undervalued estimates.
2. Document the Damage Thoroughly
If you haven’t already done so, gather as much evidence as possible to support your case. Proper documentation can strengthen your argument for a higher payout.
Take Photos and Videos:
Capture detailed images of all damage, including structural damage, water stains, broken windows, damaged roofs, and personal belongings.
Create an Inventory of Damaged Items:
List all damaged or lost items, including their approximate value, purchase dates, and any receipts or proof of ownership you may have.
Get Independent Repair Estimates:
Hire licensed contractors or appraisers to provide independent estimates for the cost of repairs or replacements. This can help you challenge any low estimates provided by the insurance company’s adjuster.
3. Communicate with the Insurance Company
Once you’ve reviewed the settlement offer and gathered additional evidence, it’s time to contact your insurance company to discuss the underpayment.
Request a Detailed Explanation:
Ask the insurer for a written explanation of how they arrived at the settlement amount and why certain items may have been excluded or undervalued.
Submit Additional Evidence:
Provide the insurance company with any additional documentation, including photos, repair estimates, and a detailed inventory of losses, to support your request for a higher payout.
Be Persistent but Polite:
Insurance claims can take time, and you may need to follow up multiple times. Keep a log of all communications, including dates, times, and the names of representatives you speak with.
4. Consider Hiring a Public Adjuster
If the insurance company is still unwilling to increase your payout, you may want to hire a public adjuster.
What Is a Public Adjuster?
A public adjuster is an independent claims professional who works for you, not the insurance company. They conduct their own inspection, estimate the cost of repairs, and negotiate with the insurer on your behalf.
Benefits of Hiring a Public Adjuster:
Maximize your payout by ensuring all damages are accounted for.
Save time and reduce stress by letting them handle the negotiations and paperwork.
Public adjusters typically charge a contingency fee (usually between 5% and 15% of the final settlement), meaning they only get paid if you receive a higher payout.
