There are many reasons that your insurance settlement may fall short of the repairs needed to make you whole again. Most commonly, the reason is policy limits. Homeowners' insurance policies often have maximum limits on the amount they will pay for certain types of damage or for the total claim. Should the cost of repairs exceed these limits, the homeowner will need to cover the difference out of pocket.
Many property owners also don't realize the impact that deductibles can have. Now, your deductible is the amount you must pay before the insurance company starts to cover the claim. If the deductible is high, it can significantly reduce the payout amount, leaving the homeowner with a larger financial burden.
When it comes to dealing with Florida property damage, you're managing a situation you're not familiar with. You may also assume that your insurer will also pay for the full value of your items - it seems like a fair assumption...however, insurance companies may also depreciate the value of damaged items based on their age and condition. (This is what's referred to as Replacement cost value vs. Actual cost value (RCV and ACV.) So, your settlement payout is based on the current value of the items, not the cost to replace them with new ones. This depreciation can result in a lower payout than expected, especially for older items.
This article discusses how to maximize your settlement payment and what to do if you don't receive the appropriate monies for repairs to restore your property.
Steps That Can Be Taken to Prevent Underpayment in a Claim
Too often, our firm encounters payments that may be lower than the actual cost of repairs. This can tend to happen if the adjuster (who is employed by your insurance company) underestimates the extent of the damage or if additional issues are discovered during the repair process.
I don't want you to run into the case that your claim payout may not cover all necessary repairs. Here's what to do to maximize the amount you receive for your claim:
Understand your policy, including coverage limits, exclusions, and the claims process. Knowing what is covered and what is not can help you better prepare for potential disputes and ensure you have adequate coverage.
Regularly review and update home or business coverage as needed. This ensures that your policy limits reflect the current cost of rebuilding or repairing your property to avoid being underinsured to begin with.
Maintain an inventory of your personal belongings, including descriptions, purchase dates, and values. This can be invaluable in substantiating claims for damaged or lost items and ensuring you receive appropriate compensation (you'll recall the RCV vs. ACV calculation of value).
Remember: Errors or omissions in the claim documentation can also result in lower payouts. Take videos and photos to show the true extent of the damage. If there are discrepancies in the claim, the insurance company may reduce the total payout amount or deny your claim.
Obtain estimates from several reputable contractors for the cost of repairs. Providing multiple estimates to your insurance company can help demonstrate the true cost of the necessary repairs.
Communicate often. Keep detailed records of all correspondence with the insurance company, including emails, phone calls, and letters. Clear communication can help prevent misunderstandings and ensure your claim is processed accurately.
Now, should these not help with getting the proper amount needed for repairs, we can make a supplemental claim to help cover the damages. If you have questions, please don't hesitate to contact Kyle Staggs, Esq.
Legal Options Available if the Payout is Insufficient
Your first option is to file a formal appeal with your insurance company. This process typically involves submitting additional documentation, such as contractor estimates or receipts, to support your claim that the initial payout was inadequate. Be sure to review your policy carefully to understand the specific procedures and deadlines for filing an appeal.
If the appeal process does not yield satisfactory results, then you may consider mediation or arbitration. The differences in these methods are simply that mediation involves a neutral third party who helps both sides reach a mutually agreeable solution, while arbitration involves a neutral third party who makes a binding decision on the dispute.
Consulting with an attorney who specializes in insurance claims can also be a viable option should your claim be undervalued. An experienced lawyer can review your policy, assess the validity of your claim, and advise you on the best course of action. We can also represent you in negotiations with the insurance company or in court if necessary. Legal representation can be particularly beneficial if your claim involves complex issues or if you believe the insurance company is acting in bad faith.
In some cases, you may have grounds to file a lawsuit against your insurance company for breach of contract or bad faith. It's this firm's goal to have the insurer fulfill its obligations as outlined in the policy. Kyle Staggs, Esq. will be with you at every step of legal action and assist you through the process to obtain the compensation you deserve.
Negotiating with the Insurance Company
Depending on the cause of and extent of your Florida property damage, you may not find the initial offer acceptable. Then, you'll need to negotiate with the insurer. Some owners attempt these negotiations on their own with the insurance company, but I recommend that you speak with a claims professional like me prior to accepting the settlement check.
Taking the right steps after receiving an insufficient payout for home repairs is crucial. If you’re feeling overwhelmed or unsure of the next steps with your insurance claim, don’t go it alone. Enlisting the help of an attorney can make all the difference in achieving a fair resolution. Kyle Staggs, Esq. has extensive experience in handling insurance claims disputes and can provide the guidance you need to navigate this challenging situation.
Let our firm help make things right again with a fair and just claims settlement. Contact our seasoned claims law firm today to discuss your unique case and explore your options.
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