When dealing with property damage, discovering that your home insurance claim has been underpaid can be frustrating and overwhelming. An underpaid claim means you may not receive enough to cover the full cost of repairs or replacement, leaving you with unexpected out-of-pocket expenses. Fortunately, there are steps you can take to address an underpaid claim and ensure you receive the settlement you deserve.
Understand Why Your Claim Was Underpaid
The first step in resolving an underpaid claim is understanding the reasons behind the payout. Common reasons include:
- Incomplete Damage Assessment: The insurance adjuster may have missed or underestimated certain damages.
- Policy Limitations: Specific limits or exclusions in your policy might cap the payout.
- Low Estimates: The insurance company’s estimate for repairs or replacements may not reflect current market rates.
- Errors in Documentation: Missing or incomplete evidence of damages can lead to an underpayment.
Review the explanation of benefits (EOB) provided by your insurer to identify the factors affecting your settlement amount.
Review Your Policy in Detail
Your insurance policy is the blueprint for your coverage and payout. Carefully review:
- Coverage Limits: Check the maximum amounts your policy covers for specific damages.
- Exclusions and Endorsements: Verify if any exclusions apply to your claim and whether you have additional endorsements that provide coverage.
- Appraisal Clause: Many policies include an appraisal clause that allows disputes over the claim amount to be resolved through an independent review.
Understanding your policy’s terms and conditions will help you determine whether the underpayment is justified or an error.
Gather Additional Evidence
If you believe your claim was underpaid, gather additional documentation to support your case. This might include:
- Photos and Videos: Capture clear images of all damages from multiple angles.
- Repair Estimates: Obtain estimates from licensed contractors to compare with the insurer’s assessment.
- Receipts and Invoices: Provide proof of any completed repairs or replacement purchases.
- Expert Opinions: Consult engineers, roofers, or other specialists to validate the extent of the damage.
The more detailed and comprehensive your evidence, the stronger your case will be when disputing the underpayment.
Request a Reassessment from the Insurance Company
Once you have gathered additional evidence, contact your insurance company to request a reassessment of your claim. Be prepared to:
- Present New Evidence: Share the documentation you’ve collected to support your position.
- Explain Discrepancies: Highlight any differences between the insurer’s assessment and your findings.
- Remain Professional: Approach the conversation calmly and professionally to foster productive communication.
In many cases, presenting additional evidence can prompt the insurer to adjust their settlement offer.
Involve a Public Adjuster
If your efforts to resolve the underpayment directly with the insurance company are unsuccessful, consider hiring a public adjuster. Public adjusters are licensed professionals who represent policyholders, not insurance companies. They can:
- Conduct a Detailed Inspection: Ensure all damages are documented thoroughly.
- Prepare an Accurate Estimate: Use specialized tools like Xactimate to calculate repair costs.
- Negotiate with the Insurer: Advocate on your behalf to secure a fair payout.
Public adjusters work on a contingency basis, meaning they only get paid if you receive additional compensation. Their expertise can significantly improve the outcome of your claim.
Invoke the Appraisal Clause
If your policy includes an appraisal clause, you can use it to dispute the claim amount. This process involves:
- Appointing an Appraiser: Both you and the insurance company select independent appraisers.
- Agreeing on a Umpire: If the appraisers can’t agree, a neutral umpire is appointed to make the final decision.
The appraisal process can help resolve disputes more quickly than litigation and often results in a fair settlement.
Seek Legal Advice if Necessary
In cases where disputes persist, or the insurer acts in bad faith, consulting an attorney may be necessary. An attorney can:
- Review Your Case: Determine if the insurer’s actions violate Texas insurance laws.
- File a Bad Faith Claim: Hold the insurer accountable for unfair practices.
- Pursue Legal Action: Advocate for your rights in court if needed.
Legal action should typically be a last resort, but it can be an effective way to resolve serious disputes.
Prevent Underpayments in Future Claims
While you can’t control every aspect of the claims process, taking proactive steps can reduce the risk of underpayment:
- Document Your Property Regularly: Maintain updated photos and videos of your home and belongings.
- Keep Records of Improvements: Save receipts and invoices for renovations or upgrades.
- Work with a Public Adjuster Early: Engaging a public adjuster from the start can help ensure your claim is presented thoroughly.
Bridget Baldi - Public Adjuster 