Dealing with Insurance Claim Denials
Insurance companies sometimes refuse to pay claims submitted by its policyholders. When an insurance company does so, this is called “denying” the claim. A claim may be denied, for example, because the company has determined that the loss is not a type that is “covered” by the terms of the insurance policy or that the person who suffered the loss is not an “insured” for purposes of the policy or that a policyholder engaged in some type of misconduct which “voided” the coverage. Occasionally, a claim may be denied in error. In any event, due to the complexity of insurance policies, any resolution of coverage disputes often requires careful analysis of the unique facts and circumstances specific to the denial in light of applicable state law. Time is of the essence. All disputes have a specific period of time for which they must be addressed, either through the State Insurance Commission, or by legal means. If you think your claim has been improperly denied, find out which statutes or time frames apply to ensure that you preserve your rights and claims against your insurer.
Tips on what to do if your insurance claim is delayed or denied:
Tips for Delay
If your claim is unduly delayed, it is possible the insurance adjuster reviewing your claim has is missing information that they need to make a decision. There may also be times when the adjuster is undecided as to whether to pay the claim. In this instance, it is best to cooperate within reason with your insurer. You can provide the missing information which can turn a potential denial into an acceptance. Whenever you call your insurance company, make every effort to be helpful and not confrontational. Do not let them forget about you either! Telephone your insurer regularly — every 2-3 weeks. Be polite, and be persistent. If you do not receive suitable responses or see any progress always ask for a supervisor or manager. Keep detailed notes identifying who you talked to, what you discussed, and make sure you find out what is to occur next. If you still are not seeing timely progress, contact an attorney who can negotiate on your behalf and/or take the necessary steps to put the insurer on notice of a potential bad faith claim lawsuit.
Tips for Denial
If your claim is denied, make sure you get the denial in writing and insist on a written explanation of the reasons for the denial. Take note of the reason(s) given in the insurance company’s denial letter. Next, read your insurance policy carefully and check the reason for denial against your policy. Look for anything that does not add up or make sense. The denial may be due to an error based on a lack of complete information, an incorrect reading of your policy or misinformation. But it may also be a correct determination by the insurance company.
Document every phone call to your insurer by noting the date, time, name of person you spoke with and a detailed summary of the conversation. Follow-up with a letter by certified mail with return receipt to your insurance company memorializing that conversation and the issue you have with it. Ask for a written response within 2-3 weeks. Be aware that the insurance adjuster is likewise taking detailed notes about their conversation with you. Keep all your notes as well as all correspondence to and from your insurance company. Make sure that you maintain your files and records in an organized manner and keep them readily accessible in a convenient place.
If you still believe coverage has been wrongfully denied after reviewing your insurance company’s reasons and after reading your policy, there are options available to you to remedy the situation. These options include:
1. Write your Insurer
Write your insurance company and politely explain to them where their mistake is and provide them with documentation to support your position. Quote your policy where necessary. Many claims come down to an interpretation of the policy, so a good case explaining why you believe your claim is valid may lead to reconsideration. If the insurance company realizes it has made a mistake, or you are correct in that the adjuster made an error, they will reopen your claim and move forward with their investigation. In all cases where you do not understand or agree with their reason for denial, ask for clarification.
2. Contact your Insurance Agent
Take the denial letter to your insurance agent and see whether he or she agrees with the insurance company’s decision. If your insurance agent agrees with you or even if they do not, ask your insurance agent to contact the insurer on your behalf to obtain clarification for the denial or to attempt to persuade the insurer to reverse its decision. Your insurance agent oftentimes has more direct access to decision making supervisors than you.
3. Speak to a Supervisor
Call and insist that you speak with a supervisor about your claim to discuss the error.
4. Appeal the Decision
If the above steps do not provide an adequate resolution, appeal the insurer’s decision to the State Insurance Commissioner.
5. Hire a Lawyer
Sometimes, you have no choice but to seek legal representation. When this is required, hire an insurance bad faith attorney to discuss the error with the insurance company. Insurance companies tend to sit up and take notice when lawyers are brought in. Once a lawyer or attorney is hired, the insurance company will be forced to communicate through your lawyer thus taking the burden off of you. Once you engage an attorney, you should not contact your insurer directly; all contact with your insurer should be though your attorney.
6. Suing your Insurance Company
If you cannot resolve the dispute amicably, you may be forced to sue the insurance company for bad faith, breach of contract, and/or violations of your state’s insurance code. It is crucial that you obtain an attorney experienced in homeowner’s insurance coverage litigation if you believe your insurance company is not handling your claim fairly.
Remember: You have certain rights under your policy and under state law. Your insurance company has a duty to fairly and promptly settle your homeowner’s insurance claim in good faith. If your insurer does not do so, you must take steps to preserve your rights.
Tips for Filing Your Fire Insurance Claim
Insurance carriers are expecting to receive hundreds of thousands of fire claims in the upcoming months due to the recent southern California wildfires. Given the high number of cases that each insurer within the state will have to investigate, the earlier that you file the better. If your home was damaged by the fires and if you have not yet filed a claim with your insurance carrier, there are some simple tips that may make the difference between being compensated completely for your losses or receiving pennies on the dollar.
Typically, homeowners’ policies cover wind, fire and lightning damage. If your home was damaged or completely destroyed by smoke or flames, the typical insurance company will pay to have your home rebuilt or to replace the damaged portions.
In addition to paying for physical damage to your home, homeowners’ policies pay for damage to other property and structures on the premises, like your garage or tool shed, damage to your furniture, clothes, appliances and other personal possessions. Additional living expenses will likely be covered as well.
Tip 1 – Contact Your Carrier Right Away IN WRITING
Contact your insurance carrier to begin the process to file your claim as soon as possible.
You will likely need to provide your insurance carrier with the following:
A description of your loss. Be as detailed as possible, including:
Tip 2 – Know Your Deductible
Your deductible is the amount that you are required to pay toward your claim before the insurance company begins to pay. Find out from your insurer how much your deductible is; if your losses are less than the deductible, you may want to reconsider filing the claim.
Tip 3 – Keep Your Receipts
Keep all of you receipts! If you stay at a hotel, eat at a restaurant, buy clothing, or make any other expenditure because of the fire, make sure you get a receipt. All of these items may be reimbursable depending on your coverage. Your insurance company might even cover your housing expenses, depending on your plan. Policies that include “additional living expense coverage” or “loss of use coverage” options will pay for similar housing while repairs are being made to your home or if you have to permanently relocate. Be aware that in most cases, you must request reimbursement for the expenses that you incurred.
Tip 4 – Assess Your Damage
Keep track of everything that was damaged, and be as accurate as possible. Identify the manufacturer, brand name, model and the place and date of purchase for as many of your losses as possible. Divide your list into categories, items in different locations in your home such as: living room, master bedroom, kitchen, etc. Make your list as soon as possible, and take or find pictures of anything you can.
Tip 5 – Have the Claims Adjuster Inspect Your Loss
Before you begin cleaning up and/or throwing things away, make sure that your claims adjuster has been through your home and inventoried or identified all items that was to be included in your claim.
Tip 6 – Secure Your Property
If you cannot return to your home because of fire damage, make sure that you secure the property. If necessary, board up the windows and doors to prevent theft and vandalism even though your homeowner’s policy may cover these losses.
Tip 7 – Get Estimates
If your property requires temporary repairs that would allow you to move back into your home more quickly, get at least two estimates from reliable companies in your area for the work. Sometimes your adjuster may be able to approve your claim on the spot based on your estimates.
Tip 8 – Make Temporary Repairs
Before beginning a temporary repair, talk to your claims adjuster regarding any repairs that are needed to protect you and your home from further damage or injury. Typically, temporary repair costs are covered by your policy, but make sure that you do not make any repairs until you get the “ok” from your adjuster. Again, retain copies of all bills for any repairs that you make. The most important thing to remember is to document all steps that you take to mitigate your losses. Keep a detailed record of all of your expenditures and repairs.
Tip 9 – What Do I Do If My Insurance Company is Acting in Bad Faith?
If you believe that your insurance carrier is acting in bad faith (i.e., refusing to pay even though you believe the loss is covered), contact an experienced bad faith attorney to evaluate your case, and file a claim with the California Department of Insurance at:
California Department of Insurance
Consumer Communications Bureau
300 South Spring Street, South Tower
Los Angeles, CA 90013
1-800-927-HELP (4357) or 213-897-8921
TDD Number: 1-800-482-4TDD (4833)
The Hotline hours are from 8:00 a.m. – 5:00 p.m., Mon. – Fri. (Except Holidays)
Keep in mind that you have a limited period of time to act in cases of bad faith, so take action immediately and remain proactive in your mission to have your loss covered.
Fire damage is a threat to homeowners nationwide. In the past few years, fire damage in California has caused over $1 billion worth of structural damage. Litigation is often the only recourse available to victims of real property loss due to fire damage. The Law Offices of Patrick E. Catalano represent people against their insurance companies to remedy damage suffered to their real estate from a fire. If you have been denied the benefits you are owed from a fire insurance policy you purchased to protect you, the Law Offices of Patrick E. Catalano may be able to help.