While homeowners insurance policies are designed to protect policyholders from financial loss when their home is damaged by covered perils, your insurer knows that it is in the company’s best interest to deny your claim. Although the purpose of insurance is to pay claims when damage occurs, your insurance company saves money be denying claims. An insurance company’s effectiveness in denying valid claims and significantly underpaying claims constitutes a basis for increasing profits while continuing to accept premiums.
While insurance companies routinely engage in shifty tactics to avoid paying claims, such practices are fundamentally unfair. However, insurance companies and adjusters often treat the insurance claims process as a game of chess with every move planned to compromise payments on claims. Our Miami homeowners insurance coverage law firm discusses below a wide range of strategies that insurance companies use to frustrate policyholders whose homes undergo property damage. As a Florida insurance claims attorney and former claims adjuster, my law firm has helped many policyholders obtain the compensation they are entitled to from their insurance company. Some of the unethical tactics used by insurers and their adjusters include:
- Inappropriate Investigation Tactics: When a policyholder files a claim, an insurer has a legal duty to conduct a timely and thorough investigation of the claim. The investigation must include determination of the cause of loss and a valuation of the claim. Insurance companies sometimes will fail to conduct a careful investigation or ignore important evidence regarding a claim to justify a position that minimizes the insurer’s liability.
- Refusing to Settle for Policy Limits: If an insurer unreasonably refuses to settle a liability claim for policy limits and exposes the insured’s personal assets to enforcement of a judgment, this practice can constitute bad faith.
- Policy Cancellation: Insurance companies sometimes will try to unjustifiably cancel a policy merely because a policyholder makes a valid claim. Depending on the timing of the damage, the date the policy was obtained and the type of coverage, the insurer may try to use omissions or misstatements on your insurance application to retroactively rescind your policy and deny the claim.
- Delays in Resolving a Claim: While the insurer has a reasonable amount of time to investigate the claim, there are deadlines for informing policyholders whether the claim will be covered and to pay the claim. When the insurance company fails to meet these deadlines, the delay can constitute a bad faith practice.
- Overly Burdensome Demands: Although the insurance company has a duty to investigate a claim, the insurer’s power to request information and documents cannot be used to harass or abuse policyholders. If the insurance company is making unreasonable demands unrelated to substantiation of your claim, this practice also can justify bad faith liability.
If your insurance company refuses to process your insurance claim in a timely manner, you should seek legal advice regarding your rights and remedies. If you have questions about Florida insurance claims, you are welcome to an experienced Miami insurance claims attorney from my law firm. My law firm represents policyholders in claims disputes in Miami and throughout Florida. The Law Firm of J.P. Gonzalez-Sirgo, P.A. offers free consultations and case evaluations. No Recovery, No Lawyer Fees. Call 305-461-1095 or Toll Free 1-866-71-CLAIM.