Navigating an Insurance Claims Dispute with Your Insurance Carrier: Preliminary Steps

J.P. Gonzalez-Sirgo
Founder of J.P. Gonzalez-Sirgo, P.A.

While an insurance agent might make the claims process seem straightforward and businesslike when you are purchasing a policy, the actual claims process can be a much rockier road.  When an insured’s home suffers property damage at the hands of vandals, the policyholder generally can progress through the process more efficiently and obtain a better result with an understanding of insurance claims.  Whether the dispute is related to nonpayment, underpayment, or unjustified delays, there are a number of steps that can get your claim off to the right start.

The most important initial step is to understand your rights because the insurance industry is heavily regulated.  State law covers a wide range of topics in terms of defining applicable practices for insurers when it comes to settling claims, bill collection, and other matters.  While the specifics of applicable statutes might vary, the name of this type of law in most states might be something like the “Unfair Insurance Settlement Practices Act” or the “Unfair Insurance Practice Act,” or some similar name.  One way to learn more about the law in your state that governs the practices of insurers is to contact your state’s insurance regulatory agency.  Although every state is unique and enacts laws that have differences in terms of detail and nuance, the vast majority of states impose regulations regarding the following issues:

  • An insurer cannot request production of unnecessary forms with the objective to delay the adjustment or payment of a claim.
  • Insurers are not permitted to withhold payment under one portion of a policy to compel an insured to settle another portion of the claim.  If the insurer refuses to pay under the collision portion of a policy to pressure a policyholder to settle a liability claim, this type of “claims extortion” generally is prohibited.
  • An insurance company cannot turn the court appeals process into a settlement tool by challenging every unfavorable trial court decision.  While both sides to a claims dispute can appeal an adverse ruling when there is a legitimate reason, a standard practice of appealing every decision to encourage low-ball settlements is not allowed.
  • The denial of a claim or unreasonable delays in the claims process must be based on a legitimate justification that is communicated to the policyholder.  The most typical justifications offered involve lack of coverage, failure to pay premiums, or refusal to cooperate with reasonable requests for information and/or documents.
  • The policy may not be changed without notice to the insured because the policyholder must be given a right to terminate coverage when terms are changed from the initial agreement.  The insurers also may not misrepresent the terms of the policy by indicating a provision indicates one thing when it means something different.
  • Insurers have a legal duty to acknowledge receipt of a claim, to decide on the issue of coverage, and to pay valid claims within specified timelines typically defined under state law.

Some minor disputes can be resolved simply by contacting your broker who has an established relationship with the insurance carrier.  While this will not necessarily be effective in overcoming a denial, this can clarify simple matters like a miscommunication or the need to provide more information.  If the insurer failed to pay a specific contractor, for example, you might submit all records regarding correspondence, disputed invoices, and the policy number.  If you do not have a broker or agent, an alternative is to contact the insurance company’s customer service department.

If these attempts are unsuccessful, the next stage is to send a letter to a manager at the insurance company.  The letter should in clear concise language outline the problem and propose a resolution that you would consider appropriate.  The correspondence should include the identity of those you have spoken to or communicated with in an effort to resolve the dispute.  The letter should also summarize the nature of those prior communications.  The same documentary evidence submitted to the agent, broker, or customer service representative needs to be provided to the appropriate manager at the insurance company.

When these informal methods to resolve your claim fail, the best way to jump start the process is to speak to an experienced insurance claims professional like a Florida insurance claims lawyer.  An insurance claims lawyer can guide you through the appraisal process or help you obtain a favorable expert report regarding the nature and extent of the loss and file a lawsuit for breach of contract or insurance bad faith depending on the circumstances.

Our Miami bad faith insurance law firm invites you to contact us if you are having difficulties with your insurance company.  Florida insurance claims lawyer J.P. Gonzalez-Sirgo handles claims against insurance companies 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.

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