If you’ve ever gone through an insurance claims process, you know it can be downright unpleasant. Your insurance adjuster most likely was hard to get a hold of, and when you did talk, they may have made it seem like you were asking for way too much—even if all your figures were 100% justified. With hurricane season peaking in September and the massive disruption inflation and sky-high replacement costs causing the insurance companies, we fully expect to see more delays, underpays, and outright denials of rightful claims.
We’ll cover all the stats and how our first-party insurance attorneys go to bat for our clients when the insurance company refuses to offer everything a claim deserves.
Why Do Insurance Companies Deny or Underpay Claims?
Despite what clever advertising campaigns lead you to believe, insurance companies are not here to be your friend or neighbor. These are massive for-profit companies that are incredibly successful. In 2021 alone, insurance giant AIG pulled in more than $52 billion dollars in revenue. Insurance companies are so profitable because they are masters of risk management. They set premiums based on the risk of paying out on a claim and build in a hefty “cushion” to ensure they protect their bottom line.
Most insurance companies are publicly-traded, meaning they exist to produce the most significant profit possible for their shareholders. After collecting premiums appropriate for each type of risk they cover (think homeowners insurance, car insurance, etc.), the insurance company reinvests these funds. Back to our AIG example, in the 100 years they’ve existed, AIG has amassed more than $521 billion in assets. So, we have an incredibly profitable business model. How? Because both risks and payouts are minimized by delaying (which keeps assets in insurance companies’ bank accounts longer), underpaying, or simply denying a rightful claim on a presumed technicality.
Top Reasons Why Insurance Companies Deny Claims
When you have damage to your home and go to file a homeowner’s insurance claim, you expect to have a swift resolution. After fighting the insurance giants for decades, our team has seen time and again where this simply isn’t the case. After a major peril like a hurricane, flood, or fire damages your home or business, the most sinking feeling in the world is to receive a denial.
Some of the most common reasons for insurance claim denials include:
- Late claims – some insurance policies hide language in the fine print that can specify how long you have to file a claim. So if you ever have a loss event, it’s best to start documenting everything and go ahead and file your claim to begin the process. Getting an attorney from the get-go can help ensure your interests are protected, and all the hassle of dealing with the insurance company is off your shoulders.
- Late premiums – if a policyholder is late paying a premium, some companies use that as an excuse to deny a claim. It’s better to keep up with premium payments than give your insurance company any reason to waffle.
- Giving “false” statements – after a natural disaster, you will undeniably be stressed, confused, scared, and generally not in your best state of mind. If you say something questionable to the insurance company, they may seize on that and use it against you. Instead, letting all communications go through your insurance dispute attorney is best.
- Not enough documentation – despite the adjuster coming out, the insurance company may say you didn’t provide enough information for them to move forward. Farah and Farah investigators can uncover even the most-hidden damage inside and around your property and document it to a “T” to make sure it’s all there in black and white.
- Not taking preventative actions post-loss – after the event, you need to take action to ensure the property damage doesn’t get worse. Otherwise, the insurance company might try to use this as grounds not to cover a given repair. Our team never places a cap on an insurance claim and can help you follow all the steps to securing your home or property after a loss event.
Farah and Farah takes over managing your hurricane and other damage claims so you don’t have to. We have insurance dispute attorneys particularly skilled in this practice area available right now.
When Insurance Companies Go Low, We Go High, Seeking Max Compensation for Your Covered Loss
With hurricane season heating up as we near the end of summer, it’s a good time to ensure that your insurance coverage is up-to-date and adequate for your home and belongings. Property values have been rising so your insurance replacement cost may need to be increased as well. But when the dark day comes, if you face an unexpected loss, you are not alone in your fight. Call us and talk to us if you are fed up with the runaround. You can speak with an attorney for free now. We’ll take over dealing with the insurance company so you can focus on the here and now of putting your life back on track.