The bumps in the road that you can experience with an insurance claim as a homeowner are unmatched, especially if you are going about it all on your own. While insurance companies are assumed to be your friend in situations where your home is left in shambles after a disaster, this is not always the case. Instead, these big corporations are notorious for taking advantage of the average consumer that is not seasoned to the claims process. As a homeowner, it is important to understand what can possibly go wrong before proceeding.
Possible Insurance Claim Problems
When you are going head up against your home insurance company, there are two main problems that can occur on your end. By using a series of tactics throughout the claims process, they can try to lowball you on your settlement check at the conclusion of it all. In the worst-case scenario, they can even try to deny your claim completely. If you are not careful and you try to go at the process alone, you can end up in a position that is far worse than where you started. In this article, we look at 5 early signs of insurance claim problems so that you’ll be aware of potential problems before jumping into the deep end.
1. Extended Timelines
When a natural disaster occurs in an area and wipes out homes in its path, the insurance companies are quickly flooded with claims that all need to be handled urgently. With your home more than likely not the only one that was affected by the chaos the natural disaster has left in its wake, it is common for your claim to get backed up on the list that the insurance company is being faced with.
As a result, you might feel like it is normal to be waiting for extended periods of time for the process to come to a close. While it is true that some delays can be expected, you should be aware of the tactics that these companies sometimes use to avoid paying the proper settlement. Before going into the home insurance claims process on your own, there are a few important legal facts to keep in mind. Depending on the state that you live in, there will be laws and regulations that limit insurance companies from dragging out the claim more than what is necessary.
These are the general rules for insurance companies within the United States.
The first rule that home insurance companies are bound by has to do with their response time through the entire process of the claim. When you initially file your claim, you should hear something back essentially confirming that your inquiry was received and is being worked on. The exact timelines will vary from state to state, but the general laws place this requirement within a 10-14 day window. Therefore, if you do not hear anything from the insurance company after a period of about two weeks, you should be worried about something going wrong with your claim or that your insurance company is stalling on purpose.
Settlement or Denial Notification
The next limitation around home insurance claims requires the insurance company to resolve the entire situation in either party’s favor within no more than 90 days. Throughout this time frame, they will be given the opportunity to look over all documentation and proof supplied by the homeowner in order to make a final decision. At the end of the standard 90 day period, you will receive a formal letter that lets you know the results of your claim. Whether you will be getting a settlement or a denial, you will be informed based on the contents of this notification. This is something that you should be expecting at the end of the claims process, but minimal communication between you and the insurance company paired with slowed responses are cause for worry, and should be handled directly before it gets to this point.
2. Questions Without Answers
In the initial stages of your claim, it is completely normal for your insurer to ask questions and request proof and documentation such as inspections. The entire process of obtaining a settlement will require you to send in a lot of information as your goal is proving that your property has suffered the damages that you were claiming. In addition, you will need to communicate frequently with the company that you pay for insurance until you are able to receive the proper payment.
These are the normal questions that you should expect from your insurance company after you have first filed your claim:
- What happened that affected your home?
- What are the damages to your home/belongings?
- Do you have proof of these damages?
Once these questions have been answered and all information has been sent over, there should be no need for any more speculation from the other side. Another trick that insurance companies use to avoid coughing up the settlement too soon is continuing to drag out the claims process by asking numerous questions. As the homeowner, you should know that some level of questioning is normal and expected, but to an extent. If you start to receive questions that have already been asked previously or others that are veering off the course of what seems normal, this is a major cause for concern.
When it gets to the point that you are being bombarded with questions and forced to provide answers but nothing additional is given to you in return, you should be worried about your claim going wrong.
3. Notification of an Investigation
When you file a claim with your home insurance company, you will receive notification that your case is being worked on by their specialists. As mentioned earlier, they will typically have a time frame of about two weeks to send you this notice. In this aspect, the normal term to look for is “processed”, or something similar.
This essentially means that the insurance company is going forth with standard procedures to look over your claim, resulting in a final answer regarding a monetary settlement. This includes reviewing your inquiry and any documentation of evidence that you have provided them with to streamline the process. When you are presented with these types of statements, there is no need to be anxious about the outcome of your claim.
As the homeowner, you should begin to worry about the outcome of your claim when you hear alternative terms from the insurance company. If you receive notification that there is any kind of investigation going on, you should immediately know that something is wrong. When an insurance company goes through the standard claims process, they will not use more harsh terms like “investigated”. In general, they will not let you know that your claim is in the investigation stage unless they have specifically escalated it. This will mean that there is something deeper going on, in their eyes, that they are trying to look into.
On your end, this does not necessarily mean that you have done something wrong, but it is cause for concern in relation to your final settlement. The insurance company investigating your claim can only mean that they are looking for something to fault you with that will ultimately benefit their pockets. This can result in a number of things going awry, from a lower settlement to nothing at all.
4. Recording Requests
Going through the home insurance claims process on your own for the first time can be a very daunting task. Since the insurance industry contains a lot of loopholes that require experience to navigate, it is easy for the insurance company to throw you off your game. While you most likely won’t have time to gain an in-depth education on insurance claims in the event of a natural disaster hitting your home, you can make yourself aware of one of the oldest tricks that big companies deploy onto naive homeowners.
If a representative from the insurance company ever asks you for any kind of recorded statement, you should immediately deny it. Even though this might sound like something that is required, it is in no way a standard procedure throughout the claims process. The only thing that can come from giving a recorded statement to an insurance company is getting the complete short end of the stick when it all comes to a close. When filing a claim for the first time, you must keep in mind that insurance companies know their way around the process, and will use it to their full advantage, not yours.
Recorded statements, both on the phone and in person, will consist of the insurance company asking you questions about the event that happened to your home and the general damages that occurred as a result. More often than not, they will ask specific questions to where they can use your expected answers against you as evidence. When you willingly participate, you will be giving them exactly what they need to give you a lower settlement or deny your claim entirely.
This is a way for these companies to weed out homeowners that will fall for the trap, allowing them to toss out a large portion of the claims they have in their queue. When you educate yourself on this common scheme, you won’t become a victim of either of these home insurance claim mess-ups.
5. No Communication
Throughout the home insurance claims process, extended timelines and gaps in communication with your insurance company are one thing. On the other hand, you might experience no communication at all after filing your claim. As previously explained, there are certain laws and limitations that aim to correct this behavior on the insurance company’s end. However, this does not necessarily mean that all of these corporations will abide by these rules.
This is a tactic that is used to deny the claim fully and not pay the settlement amount to the homeowner at all. While going through these procedures, it is important not to put your full trust in your insurer. Instead, you should be watching them closely to make sure that they don’t take advantage of you and push your claim to the side.
The best way to avoid a situation like this is to stay on top of the timelines after you file the claim initially. Do some research on what these specific laws are in your state of residence, and don’t be afraid to follow up when deadlines pass.
How To Avoid Insurance Claim Problems
As you can see, there are a mountain of problems that can come from the home insurance claims process. Although these companies are regarded as an asset to homeowners in their time of need, the script can be quickly switched once you embark on this journey all on your own.
With all of the technicalities that are present within the claims process that you will not be expected to be aware of, it will be easy for your insurance company to run circles around you, leaving you in the dust after a natural disaster. In light of an event that destroys your home and assets, it is important to have someone on your side who knows the ins and outs of the business. This can be easily achieved by hiring a public adjuster.
Public adjusters are about as useful as a good attorney when it comes to navigating the murky insurance claims process. They know the ins and outs of the insurance claims process and will represent you throughout the entire duration of the claims process. The partnership will begin as soon as the damages are discovered, and your adjuster will fight for you after properly assessing the scene.
Not only will your public adjuster speak for you and help you navigate the claims process hands-free, but they will also be able to open up the possibility of gaining an even larger settlement. As a homeowner who is inexperienced in the insurance field, it is increasingly beneficial to seek help from someone who can see the loopholes in your path to recovering home damages. With a public adjuster at your side, you will be able to get a leg up on the insurance company, instead of the other way around, while attempting to rebuild your life as it was before the disaster occurred.
If you’re a homeowner and you have home damage from a natural disaster or another incident, you have options. Reach out to Bulldog Adjusters. We’re the largest growing public adjuster firm in the United States and we pride ourselves on the ability to meet homeowners’ needs and get them the largest possible settlement from their insurance company!