The Insurance Claims Process for Property DamageBefore negotiating a property damage claim, you should understand how the claims process works before negotiating a property damage claim. The basic steps in an insurance claim for property damage include:
- You submit your claim. The claims process begins when you file a property damage claim with your homeowner's insurance company or commercial property insurer. Your insurance policy likely says you must submit a claim within a certain time after the property damage has occurred. If you don't, they will not pay out your claim. Be sure to file a claim quickly, so you don't have to pay for the full repair cost yourself.
- The insurance company sends a claims adjuster. No matter how well you documented the damage to your property, the insurance company will send someone to look over the damage themselves. The adjuster will also determine who, if anyone, they believe is responsible for the damage. The insurer wants to ascertain that you have not inflated your claim's value. Purposefully inflating the extent of the damage is insurance fraud. If you disagree with the adjuster's assessment of liability and property damage, you will have to prove the adjuster wrong.
- The insurance company makes their initial offer. After the adjuster finishes their investigation and makes their report to the insurance company, the insurer will make an initial offer. The offer's value will reflect the extent of the damage, whether the fault for any of the damage is yours, and what the insurance company thinks they can get away with. The insurance company's initial offer will likely be lower than what they're actually willing to pay, and you should not accept any offer without talking to a lawyer first.
- Negotiations begin. If you and your lawyer disagree with the amount of the insurance company's initial offer, your lawyer can negotiate with the insurance company for a better one. You will need strong evidence to back up your claim, though, and the insurance company will likely push back because they want to pay as little as possible. You have a better chance of recovering more money from your insurance company when you work with a seasoned property damage lawyer.
- You reach a settlement or take your case to trial. Your case will end in one of two ways once settlement negotiations begin. If you and the insurance company can agree, you will accept their offer, you'll sign a settlement and release agreement or similar document, and they will pay your claim. If the insurance company refuses to negotiate in good faith, you might need to take them to court to make them pay up. Trials are risky and expensive, so talk to a lawyer before you file any lawsuits or take other aggressive steps.
Negotiating a Property Damage Insurance ClaimYou can improve your chances of a fair settlement when negotiating a property damage insurance claim. You can obtain the best results when you use these strategies:
- Review your insurance policy. Details matter in property damage insurance claims. You can be sure your insurance company knows your policy inside and out, and they will not hesitate to point out specific clauses to justify their offer's value. When you review your insurance policy in detail (or have a lawyer do so for you), you can level the playing field and quote the details of your policy right back at them. For example, your policy might include a provision that pays you if you can't use your home or business due to damage. Still, the insurance company might not include this coverage in your settlement unless you make sure they know you're aware and point it out to them.
- Know your rights. Policyholder ignorance is a tool insurance companies use in settlement negotiations, as they assume policyholders don't know all their rights. But if you assert your rights, you can give yourself a big advantage in negotiations. For instance, you have the right to refuse an insurance company's first offer if you believe it is unfair. They may tell you that the first offer is their only offer, but as long as you meet your policy's terms, you have the right to negotiate a better deal. You also have the right to hire a loss assessor to review your property damage and see if their assessment matches the insurance adjuster's assessment. If your assessor's evaluation is larger than the insurance company's, you could use the assessor's report to justify requesting additional money for your claim.
- Keep records of the negotiations. Settlement negotiations with an insurance company can take months, and a lot can happen during that time. Protect yourself by keeping written records of settlement offers and other negotiation details in case the insurance company tries to renege on an offer or otherwise acts in bad faith. If you do not want to bother with written records, you can record your phone conversations, but you need to let the insurance adjuster know they are being recorded. Once you receive an acceptable offer, ensure the insurance company's verbal agreement matches your notes. If the offers don't match, say so. Show the adjuster your proof, and claim the offer you both agreed to.
- Stay calm and be honest. Negotiations with an insurance company can be immensely frustrating, especially if they go on for months. However, you cannot let your anger get the better of you. If you blow up at an insurance adjuster, they are unlikely to make a better offer and might shut down negotiations entirely. On the other hand, common courtesy and politeness can go a long way with an adjuster. Similarly, be honest in all your dealings with the insurance company. If they suspect you are exaggerating the extent of the property damage, they may deny your claim, and you will end up with nothing. And if they believe you have intentionally tried to commit fraud, you could face criminal prosecution.
- Document everything. Insurance companies need hard evidence when assessing your claim's value. You should fully document any repair estimates or other expenses. You can ask contractors to give you written repair estimates and then submit those estimates to the insurance company as part of your claim. Document all damaged items and take pictures of all the property damage in case the insurance adjuster missed something.
- Request an explanation of the settlement offer. You have the right to ask for an itemized list showing how the insurance adjuster calculated your claim's value. You can review the list to see if the adjuster missed anything or point out where an adjuster's estimates do not align with your estimated repair costs. The more concrete evidence you have supporting your claim, the more likely it is that you will get the settlement you want.
- Watch what you say. Don't speculate about what caused your property damage. You could inadvertently say something that gives the insurance company reason to deny or reduce the value of your claim. Be careful not to say anything that suggests you were at fault for the damage. If the insurance company can argue that you are responsible for the property damage, they won't have to pay your claim, and you will bear the full repair costs yourself.
- Be patient. Insurance companies often prolong the claims process for as long as possible to wear you down during negotiations. They are counting on you to lose patience and accept a lowball offer to wrap up the case and get at least some money for your losses. Do not fall into this trap. Insurance negotiations are frustrating when they drag on, but staying firm and negotiating a higher offer will leave you better off in the long run.
- Hire a lawyer. Hiring a property damage attorney is the simplest and best step you can take to give yourself an edge when negotiating with insurance companies. When you hire a lawyer, you show the insurance companies that you take your claim seriously and won't back down from a fight. A lawyer can use their knowledge and experience to review your policy and help you gather additional evidence to support your claim.
Before Submitting Your Property Damage ClaimYou can prevent hassles during your insurance company negotiations if you prepare well beforehand. You can do several things to help maximize your claim:
- Thoroughly document all the damage to your property. Take lots of pictures of all the property damage and keep the pictures in a safe, secure place. Do this as soon as possible after property damage occurs in case something else happens before the insurance adjuster has a chance to submit their assessment. If an additional event causes more damage and you try to file a second claim, the insurance company could suggest that you didn't have another event, but that you attempted to exaggerate your losses. You can prove that additional damage occurred if you have pictures of the original damage.
- Hire a loss assessor. Because insurance adjusters work for insurance companies, their goals are to minimize the value of your claim and keep more money in their company's pocket. If you hire a loss assessor to review the damage to your property, you can counter the adjuster's estimate if the initial offer is insufficient.
- File your claim quickly. If you wait too long to file your claim, you will not only drag out the claims process, but you could also jeopardize your chances of recovering any compensation at all. The insurance company could deny your claim outright If you miss the claim filing window your policy dictates.
- Do not talk about your claim in public. Don't post on social media about your claim or discuss it with friends and family. The insurance company can discover these conversations and use anything you said or posted as evidence against you in your claim. Do not publicly say anything about your claim until your case has concluded.
- Talk to a lawyer as soon as possible. The sooner you speak to a lawyer after an event or person damages your property, the easier the claims process will be and the more likely you are to receive a fair offer. Attorneys train to handle these disputes and defend your rights. You should hire a lawyer to act on your behalf to take advantage of their experience and knowledge.