After a hurricane, storm or other disaster, you hoped that your property insurance company would honor your claim and pay for your damages. After all, you purchased homeowners insurance with the expectation that, if a catastrophic loss ever occurred, your insurance company would provide for the repair of your property back to its pre-loss condition. Unfortunately, as many homeowners are now experiencing after Hurricane Irma, property insurance companies do not always live up to policyholders’ expectations.
During the initial inspection, the insurance company’s adjuster may have even indicated to you that your damages would be covered and that the insurance company would “take care of everything”. Then, after not hearing from the adjuster for a few weeks, you received a check in the mail for not only substantially less than you hoped for, but nowhere near enough to repair all of your damages. What happened?
Denying Claims Based On Pre-Existing Damage Defense Or Other Exclusions
The insurance company’s first weapon to underpay your claim is the denial of all or a large portion of your damages. This denial could be a claim that your damage pre-existed the insurance policy period, that your damage was not the result of the subject weather event, that your damage is specifically excluded under the policy, or any other reason manufactured by the insurance company.
Limiting Scope of Repairs and Undervaluing Value of Damages
If the insurance company cannot find a way to deny your claim, they will then try to underpay or undervalue the cost of repairing your damage. The insurance company will attempt to limit the scope of your repairs (the actual items to be repaired) and/or limit the actual cost allowed for such repairs. Insurance companies have created quite a cottage industry for contractors, adjusters, and other “experts” who are retained specifically for the purpose of minimizing the valuation of your damage claim.
Aggressively Depreciating the Value of Your Property
The insurance company’s next weapon is the application of depreciation. Pursuant to Florida law, the insurance company only has to pay the Actual Cash Value of your damages after a loss. In short, Actual Cash Value (ACV) is the “garage sale value” of your items, and not the current cost to repair or replace same. It is only after you totally repair or replace the damaged items that the insurance company has the obligation to pay the Replacement Cost Value (RCV) of your damaged items. The insurance company takes the Replacement Cost Value of your damaged property, and then subtracts an estimated “depreciation” amount in order to get the Actual Cash Value which it pays to you. As you can imagine, this process is replete with subjective calculations (who says what the current value of my two year old TV is? How is my roof depreciated by 40% in four years?) and the subject of many disputes.
Applying High Hurricane Deductibles
Perhaps the biggest – or at least, the most apparent – slap in the face by the insurance company is the application of a deductible to your loss payment. If your loss is not the result of a hurricane or named storm, the deductible may only be $1,000.00 or so, but if your damage is the result of a hurricane or named storm, then your deductible may be substantially higher. We have written about the application of hurricane deductibles in a previous post, so we will ease the pain by not repeating that narrative here. Needless to say, these deductibles can come as quite a shock – especially when the insurance company’s calculation of your damages somehow “magically” comes in at just below the amount of your deductible.
The presentation of an insurance claim for property damage from a hurricane or other type of loss can be a minefield. Without the help of an experienced lawyer or other professional, you run the risk of having your property claim severely underpaid or even outright denied. If you believe you are not being treated fairly by your insurance company, or if you just have questions regarding the process, please feel free to contact our office and we will do our best to assist you.