The destruction of property following a natural or man-made disaster can be financially and emotionally devastating. Property owners, who in some cases have faithfully paid years of premiums, count on their insurance companies to compensate them after these losses. Many of these insurers often do not live up to their promises. Bad faith insurance practices can cheat homeowners, businesses, and investors out of the payouts they deserve under their policies.
That’s when you need dedicated and experienced legal counsel. Palumbo Law is here to make sure insurance companies pay what they owe, when they owe it, in the event of a property loss claim.
The Complexities Of Property Loss And Property Damage
Catastrophes come in many forms, both natural and man-made. These are typically unavoidable losses outside of the property owner’s control. Homeowners, businesses, and investors purchase insurance to protect their properties against the following losses (among others):
- Fire damage
- Water and mold damage
- Wind damage
- Storm damage
- Ice and snow damage
- Smoke and soot damage
However, not all causes of property loss and damage are clear and obvious. A storm, for example, could cause both flooding (which is probably not covered by the insurance policy) and wind damage to a structure. In other cases, one type of loss may precede another. For instance, a fire in one part of a building might be extinguished with sprinklers. If the water is not completely removed, however, it can cause mold to develop in other parts of the building.
Mold, in particular, is a gradual form of property damage that is nowhere near as rapid or dramatic as fire or wind. But the cause of mold itself may or may not be covered by the policy. In other words, whether the policy covers mold will depend largely on how it got there. Some causes, like owner negligence, are excluded. Others, like the firefighting example above, may be covered.
Complexities like these allow insurance companies to exploit ambiguous policy terms or blame owners for things that should be covered. This leads to the three main complaints that policyholders have against their property insurers: denied payment, delayed payment, and underpayment.
Why These Claims Are Denied, Delayed, And Underpaid
Insurance companies can deny property loss and damage claims for valid or invalid reasons. The stated reason itself may technically be valid but might not apply to your case. For example, missing a premium payment is actually grounds for losing coverage, but that doesn’t mean you really missed a payment.
Consider these common reasons for denying, delaying, or underpaying a claim:
Exclusions. As mentioned above, certain types of damage are excluded from property loss and damage coverage. Insurance companies are eager to find any reason they can to deny a claim or misuse vague terms to “create” an exclusion that isn’t really there. So make sure you’ve thoroughly documented the loss and speak with an attorney if the insurer refuses to pay.
Missed premium payment. This is a common reason to deny claims. Not paying your premiums will cause the policy to lapse and give the insurer an easy reason to turn you down. However, just because the insurance company says you missed a payment doesn’t mean you did. Always keep confirmation numbers and other proof of your payments.
Not disclosing certain information. At the time you acquired your policy, you had to provide certain details about your property to the insurer. You must also provide accurate information concerning the nature of a claimed loss. Misrepresentation of either can cause policy cancellation or a claim denial (or both). Be sure everything you provide to your insurer is truthful.
Missed filing deadline. Even if you have a valid claim, you must file it within a certain period of time to be covered. Insurers will take advantage of any missed deadline or falsely state you did not file on time. It’s important to timely file your claim and obtain confirmation of when you did.
Insufficient documentation of the damage. Insurance companies love to downplay the extent of the damage to their policyholders’ property. This is done solely to pay you less than what the claim is worth. It is therefore imperative for you to document how much you lost. Take pictures, record video, and document everything spent related to the damage.
Failure to mitigate. Your policy likely has a mitigation clause that requires you to take steps to prevent further damage to the property until repairs can be made. Not mitigating can cause the insurance company to offer you less than the claim is worth. You should document everything you’ve done to prevent further damage.
Normal wear and tear and neglect. You are required to maintain your property and keep it in good condition. Insurers look for evidence that their policyholders disregarded this responsibility, or they attribute actual damage that should be covered to neglect or wear and tear. This is another area in which fully documenting the loss is essential.
Prolonged investigations and other delays. The payout on your claim may be unnecessarily delayed due to what the insurance company says is a need to further investigate the incident. Communication problems and other delays can also draw out the claims process. Meanwhile, the insurer may offer you a settlement that is far less than what you deserve, hoping you accept the money to avoid spending more time on the claim. Don’t fall victim to this tactic.
Contact Our Rhode Island Insurance And Property Loss Attorney
Remember, the above examples may be legitimate reasons for an insurance company to deny, delay, or pay less on a claim than you expect. However, for many property owners, they are simply baseless excuses to not pay. If your insurer is acting in bad faith concerning your Rhode Island property loss or damage claim, reach out to Palumbo Law today.