Unmasking Homeowners Unfair Claims Settlement Practices in Florida
Unfair claims settlement practices refer to tactics where an insurance company improperly avoids or reduces a claim. Tragically, this happens quite frequently, using a variety of methods to handle the settlement of claims unfairly.
It's a common misconception that an insurance company is primarily dedicated to protecting its customers' interests. While we'd like to believe this, the stark reality is that an insurance company is a for-profit entity. Therefore, its primary loyalty often lies in protecting its own financial bottom line.
If you suspect your insurance company has engaged in unfair claims settlement practices, such as significantly underpaying your claim or outright denying it, it's essential that you advocate for your rights. Failing to do so may result in becoming a victim of an unfair settlement.
In such situations, consider enlisting the help of a Florida public adjuster. A public adjuster can provide a valuable second opinion, particularly if you believe your insurance company's assessment of damages is lower than it should be.
Public adjusters can take charge of your insurance claim, handling everything from the initial filing to final negotiations. Their skills are extensive, and they are adept at assisting with negotiations, conducting appraisals, and deciphering the complexities of your insurance policy.
In cases where your insurance claim has been denied or if you believe it has been underpaid, a public adjuster can review your case, identify potential issues, and help appeal the decision or negotiate for a higher settlement.
Additionally, a public adjuster can guide you toward the right attorney who can file a Civil Remedy Notice with the Department of Financial Services. It is a legal document that serves as a complaint against the insurance company for violating Florida Statutes in place to protect the consumer. This is a significant step in capturing your insurance company's attention.
If you're faced with clear examples of unfair claims settlement practices, a Florida public adjuster specializing in property claims can be a crucial asset. If you're grappling with these issues, don't hesitate to reach out to us for more information. Remember, it's your right to obtain a fair settlement - don't let insurance companies shortchange you. Stand up for your rights today!
Unfair Compensation Examples
Hurricane Claims: In the aftermath of Hurricane Irma in 2017, numerous Florida homeowners experienced a phenomenon known as "lowballing." This is when insurance companies intentionally undervalue the cost of damages, leading to inadequate compensation. For instance, a homeowner might have suffered significant structural damage, requiring extensive repairs or even full property reconstruction. However, the insurance company may have only provided a payment sufficient to cover minor repairs, ignoring the true scale of the damage. Read more about Hurricane Ian's claims and compensation status as of June 2023.
Water Damage Claims: It's common for insurance companies to dismiss claims related to water damage, citing exclusions or limitations within policies. A specific case may involve a Florida homeowner facing substantial water damage from a burst pipe. Despite having an insurance policy that should cover such an incident, the insurer could argue that the damage was a result of negligence or lack of maintenance, thus unfairly denying the claim.
Mold Damage Claims: Mold damage is often a byproduct of water damage and can be extremely hazardous to health. However, insurers frequently downplay its severity or outright deny these claims. For example, a homeowner discovered severe mold growth in their house following a water leak. While the insurance policy includes coverage for water damage and limited coverage for mold damage, the insurers offer an unreasonably small amount to cover the loss and denies to cover the costs of professional mold removal and remediation.
Roof Leak and Replacement Claims: Roofs can suffer immense damage due to various factors, such as hurricanes, windstorms, hail, and lightning. Insurers, however, may reject claims for roof repairs or replacements based on the supposed age of the roof or alleged lack of proper maintenance. A Florida homeowner might have filed a claim for a roof replacement after a severe storm, only for the insurance company to assert that the damage was pre-existing or resulted from the homeowner's failure to maintain the roof properly.
In each of these examples, the insurer has unfairly settled the claim, either by underpaying or denying it, leaving the policyholder to bear the financial burden of repair or replacement. This highlights the necessity of involving a public adjuster to ensure fair evaluation and compensation.
What is a Settlement Claim?
Once a claim is filed, the insurance company will assess the situation to determine the extent of the damage and the corresponding payout, according to the coverage outlined in the insurance policy. This process involves various steps, such as an inspection of the property damage, reviewing the policyholder's inventory of damaged items, and comparing the situation to the terms and coverage of the insurance policy.
The term "settlement" refers to the agreed-upon amount the insurance company will pay the policyholder to cover the damages. This settlement intends to help the policyholder restore their property to its pre-loss condition. It is important to note that this term refers to the final agreed payment of the claim. Many times it is confused with an undisputed payment of the claim. In addition, the insurance adjusters might even say your claim was settled when in reality, the claim was just initially paid.
In property claims, an initial payment does NOT constitute a settlement payment. Usually, settlement payments come also with a document called a “settlement agreement or release”, in which the insured gives up any rights under the policy to pursue the claim legally and releases the insurance company of any further liability. We do not recommend signing a release unless a Licensed Public Adjuster or Attorney has reviewed this legal document.
In some cases, policyholders may find that the payment offered by the insurance company is not adequate or fair. This is where a public adjuster can step in. A public adjuster is a licensed professional who advocates for the policyholder in appraising and negotiating a claim. They work on behalf of the policyholder, not the insurance company, to ensure that the final settlement is fair and that the policyholder gets the compensation they are entitled to under their insurance policy.
Public adjusters are particularly beneficial when policyholders face complex claims or when they feel the insurance company's offer does not adequately cover their losses. In addition, Public Adjusters are very helpful with people who do not speak the language, do not have the time to dedicate to following up with the insurance, and/or are not knowledgeable in construction. By leveraging their knowledge of insurance policies and their experience in dealing with insurance companies, public adjusters can help policyholders receive a more favorable settlement.
What are the Four Classifications of Unfair Claims Settlement Practices
Misrepresentation of Policy Provisions: This occurs when an insurance company misinterprets or misrepresents the language of an insurance policy to the policyholder. They might downplay or omit important details about the coverage or use complex jargon to confuse the policyholder. For example, an insurer might wrongly assert that a homeowner's insurance policy doesn't cover water damage, even though it does.
Delay in Claim Processing: Insurance companies are obligated to respond and resolve claims within a reasonable timeframe. However, some insurers might purposely delay the process by continually asking for additional information, transferring the case between different adjusters, or delaying inspections. This strategy can pressure the policyholder to accept a lower payment due to financial strain or frustration with the process.
Lowballing: This is when an insurer offers a payment significantly lower than what the claim is worth, hoping the policyholder will accept the low amount to avoid the hassle of negotiations or legal proceedings. This tactic is often used in the aftermath of large-scale disasters, such as hurricanes, when homeowners are desperate to start repairs and may not fully understand the extent of their damages.
Denial of Claim Without Investigation: In some instances, an insurance company might deny a claim outright without conducting a thorough investigation. This practice is particularly egregious, dismissing the policyholder's claim without adequate due diligence. For example, an insurance company might deny a claim related to roof damage without even inspecting the roof.
A Florida public adjuster can provide critical support in these situations. They can identify and counter these unfair practices, advocating for a fair and just settlement for the policyholder. It's essential to remember that homeowners have a right to a fair claim process and settlement, and public adjusters are there to help ensure that right is upheld.
Unfair Claims Settlement Practices Act Florida
The Unfair Claims Settlement Practices Act in Florida is a set of regulations designed to protect insurance policyholders from unfair or deceptive practices by insurance companies. The Act outlines specific behaviors that are considered illegal when it comes to handling insurance claims.
Under the Florida Statutes (Section 626.9541), unfair claims settlement practices include, but are not limited to:
Misrepresenting relevant facts or policy provisions related to coverages at issue.
Failing to acknowledge and act promptly upon communications concerning claims.
Failing to adopt and implement reasonable standards for the prompt investigation and settlement of claims.
Refusing to pay claims without conducting a reasonable investigation.
Failing to affirm or deny full or partial coverage of claims promptly.
Making claims payments without including a statement of coverage under which payments are made.
These are just a few examples of the prohibited practices, and any insurer found to be in violation of these rules can face penalties, including fines and license suspension or revocation.
These laws allow policyholders to hold insurance companies accountable for their actions and ensure they're treated fairly during the claims process. If a policyholder believes that an insurance company is violating the Unfair Claims Settlement Practices Act, they can file a complaint with the Florida Department of Financial Services and also consider hiring a public adjuster and/or an attorney to represent their interests. Learn more about insights from clients on the Florida Public Adjusters FAQs page.
A&H Public Adjusters Corp is a Florida Public Adjuster
If you believe you're a victim of unfair claims settlement practices and feel that your insurance company is not providing the compensation you deserve, it's essential to take action. A Florida public adjuster can be your advocate, ensuring you're treated fairly and that your rights are upheld.
Our team specializes in navigating complex property claims and is dedicated to preventing insurance companies from unjustly minimizing or denying your claim.
Remember, it's your right to obtain a fair settlement in line with your policy's coverage. Don't let unfair claims settlement practices leave you at a disadvantage. Stand up for your rights, and reach out to us for the support you need today! We're here to help guide you toward a fair and just settlement.