1. Gather as much info as possible
Your first step should be to go back to your homeowners insurance policy and make sure it really does cover what you’re asking for.
Most standard policies don’t cover earthquakes, floods or sewer backup, for example. You may find other named exclusions or hard limits on the amount the company is obliged to pay.
Once you’re confident that you’re not getting what you’re owed, it’s time to call your insurer to ask why.
You may not reach the specific claims adjuster who examined your case, but insist on hearing their justification. That information is essential if you’re going to know how to proceed.
This step can be rough, depending on the quality of your insurer’s customer service. Speaking in a TV interview before the verdict, Doherty says she was passed around from claims adjuster to adjuster before finally getting fed up.
If you’re unhappy with the quality of the customer service you’re getting, that’s one more reason to find a better insurance company.
2. Bolster your original claim
Hopefully the call with your insurer provided some insight into what was lacking in your application. Now it’s time to find ways to strengthen it.
- Do you have any other photos, videos or witness statements to add?
- Have you shown that you did everything you could to prevent or mitigate the damage?
- Can you call around to stores or check your email to track down any missing receipts?
- Did you include enough detail in your contractor bids to show what it will take to fix the damage?
The next option will cost you some money but it may be worth it.
Consider hiring a third-party appraiser or public insurance adjuster. An independent expert may tell you that your insurer was right all along — or they could act as a powerful ally when it comes time to contest .
You can expect to spend between $200 and $500 for this service, according to LendingTree's ValuePenguin site.
3. Ask your insurer to reconsider
Sometimes you can get the results you want by giving your insurance company another chance to make it right.
According to some critics, it’s common for insurance companies to make a lowball offer at first in order to make subsequent offers seem more attractive. Enter into negotiations with a clear idea of how much you’re looking for, regardless of whether their offer improves.
Your insurer may have a formal appeals process that you’ll have to follow. Or you may be able to ask for a review of your adjuster’s assessment or a redo from another adjuster.
Either way, this is when you can bring all of the extra information you’ve gathered to bear.
No matter what happens and who you talk to, take notes. Write down names and dates and ask for information in writing. You want to document as much as you can in case you don’t get your issues resolved at this stage.
4. Seek a company settlement
If you reach an impasse, your insurance company may agree to outsource the decision.
Some companies use a method called arbitration. A neutral third party will hear from both sides and make a final decision.
Another possibility is that you and your insurance company will both hire independent appraisers, and together those appraisers will select a mediator. A final decision is reached when two of the three agree.
A word of caution: Before you agree to any type of settlement, check to see whether the decision is legally binding.
You’d be obliged to accept the outcome — even if you don’t like it — and that would present a problem if you were planning to take other action.
5. Complain to your state
Since insurance is regulated, consumers can go to their state government for help.
Your state’s website is the best place to start. Check to see which office handles insurance complaints, then see how you can file one.
Some states prefer online applications. You might be able to attach your supporting documents when you first file, and be sure to include the result you want in your complaint.
If the state agrees that your insurer is acting in bad faith, it will contact the company to resolve the issue. The government will act as an intermediary between you and the insurer.
That could be the end of the problem — or it may encourage you to take the last option available.
6. Take your fight to court
Hiring a lawyer can be very expensive, and the full cost may not be immediately obvious when you start the process.
You’ll only want to consider going down this path if the difference between the payout you want and the payout you were offered is substantial — like in Doherty’s case.
Her story shows that it can indeed pay to fight for your interests. The victory paid for her damaged home, her attorney’s fees and the emotional distress she suffered during the process.
Just know that victory is no guarantee.
Consider switching insurance providers
No matter how civil your insurer has been throughout the process, there’s a good chance your dispute will sour your relationship.
After all, it’s hard to trust that your insurer will protect you from the next disaster when you’ve had to fight them over this one.
The good news is that there’s no requirement that you stick with your current insurer until the claim is over — and looking around for a new insurer is also an opportunity to uncover significant savings.
Having a home insurance claim on file will likely cause your premiums to increase, but not every company will treat you as harshly. The same goes for all of the other factors that can influence your rates, like your marital status and credit score.
So if you haven’t shopped around for quotes in a while, you could be overpaying for your coverage by $1,000 a year or more. You may be able to use the same strategy to save a similar amount on car insurance, too.
And don’t forget to investigate the generous subsidies available right now on the health insurance marketplace, if you haven’t done so already. Following the American Rescue Plan earlier this year, about half of new enrollees on HealthCare.gov snagged a monthly premium of $10 or less.