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Large homeowners insurance claims are increasingly hard to manage

On Behalf of | Nov 3, 2023 | Insurance Law |

Homeowners insurance is necessary when people have a mortgage. It is also a form of common-sense protection against the consequences of crime, inclement weather and personal liability. What people pay for insurance seems to increase a little every year even when their coverage remains static. In recent years, however, homeowners insurance policies have started to increase in cost quite dramatically.

There are multiple reasons for the increase in costs. Rebuild expenses have been on the rise due to increased material costs and inflation. Additionally, in places like Florida, a series of back-to-back devastating natural disasters have cut into insurance company profits.

As a result of these challenges, insurers are charging more than ever for the same coverage while simultaneously being more conservative about paying about the claims that customers file. To add to this set of challenges, homeowners are now often finding themselves facing more pushback than ever when they need help after a storm or other incident leaves their property damaged.

Companies often try to manipulate policyholders

It is common practice for insurance companies to try to manipulate situations to their own benefit. For example, they will gather years of information about individual consumers and then try to leverage that data when negotiating a claim with a policyholder.

They may know that some people have lower household incomes and will therefore try to get them to accept inappropriately low settlements that leave them with major uncovered expenses. Other times, insurance companies know that policyholders can pay to repair damages on their own despite having a policy that should cover those costs. In such scenarios, the insurance company might drag out the process so long that a frustrated homeowner decides to pay for their own roof repairs, for example.

These tactics are technically examples of bad faith insurance practices. The company does not adhere to its own policy in good faith but rather seeks to deny policyholders the coverage that they have purchased and paid for, often for multiple years without any significant claims. Unfortunately, homeowners are often unaware of how manipulative insurance providers can be and also their right to fight back against those underhanded tactics.

Seeking legal guidance can be invaluable when someone is facing a sizable insurance claim and they feel worried that a company will not provide the coverage it should, given the scope of the damage that occurred. Managing claims can be tough but those with coverage can better ensure that they receive what they’re owed by seeking support throughout the claims process.