If you make the choice to pay for homeowner’s insurance, you expect that you will have certain rights. After all, insurance is an agreement that, for a certain amount of premiums paid, and for a certain deductible, you will receive coverage if something happens to you.
So, if the worst happens to you, and your home sustains damage in some way, what are your rights as far as your interaction with your insurance company is? Here are a few rights that you generally have concerning dealings with your insurance company.
THEY CANNOT UNREASONABLY DEFER OR DELAY PAYING A CLAIM
You are paying premiums in order to make sure that when something goes wrong that your insurance company covers, they will pay the portion that the contract says they must, and to do so in a timely fashion. If they don’t pay the money that they’re responsible for, someone is missing out.
Deferred payment is a ‘buy now, pay later’ situation. Deferring payments is basically the same as delaying payments, and deferring payments can cause issues, especially if the homeowner has had to pay out of pocket.
If your homeowner’s insurance delays paying a valid claim, you may have to hire a lawyer and litigate. If it’s found that they were unreasonably deferring payment on a valid claim in court, the court may even hold the company accountable for more than the cost of paying the claim in the first place.
THEY CANNOT UNREASONABLY DENY A CLAIM
Your policy will delineate what is it covers, and to what extent it covers it. If something happens, and your policy covers it, the insurance company cannot unreasonably deny a claim. They have to provide the coverage that you are paying for; they’re obligated to do so, in fact. If they refuse to pay on a reasonable claim that your policy covers, you will have to take them to court, but once again, they court may hold them liable for more than the cost of the claim.
YOU HAVE THE RIGHT TO APPOINT A REPRESENTATIVE
When dealing with your insurance company during the claims process, you can appoint someone to act as your representative. Usually, a homeowner will appoint their contractor as a representative on the claim, so that the contractor can more easily work out the price for the work with the insurance adjuster. This can also help if the insurance company is saying that they will cover the cost of replacement, but they’re basing that on an unrealistic price for replacement. If the amount that they’re attempting to settle the claim for is too low for any contractor to do the work, having the contractor act as a representative can help to assure they get a more realistic price, and streamline the process.
YOU HAVE THE RIGHT TO A SECOND INSPECTION
If the insurance company sends out an inspector, an adjuster, or some other representative, and they either deny the claim or offer an unrealistic view of how much work it will need to fix the damage, you have the right to request a second inspection from a different inspector.
YOU HAVE THE RIGHT TO AN APPRAISAL
If the insurance company and your contractor cannot come to an agreement on a reasonable price for settling the claim and for performing the repairs, or if they’re denying it when such coverage is in your policy, you have the right to request an appraisal. To do this, you must send in a formal letter, requesting that the appraisal process begin.
When the appraisal process begins, the insurance company will send out their adjuster, typically a third party. You can even hire someone on your own, so long as they don’t have a vested interest in the outcome of the claim. Sometimes, that will be a public adjuster. In some cases, a contractor from another unrelated firm will even come out to perform the appraisal.
If at this point, the appraiser comes out and there’s an agreement about the figure for settling the claim, then that number becomes binding. On the other hand, if they can’t agree, they bring in an umpire.
The parties will choose from a roster of qualified umpires, and agreed upon by both appraisers. The homeowner and the insurance company will split the umpire’s fees, which will generally be between 500 and 1000 dollars. The umpire comes out to the site of the damage, performs an inspection, hears what the contractor and the insurance representative have to say, and then makes a decision, which then becomes binding.
These are a few of the rights that the hold of a homeowner’s insurance policy generally has. To learn more, review your policy or talk to a lawyer, a home repair contractor that usually offers representation, or even to an insurance broker.
