Disputing a Home Insurance Claim Denial or Settlement Offer

If you've filed a homeowners insurance claim and believe it was wrongfully denied or offered an unfairly low payout, you still have options. Overall, your strategy should be to present additional evidence for your case and escalate the dispute in stages, but only until the costs outweigh the potential benefits.

Step 1: Contact your insurance agent or company again

Before contacting your insurance agent or home insurance company to dispute a claim, you should go over the original claim. Consider whether you can improve the quality of evidence demonstrating damage or loss, as this can have a significant impact on the settlement.

• For example, you should have more photos prepared to support your claim for the amount you claimed. If you didn't include them in your initial claim, you should organize photos, videos, repair estimates, and item receipts before reconnecting with your agent or company.

After reviewing your initial claim paperwork, contact your agent or the company's claims department to discuss the estimate you received from the adjuster. Remember that the estimate was calculated by a company adjuster, not your agent or the person you'll speak with.

Inquire whether your claim can be reviewed again based on your new evidence, or whether the adjuster can reexamine the damaged or lost property. Mistakes happen, and it's possible that the adjuster calculated the estimate incorrectly. The company may re-evaluate it, but the settlement offer will not change. They may even refuse to have another adjuster assess your damage or loss. If this is the case, the next step is to get a third-party valuation.

Step 2: Consider an independent appraisal

Hiring your own appraiser or public insurance adjuster allows you to obtain an unbiased estimate for the damage you are attempting to repair. A private appraiser or adjuster costs between $200 and $500, depending on how far they are from your home. If the difference in the claim settlement is roughly equal to the cost of the independent appraisal, accepting the settlement may be more cost-effective.

A second professional opinion on the damages or loss will result in one of two outcomes. The new estimate will either confirm or undermine your insurance company's settlement offer. In the latter case, contact your insurance agent or claims department again and inform them of the independent estimate. You could even request to speak with a claims manager and have them evaluate your case.

Step 3: File a complaint and hire an attorney

Claim disputes rarely reach this stage. If you are unable to reach an agreement on a claim with your home insurance company after exhausting all other options, you have two options: file a complaint with the state or seek legal remedy through an attorney.

Policyholders can report mistreatment or unethical business practices to their state insurance department. The department should investigate your claim and advise you on the next steps to take. They will usually assess whether your complaint is justified and, if so, will contact your insurance provider through its own channels to encourage a more equitable resolution.

The state insurance department may advise you to hire an attorney, but it will not pay for it. As a result, it is critical to weigh the costs and potential benefits of legal action. You must find an attorney and pay a consultation fee as well as any additional fees. If you decide to hire an attorney, make sure you have a fee structure in place.

Note on disputing natural disaster claims

Natural disaster claims are typically handled in the same manner as any other claim — as quickly and accurately as possible. However, disasters frequently result in a large number of concurrent claims, making it difficult for insurers to respond in a timely manner.

As a result, state insurance departments typically set specific dates for insurance companies to acknowledge the filing of a claim. Companies typically have 15 days to acknowledge receipt of a claim, but this is frequently extended.

A higher volume of claims may also require insurance adjusters to make educated guesses in each case. If this occurs, the policyholder should be notified, and a second visit from an adjuster should be expected at a later date. If possible, schedule the second appointment during the first.