Were Your Hurricane Harvey Insurance Claims Delayed, Denied, or Underpaid?
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Hurricanes can cause massive destruction, leading to thousands of claims worth billions of dollars. In some of these cases, the claims may be denied, delayed or even underpaid. The reasons for this problem are various, but it is important to understand the cause and how to properly file a claim so you can prevent the issue and receive the money to which you are entitled for the damage to your property.
Hurricane Harvey Strikes Texas
Hurricane Harvey developed in August 2017, making landfall in Texas on August 25th. Reaching status as a Category 4 hurricane, it left a massive amount of damage in its wake with estimations ranging from $70 billion to $200 billion. Much of this damage was done to private residences while commercial properties also took a major hit.
A state of emergency was declared for 30 counties with mandatory evacuations being issued for parts or all of seven counties. The state of emergency was expanded to include 20 more counties. After Harvey passed through, over 300,000 were left without electricity and 88 fatalities were listed. Over 1,000 homes were totally destroyed with another 17,000 sustaining major damage and 32,000 receiving minor damage. Almost 700 businesses received damage. Around 32,000 people were displaced from their homes, staying in shelters until they could find other housing.
Numerous organizations, both private and government agencies, have helped those who are in need throughout Texas. FEMA set up a station in Austin, Texas to help those who were displaced and to hand out supplies as well as helping with search and rescue and other issues. The American Red Cross, Salvation Army and other organizations have played a role in helping residents deal with the aftermath of the hurricane.
As homeowners returned to their properties and assessed the damage, many found they needed to file claims with their insurance companies. Filing a residential property claim is an important part of the recovery process. It is important to understand what needs to be done and the timeline in which to complete these tasks.
Many property owners wait until they are able to see their homes before contacting their insurance companies. This causes a delay in the claims process. What many fail to realize is the fact that they do not need to see their property to file the claim. All they need to know is they have suffered damage. They can begin the claims process by contacting their agent. Once they have returned to their home, they can provide an update on the severity of the damage.
In a major disaster like Hurricane Harvey, it often takes days or even weeks for an adjuster to see the property and move the claims process along. During that time, you may need to begin cleanup to prevent further damage and move back into your home if it is livable. You will want to document all of the damage and make sure you only work on cleaning up your home after you have contacted your insurance company.
The claims adjuster will need to see the home to appraise the damage. This will tell them how much the settlement offer should be so they can provide you with an amount that will return your home to its former condition as much as possible.
For the majority of claims, the process will move along smoothly with the homeowner receiving payment for their loss so they can make repairs and move forward with their life. However, there are instances when a claim may be denied, delayed or underpaid. In these situations, a homeowner needs to know what to do.
Tips for Filing Claims
One way to reduce the risk of having your claim denied or delayed is to ensure you file correctly. Here are some important tips to help you with filing a homeowner’s insurance claim.
- File your claim immediately – this helps prevent any questions as to when the damage occurred
- Read your insurance policy so you know what is covered and what limits you may have
- Document all damage with photos, videos and detailed notes
- Make temporary repairs to prevent further damage which may be caused by rain or standing water – keep receipts for all expenses for reimbursement
- Hire licensed professionals to do the work
- Do not sign any document unless you know what is being stated
- Ask questions to ensure you are following the correct procedure
- Hire your own appraiser to assess the damage and to know if you receive a fair offer from the insurance company
- Hire an attorney if you are concerned about how the claims process is progressing or if you feel you need assistance with your claim
If you follow the correct procedures for filing an insurance claim, you will be less likely to be denied. However, it can still happen and you should be prepared.
Legal Options for Claims Issues
There are times when you may be delayed in receiving payment or be underpaid what the damage is worth. You may even have a claim denied when it should have been paid. In these situations, you do have legal options to fight the insurance company or reach a resolution.
Invoke the Appraisal Process
Most insurance policies include an appraisal clause which entitles you to hire your own appraiser who will assess the value of the damage. You can invoke the appraisal clause and begin the process at any time. Some homeowners choose to do this from the beginning to avoid delays while others wait until they receive a settlement offer which they feel is not accurate.
With the appraisal process, the appraiser you hire and the one for the insurance company will meet and discuss their reports. They will meet with an arbitrator if they cannot agree on the amount. The arbitrator will choose one report, which will become the appraisal award. This option is often used when the amount of settlement is in dispute and resolves many issues.
You can also go through mediation to attempt to resolve any differences in payment or other issues with the claim. Many times, an attorney will represent the homeowner and a third party will act as mediator to try to resolve the differences.
This option may be beneficial for disagreements about the settlement offer or if part of the claim is denied. It can resolve some issues in the claims process and move it forward to the settlement.
In some cases, neither the appraisal process or mediation will resolve the dispute. In these situations, litigation may be necessary to allow the courts to decide. An attorney can build a case on your behalf and present it in court with evidence to back up your claims.
Litigation may be necessary if you cannot resolve the disagreement in the settlement offer or if the claim has been wrongfully denied. It can also help resolve any issues when the insurance company fails to act in good faith.
If you are not sure what your next step should be, you can often contact an attorney for a free consultation. They can advise you of your rights and provide legal counsel as to what options are available for your situation.
Reasons for Denials, Delays and Underpayments
There are many reasons why a claim would be denied or payment delayed or underpaid. It is helpful to know these reasons so you can prevent the problem in the first place or resolve it quickly so you can receive the necessary funds for your repairs.
Filing with the Wrong Insurance
Most standard homeowner’s insurance policies do not cover damage to a property caused by a hurricane. You must purchase hurricane coverage for those instances or flood insurance. However, many homeowners fail to realize this issue and file a claim with their insurance provider only to be denied.
One of the issues is they may not know what caused the damage to their home. If the damage was caused by flooding which affected the entire area and came into the house, they might need to file with their flood insurance company if they were insured. However, if the water damage was caused by wind that damaged the roof or windows, allowing water to come inside, the damage might be covered by a standard policy. Most homeowners’ policies cover wind damage.
Determining the exact cause of the damage is a key to successfully filing a claim. If you were displaced from your home, you may not be sure of the cause or you may just assume you should always file with your homeowners’ insurance. This is one reason hiring an appraiser can be a good idea and help your process move along more smoothly.
When you file with the wrong insurance company or file on an uncovered incident, your claim will be denied. This can cause delays and make it more stressful as you try to recover from the disaster.
Delays in Filing
While you would expect to file a claim immediately after a major disaster like Hurricane Harvey, there may be times when filing is delayed. If you live on the edge of the path of this storm, you may not have sustained obvious damage. Your area may have received moderate rainfall with no flooding and high or moderate winds.
If your home appears to look the same as it did before, you may think nothing of the event. However, you may begin to experience problems several months later when the roof starts to leak or other issues present themselves due to unseen damage from the storm.
In these cases, your insurance provider may deny the claim because it is not associated with a covered event. You may need an appraiser to determine the damage you are now experiencing is from the hurricane. To prevent this problem before it happens, you should do a visual inspection of your home, including the roof, as soon as the storm is over. If you see damaged or missing shingles or other evidence of damage from the hurricane, you can contact your insurance company right away.
Your payment may be delayed if the insurance company lacks information to move forward in the process. You should provide all information requested right away. This is one reason it is good to take photos of the damage since you will see the home before the adjuster can view it.
In a disaster situation like Hurricane Harvey, the insurance company will be given an extended timeline to process your claim because of the number of claims coming in and because of the difficulty of reaching some of these properties. However, you should follow up to make sure your claim is not forgotten in the process.
When a Claim is Underpaid
A claim may be underpaid when the insurance company does not agree with all aspects of the damage. It may deny a portion of the claim while paying out for another portion. If this is the case, you may not receive as much money as you would expect. However, you should receive payment for the portion approved even when the rest of the claim is in dispute.
In this case, you should review your policy to ensure the damage is covered. If you find that the insurance company should have paid the entire claim, you should contact an attorney who will help negotiate final payment on your behalf.
Another reason for underpayment is a lack of documentation. You will need to have receipts for any expenses you incur to be reimbursed even if your policy states that it pays for those costs. This may include materials and labor for temporary repairs or housing expenses if you must find temporary housing until your home is repaired. In some cases, there is a limit on how much you can claim or how long the policy will pay for temporary housing and you may have exceeded that amount. In such situations, you can apply to FEMA for assistance if your area has been declared a natural disaster.
If you feel you have been denied, delayed or underpaid unfairly, you should contact an attorney who can assist you in receiving the funds you deserve and need. An attorney will assess your claim and help you determine the best course of action. They can also direct you to other resources if you do not qualify for the additional funds.
While you may hope and expect your claim to move along smoothly, there are times when problems arise. In these situations, you need to know what to do and who to turn to for help.