What You Need to Do After a Fire For Your Home Insurance
Suffering fire damage to your home is bad enough, but when your insurer denies the claim or underpays its coverage obligations, it may feel like insult added to injury. Insurance companies usually will pay to cover losses but they also look for ways and excuses to deny payment if they suspect the fire was caused by arson or the reckless conduct of the homeowner.
You certainly do not have to accept the denial as final and often the reasons are simply clerical errors or a misreading of the policy. But there are also denials that are not clearly stated, are ambiguous or are simply based on suspicion and very circumstantial evidence. To be sure, the burden of supporting the denial is on the insurer.
You can, and should, fight the decision if you know that your claim is legitimate and your policy covers the loss. The following are some tips to fight your insurance company if your insurance claim is denied after a fire:
- Review the policy. It will have provisions for bringing a claim, including timelines, and the information you will need to provide. Some denials are based on the lack of documentation that you can easily provide.
- What was the stated reason for the denial? If you are unsure, call your agent and discuss it and have the agent state it in writing along with the policy provision that supports the denial. If the agent says it was arson or some action you took or failed to take, ask for supporting documentation.
- If the insurer pays less than what your policy covers, ask the agent to explain why and to provide documentation to support it.
- Do your own investigation.
- Take photographs of the damage.
- Obtain receipts for any devices you had in your house such as smoke alarms or security systems or take photos of them if they are still intact.
- Note what measures you took to prevent the incident that allegedly caused the fire such as keeping your home up to code.
- Get values for the damages, replacement and repair costs.
- If necessary, retain a private fire investigator regarding factors that caused the fire if you dispute the cause given by the insurer.
- If the home was not totally destroyed, you may need someone to perform a thorough inspection for hidden damage that the insurer overlooked or underestimates.
- Document all conversations with the insurer and keep copies of all correspondence.
- If the insurer continues to deny coverage, you can appeal the decision.
- If the denial is upheld, consult with an attorney about an bad faith denial claim.
Good Faith Duty to Pay a Claim
Your insurer has a legal obligation to fully investigate all claims and to pay them if there is a reasonable basis for doing so. It can deny a claim but it must do so only if it has evidence to support the denial such as a clear coverage exclusion or if you committed a criminal act. Otherwise, an insurer acts in bad faith when it:
- Fails to fully investigate the claim
- Does not acknowledge or delays in acknowledgment of the claim
- Misrepresents the coverage
- Attempts to settle for an unreasonably low figure not supported by the evidence
- Issues a denial without a clear explanation or for a reason not in the policy
- Delays payment without a reasonable basis
- Deliberately makes an unreasonably low settlement offer despite clear evidence supporting substantial damages
- Forces the insured to file for litigation
There are numerous other ways that an insurer may deny your claim. There is usually an appeal process pursuant to the policy that you should exhaust and present as much supporting evidence as you can to overturn the denial. If the company still refuses, then call an attorney to discuss a possible bad faith insurance claim.
Damages in Bad Faith Insurance Cases
Your damages if you prevail in a bad faith insurance claim may include:
- Payment for the amount of the claim that was denied
- Interest on the amount
- Attorney’s fees
- Possible double or triple damages under Chapter 93A if liability and damages are reasonably clear
Bad faith insurance claims are rarely easy or clear-cut matters where liability or even damages are obvious. If you had a fire insurance claim denied, discuss the matter with Paul Tetzel, an attorney who will analyze your case and explain your legal rights and options. Call today for a free consultation.