In large-loss property insurance claims, it can be difficult to know if you’re really being treated fairly by the insurance companies that provide protection for your business. Attorney Bill Voss, a policyholder advocate with over a decade of experience in large-loss property insurance claims, often sees businesses accept far less than their insurance claims are worth. Even worse, he often sees policyholders accept denials that have been issued in “bad faith.”
Your Rights in a Large-Loss Insurance Claim Denial
Insurance companies deny property loss claims for lots of reasons, and some of those reasons are completely legitimate or fall squarely on the shoulders of the policyholder. For example, an insurance company may deny an insurance claim in “good faith” when:
- You lack coverage. In some cases, even large businesses overlook important coverages until after they’re needed. Commercial properties are complex properties. If the property has expanded or significantly changed since the last time you reviewed your coverage, you may not actually carry the coverage you believed you had. These denials may be issued because a portion of the property hasn’t been included in the policy or because a specific hazard isn’t included. While the insurance company may not always be fair in denying that you carried a certain kind of coverage, there are times when businesses simply weren’t insured for the type of loss.
- You have coverage through a different policy. Large commercial properties are usually covered by several different policies, all providing different layers of coverage to fit the “whole picture” of a property. In the arduous process of preparing to submit insurance claims after a large loss, it can be surprisingly easy to submit under the wrong policy. For example, water damage may be covered by a general business insurance policy or a flood insurance policy, depending on how it happened. While insurance companies do sometimes attempt unfairly to “pass the buck” back and forth in complicated claims, policyholders have a responsibility to make sure they’ve reviewed all insurance policies for the property and have some understanding of what is covered by each.
- You submitted inaccurate documentation. It’s up to the insured to make sure that the assessments, estimates, and other documentation submitted to the insurance company are fully accurate. If you have submitted forms that don’t truly show the extent and value of your loss, you can’t expect the insurance company to just decide to pay you more. An experienced policyholder advocate can be instrumental in preparing the required documentation after a large loss and making sure your losses are accurately reflected.
However, sometimes an insurance company will deny claims—or, as is often the case in large-loss claims, a portion of a claim—without good reason and in violation of the policyholder’s legal rights. A property insurance claim denial for a commercial property is made in “bad faith” when:
- The insurance company unreasonably denies coverage.
- The insurance company refuses to pay a legitimate claim.
- The insurance company refuses to settle a legitimate claim or unreasonably delays resolution.
- The insurance company didn’t appropriately investigate a claim before issuing a denial.
Even if the insurance company does try to settle a large-loss claim, it is still worth reviewing the offer carefully before accepting. The policyholder may still need to be on guard against underpayments, as well as be prepared to pursue insurance litigation if the insurance company does underpay a claim or portion of a claim.
Protect Your Business When the Insurance Company Refuses to Settle Your Claim
Any insurance claim that follows a large loss on a commercial property can be complicated. To get experienced help after the insurance company has refused to honor your rights or the terms of your commercial insurance policy, reach out to the Voss Law Firm today.