Insurance companies providing coverage often deny policy holders' valid insurance claims for damage, or pay as little as possible. Is your insurance company treating you fairly? Here are five things insurance companies don't want you to know.
- If your policy includes replacement cost, you are entitled to complete replacement of damaged property. Insurance companies may try to fix your damage in a piecemeal fashion or put your property back in the condition it was before the loss. For example, they may try to replace only a few damaged shingles or just one side of your roof. In many cases you are entitled to complete replacement of damaged property. Insurance companies sometimes don’t tell their insureds that the insurance company must pay the cost of replacing an item, and not just the actual cash value of the damaged property.
- There is a narrow definition of flood damage and the burden of proof is on the insurance company. Because homeowners' and business owner’s insurance excludes flood damage, insurance companies often claim any type of water damage is due to flooding. If the insurance company cannot prove that the water damage meets the specific and narrow definition of flood damage, they must pay your claim. For example, many times property suffers damage from both wind and flood. The burden of proof is on the insurance company to prove that the property was damaged by flood and not damaged by wind. Otherwise, the property is covered, and this is frequently impossible for the insurance company to prove! Further, under the law, if a property is damaged by something that is covered (like wind), and something that is not covered (like flood), then the loss is covered.
- The insurance company must pay for living expenses. If your damaged home is not habitable, the insurance company must pay for you to live in a residence of like kind and quality to your own home.
- You may be entitled to receive more than the amount for which you have insured your property. Insurance policies often include inflation guard coverage to cover losses to a home that has increased in value since the policy was purchased. For example, if you insured your home for $400,000, with an inflation guard provision, and your home was worth $500,000 at the time of loss, your policy would cover up most, if not all, of the increase in your home’s value.
- You may be covered for a number of special circumstances and damages. Your insurance company may fail to tell you that your policy covers the cost of debris removal, the cost of replacing a damaged screened pool enclosure, and the costs associated with bringing a building up to code, rather than just returning it to pre-loss condition.