How to Negotiate the Best Home Insurance Settlement

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UPDATED: Jun 29, 2022

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Written By: Jeffrey JohnsonUPDATED: Jun 29, 2022Fact Checked

It is not uncommon to disagree with an insurance adjuster during the home insurance claims process. If you feel your home insurance settlement offer was too low, you can dispute the amount. If you elect to dispute your homeowners insurance settlement, you will need to be prepared to defend your reason to disagree with the insurance adjuster by gathering evidence of your damages, your financial loss, and the cost to fix or replace your property.

When to Dispute a Home Insurance Claim

Your home insurance settlement will not exceed your insurance policy limits, so if your loss is more than your policy will pay, then you will not be fully compensated. Normally the policy limits are paid in full after catastrophic damage like in the total loss of a home after a fire or hurricane. In cases where the home insurance settlement was not paid up to the policy limits, you may feel the amount paid did not adequately cover the damages that you sustained. If you are able to show that your total costs and losses were not paid for by the insurance company, then you can prepare yourself for a home insurance dispute. Keep in mind that the process will require you document every conversation and keep records of every expense related to the repairs on your home. You cannot win a home insurance dispute without being prepared to show why you should recover more than is offered.

Is the Home Insurance Settlement Repair Related?

If the dispute of your home insurance settlement is repair related, ask your adjuster exactly what part of the repair estimate they are having an issue with paying. If it is in the labor cost or the materials, ask your contractor to write a letter explaining their labor or material costs. It may be necessary to get a second estimate to show that the first estimate was appropriate. This may seem unnecessary to you, but if you are disputing your home insurance settlement, you need to show the company that you made every effort to get your home repaired for the best price.

Is the Home Insurance Settlement for Personal Property?

If your dispute over the home insurance settlement is for the contents of your home, go over the property forms that you submitted. You will need to know if your policy pays replacement cost or actual cash value to calculate what you are owed. If you are owed replacement cost, you will be owed what you paid to replace each item, so save your receipts as you replace your personal property. If your policy pays out the actual cash value, then you will need to take depreciation into account. Find the original receipts, dig up old bank statements, or show proof of credit card purchases to establish when your items were purchased and calculate their depreciation accordingly. You can do this by looking up a depreciation schedule on the internet. It may help to create a spread sheet containing each item and the depreciation amount which you feel is correct and what the insurance adjuster actually gave you. Talk over the shortage with the adjuster and see if the depreciation amount can be negotiated to get you a little higher home insurance settlement as this will help you replace some of the necessary items.

Not Getting the Home Insurance Settlement You Were Expecting?

If you have obtained ahome insurance settlement that you feel does not adequately pay you for the damages you incurred, contact your home insurance adjuster. Follow a few simple tips to prepare yourself:

  1. Most importantly: keep accurate and complete records of everything! Document any conversations, keep all receipts, file away any letters or emails exchanged between you and your insurance company. Don’t let anything go undocumented!
  2. It may help to outline your case in written bullet points so that you can follow them when you call the adjuster.
  3. Pull out any receipts or estimates associated with the home insurance settlement for easy reference when you are talking.
  4. If you are disputing the personal property portion of your home insurance settlement, make sure you outline to the adjuster where you think the discrepancy in payment has occurred and note any documentation you may have that explains the difference.
  5. It may require that you get a couple of damage estimates to show that your original estimate is in line. DO IT! Then fax the same to the adjuster. Do not hesitate to get the documentation you need to move your home insurance settlement in the direction needed.
  6. If it is a liability home insurance settlement claim, collect all your expenses-medical bills, mileage log, loss wages, etc-and go over the amount with the adjuster in order to determine how they derived at their home insurance settlement amount.

Expect the insurance adjuster to defend their position on your payment. However, if you can show in concrete documentation why your home insurance settlement should be more, most companies will make a supplemental payment.

TIP: You may be asked at the time of the settlement to sign a form that releases the insurance company from further responsibility for the claim. If you do not agree with the proposed settlement amount, do not sign.

Homeowners Insurance Settlement Made in Bad Faith

Insurance companies are bound by law to act in a manner that is fair. Unjust delays in handling your claim as well as lack of fair dealings could indicate a home insurance claim process that was handled unfairly, or in bad faith.. If you feel your claim was prolonged to the point of causing you hardship, or that your home insurance settlement amount was ridiculously low or unfair, the insurance company may have acted inbad faith. If you have been treated unfairly, contact an attorney and have them review your settlement and consider filing a home insurance lawsuit. Consultations are free, and a home insurance attorney can be an important asset in getting the fair value of your claim. Click here to have a home insurance attorney review your case for free.

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Written by Jeffrey Johnson
Insurance Lawyer Jeffrey Johnson

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