What to do about a denial of an insurance claim?

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What to do about a denial of an insurance claim?

My mother’s house was destroyed by a hurricane. Her homeowner’s insurer denied her claim due to not covering damage by flood. She had separate flood insurance coverage. The flood insurance offered her only $45,000 because the home has been “condemned” by the city. She has about $120,000 left on her mortgage. If this is all her insurance will cover, she will walk away from this disaster with no home, no money but with a mortgage of $120,000. Does she have any legal recourse against the insurance company? If so, how do we proceed?

Asked on December 15, 2012 under Insurance Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Insurance is a contract; the insurer must pay when the terms of the policy indicate it must pay, and it must pay the amounts governed or required by the terms of the insurance policy. If an insurer pays less than it is obligated, the insured can sue to recover the rest of the money. From what you write, it may be a good idea for you mother to consult with an attorney (many provide free initial consultations; you can ask about this when making the appointment), bringing with her the policy, any correspondence with the insurer, any thing from the city, etc.; the lawyer can review the situation and advise as to whether the insurer has met its obligations or not.


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