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6 Colossal Mistakes Homeowners Make With Insurance Claims

 

 
The average Texas homeowner pays $3,429 in annual home insurance premiums, but only makes a claim once every 9 years. That’s $30,861 in premiums over that span!
As a policy holder you have a contract with your insurance company. When you experience legitimate damage to your property, it is your contractual right as a policy holder to make a claim and get paid in full for your loss. After all, that's what you have insurance for in the first place.
But all too often, mistakes are made by homeowners in the process of making a claim - mistakes that unnecessarily cost them thousands of dollars.
We hope this guide will help you avoid the 6 most common mistakes we see homeowners make during an insurance claim.

 

Mistake #1 - Not Filing a Valid Claim

Most people have insurance policies to protect themselves should something go wrong, then when something does, they’re afraid to use it!

That sounds crazy at first. You have insurance. Something went wrong. Why not use it?

The fear is that by making a claim, rates will go up or you will be cancelled. That is possible if you make a high-risk claim (e.g. dog bite) or if you have too many claims for incidents that are within your control (e.g. bathtub overflowing), but not for naturally occurring incidents like a roof insurance claim. For more info, check out our blog What Causes Insurance Premiums to go Up?

A main driver of the cost of your premiums is the amount of claims made by all homeowners in your area. So if a windstorm comes through and all your neighbors get a new roof, the insurers see your area as a risk and your premiums are likely to go up whether you personally make a claim or not. 

 

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Claims made in response to a naturally occurring incidents, or “Acts of God,” CANNOT legally result in an increase in premiums, cancellation, or non-renewal!  

“Acts of God” are claims that are a result of a wind storm, hurricane, hail damage, or tornado and are beyond your control. Therefore, you are not punished for making a claim due to their damage.

Conclusion: Fear of increased premiums or non-renewal should not keep you from making a claim following an “Act of God” incident. However, there are times when you should NOT file a claim.

 

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NO WIN, NO FEE GUARANTEE:

We are pleased to assist clients with property insurance claims on a contingent fee basis, meaning that if the firm does not obtain a recovery, or if the amount recovered does not exceed the amount of costs and expenses, then the firm is not entitled to any fees.

ZERO out-of-pocket cost to you means ZERO risk. Contact us for more details.

 


Mistake #2 - Filing an Unnecessary Claim

Homeowner’s insurance is for significant events like a fire, hail or wind storm, or a fallen tree on your home – not for minor expenses like the theft of a bicycle or a single broken window. So, while a claim may be valid, it may not always be wise to file it.

Take a look at your policy. Most contain a 1% or 2% deductible. The amount of the claim needs to be considerably more than the deductible to make it worth making the claim.  

So how do you know if you have enough damage to make a claim?

Start by looking around your home – do you see:

  • dents in the shingles, roof jacks, or gutters/down spouts? (see image).
  • dents/holes in siding or fascia boards, or chipped paint?
  • damaged air conditioner coil
  • cracks in skylights, windows, or frames
Shingle Hail Damage
Look for cracks in skylights
Look for dents on roof vents
Look for dents on gutters
Siding Hail Damage
Window Hail Damage
Fence Hail Damage
Air Conditioner Hail Damage

If you don’t see much damage, aren’t sure what you’re looking for, or don’t want to get on your roof, have a good roofing contractor perform a free inspection. You can also hire an Independent Insurance Adjuster (not a Public Adjuster – See Mistake #5).

If you’re receiving multiple solicitations from roofers and/or your neighbors are getting roofs put on, chances are you have enough damage to go ahead and a claim.

Conclusion: Don’t file a claim for minor damage, but if a significant storm occurred and there is evidence of damage, go ahead and file a claim – but be careful who you let file your claim if you don’t do it yourself.

 

Quote Mark Grey
Our home got hit pretty hard by a hail storm - you could see little dents all over our shingles. Most of our neighbors got new roofs, but our insurance company said ours just needed to be patched up.  Our roofing guy referred us to Ron and The Lane Law Firm. They fought our insurance company and got us a new roof as well as money to fix items we didn't even realize had damage, all without any money out of pocket!
-Sandra

Mistake #3 – Hiring a storm chaser

Large-scale storms with wide-spread damage attract contractors who know that reputable businesses are overwhelmed. That’s when these vultures show up at your door making promises and telling lies.

Storm chasers do what their name describes – they chase storms around from area to area, hawking their roofing services. While some companies are legitimate and may do great work, how responsive will out-of-town roofers be if you have a problem later? Look for a local phone number and address on business cards, truck signs, and on their website.

Hicks roofing

Many of these storm chasers are unscrupulous. Preying on the elderly or uninformed with aggressive sales tactics and inflated charges. Some ask for cash up front and disappear, while others create fake damage in hopes of getting insurance to approve. Stay away from these companies!

Make sure to check out any contractor before signing an agreement. Check the Better Business Bureau for complaints. Ask for recommendations on neighborhood chat rooms or through social networking. Check references. Look at consumer reviews on Google and Yelp.

Consider hiring members of the Roofing Contractors Association of Texas or other local professional roofing contractor association. 

Conclusion: Before hiring any contractor, consider their rating in the BBB, carefully read your contract and do not pay cash upfront to keep yourself out of trouble.

 

Mistake # 4 - Not paying your deductible

Failing to pay your deductible is probably the most common mistake homeowners make – often without knowing the consequences.

Storm chasers and shady roofers promise to put on your roof for whatever insurance pays. While the thought of a “free roof” sounds great, failing to pay the deductible is illegal and going along with this scheme means you may be committing insurance fraud.

Disreputable roofers will tell you they can get around this requirement by paying you an “advertising fee” for putting a sign in your yard. Or they will conveniently forget to collect the final payment at the end of the job.

Regardless of how these scammers try and rationalize it, not paying your deductible is a breech of contract and may constitute insurance fraud.

Insurance fraud costs consumers and average of almost $700 per family in additional premiums per year. But more importantly, insurance fraud carries a penalty up to $10,000 and up to 2 years in state prison, depending on the dollar value of the fraudulent claim. See Tex. Penal Code § 35.02(a).

Conclusion: Pay your deductible. If a roofer even suggests not paying it, look for a new roofer! If they are willing to induce you to commit fraud, who knows what else they’ll do!

 

The Lane Law Firm won $16,206,435.64 in a jury verdict against an insurance company over an underpaid/denied claim in Texas.*

Find Out More

*Attorney's fees and litigation expenses totaled $942.389

 

 

Mistake #5 - Hiring a Public Adjuster

The average homeowner only makes one claim per decade, so being unfamiliar with the process is normal. So, with such an important decision on the line, it can be tempting to let a public adjuster file a claim on your behalf.

Beware! Standard home owner claims rarely require the extra expense of using a Public Adjuster.

Public Adjusters are specially trained and can submit comprehensive information to support your claim as well as will follow up until a decision is made. But public adjusters have no special ability to expedite a decision and can’t do much to improve the odds of an approval.

If the claim is approved, you’ll owe the public adjuster about 10% of the proceeds. If denied, you still owe the public adjuster even though they couldn’t get the claim paid! They can’t provide legal advice on how to proceed; all they can do is refer you to an attorney.

Conclusion: Public Adjusters may save you some time by making the claim for you, but not much – and they take 10% of your claim, possibly leaving you short of funds to complete repairs. You’re better off filing the claim yourself or seeking help from a roofing contractor.

 

 

Why-the-Average-CPA-Isnt-Worth-the-Money

Mistake #6 – Accepting a denial

Homeowner’s Insurance is a $95-billion-dollar business, with less than half of that being paid out annually to cover losses. With so much money at stake, many insurance companies routinely deny or underpay claims that should otherwise be paid.

Why? Simply put – GREED.

Insurers know that only about 20% of denied claims will be challenged. Even if they eventually pay most disputed claims – plus extra attorney’s fees, they still come out millions of dollars ahead. So, despite all the rhetoric about “being in good hands,” insurance is big business, and they’re out to win – at your expense.

Sometimes a denial or underpayment isn’t intentional, and it certainly isn’t final. You pay your premiums, and if you have a legitimate claim, you deserve to be paid!

If you receive a denial in writing, start asking questions. Perhaps a mistake was made during the process. The denial could have been made for the wrong reason, or because of inaccurate information, so be persistent.

Conclusion: If you still don’t get the proceeds you deserve, seek legal help. A competent attorney will help by enforcing the policy so you get you paid what you deserve, typically with no out-of-pocket costs. Make sure you hire a firm experienced in handling denied insurance claims. Perform your due diligence by checking with the State Bar of Texas as well as attorney ratings and reviews at www.Avvo.com.    

 

We hope you’ve found this guide to be beneficial. For more information on how to file an insurance claim, check out our blog “You’ve Experienced a Loss, Now What?” Additional helpful resources are found on our website and blog.

If you have questions, schedule an appointment with Ron Glaser, our insurance claims specialist, or call him at 877-408-3328.

 

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