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Insurer settles fire damage claim on homeowner policy

Disputes in Florida regarding denied insurance claims have been historically a substantial source of lawsuits. This includes small businesses trying to collect on their business coverage. It also includes consumers who may be pursuing a claim for fire damage, first party insurance, theft, or other property damage.

A recent case illustrates the plight that some consumers are put through in trying to obtain a fair payout in an unpredictable and frustrating insurance claims process. The couple made a claim for fire damage under their homeowner’s policy for a devastating fire occurring in January. They are still not back in their home and have only in the past week settled, under duress, with their insurer.

The Maryland couple has a policy for $233,000, and they contend that it will take $223,000 to rebuild their house. They presumed that, based on the apparently uncontested total loss, that the company would extend its policy limits for the rebuilding of the house. The insurance adjuster for Safeco allegedly told him that it doesn’t work that way, and that the company never pays out its policy limits.

For those experienced in insurance litigation, the repetitive practices of insurers to minimize or refuse to pay claims are well-known. One of the ploys sometimes used by an adjuster is to claim that a significant part of the damage is pre-existing. Insurance companies can back up their position by sending in a so-called expert to determine the actual cause. These experts virtually always favor the insurer’s position.

Such strategies work for insurers, who have the resources to outlast the consumer. It may happen that way in Florida and all other states when a large claim is made on a homeowner’s insurance policy. In this case, however, unusual circumstances knocked the insurer’s fire damage strategy for a loop. A local television news reporting team learned of the couple’s plight and championed their cause. The insurer, embarrassed into submission by bad publicity, came back with $181,000, which the homeowners accepted, but under duress, because they could wait no longer to get back into their home.

Source: wbaltv.com, “Couple spends months arguing fire insurance claim“, Barry Simms, July 30, 2014

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