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We would like to extend big thank you to The Garfinkel Trial Group for providing these very helpful tips! You can find more information about their services by clicking here to visit their listing on
Top Ways Insurance Companies Try to Avert Paying All or Part of Consumer Claims

Insurance companies are for-profit corporations. It benefits their profitability to pay the least amount of money. After spending many years working with victims of natural disasters, The Garfinkel Trial Group has learned of the games insurance companies played to reduce consumer claims and the amounts they pay.

All Floridians want is for their insurance companies to assess the storm damage and reimburse them for the full amount of their claims. All insurance companies want to do is avert paying the full amount Floridians are entitled to, outlined in their insurance contracts.

Ask yourself, how is it that US property and casualty insurers earnings rose 4.4 percent during the first 9 months of 2005, according to the Insurance Services Offices (ISO)? Why are the largest property-casualty insurance companies facing huge penalties for fraud, and thousands of lawsuits for underpayment of claims?

Insurance companies are for-profit corporations. It benefits their profitability to pay the least amount of money. After spending many years working with victims of natural disasters, our firm knows the games insurance companies played to reduce consumer claims and the amounts they pay. Here are the top ways they do it:

1. Multiple Deductibles for a Single Claim: Our firm has seen cases in which insurance companies applied multiple deductibles for a single claim. This practice is unlawful. Some insurance companies assert, “The damage does not exceed the deductible,” when, in fact, this position is almost always proved wrong once our law firm conducts an investigation.
2. Blanket Depreciation of Replacement Costs: Some insurance companies may “blanket depreciate” the replacement costs, based on the age of the house, roof or property ruined. The insurance company may, for example, depreciate not only the cost of paint but also the cost of labor. Depreciating material cost is acceptable. Depreciating labor cost is not. The consumer ends up paying the difference out of his or her own pocket.
3. Use the Threat of Policy Cancellation: The insurance policy – which is a contract – cannot be canceled because a policy holder presents a claim or retains a lawyer. Hurricanes, just like earthquakes, are natural disasters and are not based on the behavior or maintenance of the property.
4. Underestimate with Estimating Software: Insurance companies use estimating software programs. Many fail to address the sudden increases of material and labor costs due to a regional or national catastrophe. Material and labor costs are a large portions of repairs. Some materials, like roofing supplies, have increased dramatically.
5. Require Receipts to Discourage Self-Repair: Some insurance companies state they will not reimburse the consumer if they do not have receipts or if they do the repair work themselves. This is an insurance trick. Consumers should be reimbursed for repair work regardless of who performs the work.
6. Fail to Advise Policyholders About Carpeting Coverage: Coverage for carpeting can be complicated for policyholders. Some insurance companies try to convince the insured that the carpet needs only cleaning instead of replacing. Once there is water penetration or glass breakage, however, the insurance company is legally obligated to compensate for the replacement of the carpet. Some insurance companies may avoid paying for carpet padding. It is necessary to change the pad or eventually the carpet will stick to the pad causing humidity damage and mold contamination.
7. Loss of Power: If you lost power, you?re entitled to compensation for the loss of food in your refrigerator, as well as the cost of an electrician to survey the wiring in the house.
8. Asbestos: Any structure built prior to 1978 will most likely have asbestos in the plaster, acoustic/popcorn ceiling, air ducts and so forth. If there is damage to the inside walls, the insurance company has a duty to test for asbestos and compensate you for the ?abatement? (removal) of the asbestos. On an average claim, this issue costs the insurance company several thousand dollars.
9. Painting: In order to paint the inside or outside of the house, a lot of prep work must be done, including moving furniture, detaching and resetting light fixtures, window coverings, electrical outlets and so forth. On a typical home, this issue will cost the insurance company several thousand dollars.
10. Repair of Walls/Insulation: If the walls are damaged by water intrusion, the insurance adjuster typically fails to include replacement of moldings (crown or base) and the insulation.
11. Additional Living Expenses (ALE): Aside from the time during which you have to move out during the natural disaster, your policy should also cover additional living expenses for the time it will take to repair the house.
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