Understanding Your Insurance Companies Obligations During a Claim
As a public adjuster, I’m often asked:
“What are my rights when dealing with insurance companies?”
Understanding your insurance claim rights is crucial. Insurance companies have specific obligations to policyholders, and there are certain practices they’re legally prohibited from engaging in.
To simplify the complex laws surrounding this topic, we’ve developed what we call the “Policyholder’s Entitlement Guide.” This essential guide outlines the five key obligations your insurer must fulfill during the claims process. Whether you’re facing a property damage claim, business interruption loss, or any other insurance dispute, knowing these rights can significantly impact your claim’s outcome. Don’t let insurance bad faith practices or claim denials leave you shortchanged – empower yourself with this vital information.
#1: The benefit of the doubt is your right – not a favor.
When you file a property damage claim or any insurance claim, an insurance adjuster’s primary goal should be finding ways to pay out your claim, not reject it. Unfortunately, many policyholders face unfair claim denials or lowball settlements because they’re unaware of this right. Don’t let insurance bad faith practices leave you under-compensated. Empower yourself with knowledge and professional advocacy.
#2: The Claims Adjuster is obligated to help the policy holder with the claim.
Your insurance company’s claims adjuster has a legal and ethical obligation to assist you throughout the claims process. This includes explaining coverage and available benefits to the policy holder. Insurance claim adjusters should help the policy holder by bringing the claim to a prompt and fair conclusion. This isn’t just good customer service—it’s their duty.
#3: Prompt and Fair Claim Investigation following your claim’s initiation.
Your insurer is legally required to investigate your claim promptly and fairly. This isn’t optional—it’s a fundamental aspect of insurance law that directly impacts your claim’s outcome. Failing to conduct a fair and prompt investigation can look like; Not obtaining necessary inspection reports, neglecting to review property content details, or making no meaningful evaluation of the claim. Our firm has seen cases that take years to complete as a result of the insurance company ‘dragging their feet’.
#4: Your insurance company can’t simply refuse to pay your claim without telling you why.
You have the legal right to a clear, detailed explanation for any claim denial. It allows you to challenge the decision if it’s unfair. Policy holders are able to provide additional information if something was misunderstood, this helps you understand your policy coverage better for future claims as well.
Unfortunately, many insurers hope you’ll simply accept a denial without question. They might offer vague reasons or no explanation at all, leaving you confused and potentially cheated out of a fair settlement.
#5: Insurance companies must disclose any significant facts or circumstances they uncover.
Insurance companies have seasoned investigators and claims experts handling the claim investigation process. Because of this, they are the best equipped to conduct thorough investigations. If you take certain actions or inadvertently compromise the investigation, the insurer could argue your coverage is voided. Given this unique insurer-insured relationship, transparency isn’t optional—it’s mandatory.