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What To Do If Your Insurance Company Is Underpaying You

After a disaster leaves you with physical injuries and property damage, the last thing you might expect is your insurance company making it unreasonably difficult to achieve a fair settlement. Unfortunately, insurance companies are notorious for mishandling claims and using various tactics to underpay clients. If you believe an insurer is underpaying you for a claim in Arizona, take the following steps to avoid settling for less than you deserve.

Read Your Policy

First, make sure you fully understand your insurance policy. Read your full policy, including all of the fine print, to understand if and when your damages are covered, what constitutes a covered event for a property damage claim, how much the insurance company will pay based on the limits of your policy, and what you must do to file a claim. If necessary, print out your insurance policy and bring it to an insurance claims attorney for a comprehensive overview of your policy’s terms and provisions. 

Document Your Losses

If you still believe an insurer is underpaying you based on the terms of your policy, document all of your losses. Your original evidence might not be strong enough. It is important to have detailed documentation of the losses that you are claiming. If you’re filing a property damage claim, for example, take photographs of the items damaged before you discard anything. If you are filing an injury claim, request copies of all of your medical documentation. You should also keep a record of all communications that you receive from the insurance company, including a denial letter if the company rejects your claim.

Ask for an Internal Review

The first step in trying to get the insurance company to change its decision is requesting an internal review. It is possible that the insurance company or a claims adjuster simply made a mistake, such as failing to properly calculate your losses or misinterpreting the language of your policy. Request an internal review by calling the insurance company and asking to speak to a representative about your claim.

Ask the representative how the value of your claim was calculated. If you notice any issues, such as a loss that the insurance company left out of the equation, point this out. Request a second review of your claim, where someone else at the insurance company will look over your paperwork and may give a different evaluation than the first claims adjuster. The insurance company may request further information or documentation from you to reassess your claim.

Request a Third-Party Review

If an internal review of your claim still results in a settlement offer that is too low, you have the right to request a third-party review. You can hire your own private claims adjuster to assess the value of your claim, for example, and submit this estimate to the insurance company with a counteroffer. 

You can also file an official complaint against the insurance company with the Arizona Department of Insurance. The department will investigate your complaint and may force the insurance company to offer a better settlement if it has undervalued your claim. The insurance company may also face penalties or fines for mishandling your claim.

Consult With an Insurance Bad Faith Attorney

Finally, consult with an insurance bad faith attorney about the possibility of bringing a personal injury lawsuit against the insurance company. Underpayment of claims is a common example of insurance bad faith. Bad faith means that the insurer is intentionally mishandling your claim in an attempt to save money. 

If the insurer is underpaying your claim as a form of bad faith, an attorney can help you file a lawsuit against the carrier. A successful bad faith insurance lawsuit could result in fair payment for your original claim, plus interest. The courts may also award you punitive damages if the insurance company is found guilty of fraud or malice. Consult with an attorney today for more information.