What is Homeowners Insurance?
Homeowners insurance covers damage to a home that you own. It will pay for damage to the home itself and usually for damage to your personal property and other structures, like a shed or detached garage, on your property. It will also pay off amounts you may owe on a mortgage in the event that your home is totally destroyed.
- Coverage A is the coverage that pays to replace actual damage to your house itself.
- Coverage B is the amount of insurance that covers your personal property or personal belongings within your residence.
- Coverage C is coverage for the other structures mentioned above.
In addition, replacement cost coverage pays the amount of money necessary to replace your home or repair a portion of it if it is damaged while actual cash value insurance only pays what the home or damaged portion of the home is worth. With replacement cost coverage you will have to go ahead and make the repairs in order to get the full amount of the coverage generally.
What Does My Homeowners Insurance Cover?
If you own your own home, you likely have homeowners insurance. Homeowners insurance covers many of the destructive events that might happen to a typical home. These include Events like tornadoes, hurricanes, windstorms, rainstorms, fire, lightning, theft and vandalism. They also often cover things like burst pipes and backed-up toilets.
However, homeowners policies often do not cover flooding, a sewer that backs up from outside of the house (unless you have purchased this coverage specifically) and damages from settling of the foundation or earth movement. Insurance also often will not cover damage caused by improper design or a failure to maintain the house.
What Happens When I Have an Insurance Claim?
When you have damage to your house that you believe may be covered, you should report your claim to your agent or directly to the company as soon as possible. Here is a free resource that will give you some tips on things you can do when you have an insurance claim. After you report your claim, the insurance company will send out one or more adjusters.
The adjuster will use a computer program, likely a program called Xactimate, to estimate the cost of repairing or replacing your home and any other structures. This estimate will include a “replacement cost” figure and then a “depreciation” amount. The insurance company will subtract depreciation from the replacement cost amount to come up with what they say is the actual cash value of your loss.
If you have replacement cost coverage, the insurance company will pay you the actual cash value amount until you have made the repairs or replacement. When you have done these things, they will pay the amount of the depreciation.
If you are working with a contractor who has experience working with insurance companies, they usually will be able to coordinate the work with the payments so that you do not have to pay any of your own money, except for the deductible. If you do not make the repairs, or have an actual cash value, you will not receive the depreciation.
The insurance company may also ask to take a recorded statement or any examination under oath. Here are some tips for what to do in this situation.
How Can We Help?
At our firm, we help with underpayment of claims by the insurance company, denial of claims, and insurance bad faith.
Underpayment of Claims
Insurance companies often try to pay as little on a claim as possible. They can do this in many different ways. Some examples include saying that some repairs are not necessary and keying in lower-quality items into their software. For instance, if you have custom cabinets in your kitchen, the adjuster might key them in as “builder’s grade” cabinets.
This insurance company tactic, by itself, will cost you thousands of dollars. When these underpayments are substantial, we can help negotiate with the insurance company to recover additional money for you.
Denial of Claims
When the insurance company refuses to pay the claim, we can help you look through your insurance policy and determine whether they had a good reason to deny the claim or whether they are just trying to get off the hook for something they should be paying. You would be surprised by the number of times that insurance companies try to take the easy way out and twist the language of their policies to avoid paying claims that they should pay.
We have looked through many policies and maintain a library of form policies. We also have access to state-of-the-art electronic research on insurance policies. If the insurance company has denied your claim for the wrong reason, we can help you recover.
Bad Faith occurs when a company deliberately tilts the playing field in its favor when it investigates and ultimately denies or underpays your claim. Insurance companies have a duty to treat their insured’s interest with the same care as their own. They also have a duty to conduct and thorough, complete and unbiased investigation.
Unfortunately, we often see them trying to stack the deck in their own favor. For example, they can do this by twisting policy language, incentivizing their employees to deny claims, or looking only for reasons to deny a claim (and ignoring facts in favor of payment). Click here for an article describing bad faith in greater detail.
When an insurance company commits bad faith they often can be held liable for additional damages like mental anguish and punitive damages. We help consumers and businesses with bad faith claims all the time.
Contact an Experienced Homeowners Insurance Claims Attorney
Call 205-383-1809 or contact us online to request a free initial consultation. Offices are conveniently located right off of Highway 31, and ample free parking is available. Consultation hours are 8 a.m. to 5 p.m., and evening and weekend appointments may be available by special arrangement. Hourly rates are reasonable and most personal injury and insurance litigation cases are handled on a contingency-fee-basis.