The Truth About How Insurance Companies Value Your Loss

What Does My Policy Cover?
September 16, 2021

Hurricane Ida has left parts of Louisiana in a state of catastrophe.  Power outages and property damage are widespread throughout the State.  Over a million Louisianans were affected by Ida, and more than a week after the storm made landfall, hundreds of thousands were without power.

Insurance companies are quite busy right now, and unfortunately, that means that not every homeowner will be dealing with expedited claims handling. The truth is, in times like these, insurance companies sometimes deploy temporary employees with very little to no experience in adjusting storm claims in order to keep up with demand. Add to that the fact that these “green” adjusters have no construction or building experience.

What Can I Expect When Making an Insurance Claim?

Most insurance claims can be broken down into four steps.

  1. Initiating A Claim

Your insurance policy requires you to provide prompt notice of any claims.  For that reason, we recommend filing a claim as soon as possible.  There is no harm in filing a Hurricane Ida claim. Claims contact information is typically found on the declarations page of your policy.

Most insurers will have an online portal or claims hotline which allows you to provide your policy number and contact information with a brief summary of your loss.  It’s important that before giving any sort of sworn or written statement, you understand the consequences of doing so.  The insurance company will take every word you say in the light most favorable to them reducing  your claim.  Should you successfully clear this first hurdle, the insurer will send an adjuster to inspect your property.

  1. Property Inspection and Valuation

As mentioned previously, your insurer will assign an adjuster to inspect your property for damage.  Oftentimes, this adjuster will not be experienced in construction or repair work.  Their job is simply to photograph the damage and make a list.  This list will be uploaded to an estimating software such as Xactimate in order to generate an amount of damages.

Unfortunately, Xactimate has many variables which can greatly alter the amount of damages that it calculates.  For example, if the software has not been updated with current labor and/or material costs, the damages estimate could be extremely low.  In addition, it is more likely than not, that your contractor doesn’t use an insurance adjusters’ program to quote you repair work. It is important to note that insurance companies in Louisiana are bound by Louisiana law and owe their insureds an affirmative duty of good faith which includes timely and fairly adjusting its insureds claims.  Your insurance company will then make a coverage determination and value your claim.

  1. Initial Tender

After calculations are complete, your insurance company will make a payment, also called a tender, based on its adjusters report.  You are entitled to, and should, ask for the supporting documents used to make their initial tender amount.

  1. Proof of Loss

Thereafter, you will prepare a satisfactory proof of loss which will impose certain time limitations for your insurer to act.  Your proof of loss should includ

e any and all estimates that you’ve obtained from general contractors, a detailed contents list with approximate values, and any receipts of ALE expenses.

It is important to refrain from accepting any payment which requires a signature or release form.  While any money may be a welcome sight, it could be fatal to the rest of your claim to take a quick check that may constitute a final settlement.

If you and the insurance company disagree as to the amount of money that you are owed, you have several options, one of which is demanding appraisal in accordance with your policy.  Most insurance polices contain a provision, such as the following, which acts an alternative form of dispute resolution:

 

Appraisal can be costly and should only be employed if necessary.

 

If the insurance company accepts and agrees with your proof of loss, you find yourself entering into step four.

Summary

Our experienced team consists of seasoned litigators, general contracts, engineers, licensed home inspectors, and Xactimate experts who will efficiently examine and evaluate your claim and help you navigate the claims process.  Call or Text Favret Carriere Cronvich at 504-372-6175 to set up your free consultation today.

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