With insurance claims, there are many pieces to the puzzle. As an insurance company, you have to first receive notice of a claim on a policy. You then have to send an adjuster out to investigate the claim and determine if it appears to be within the scope of the coverage.
If it is, then the hard part begins. Determining the value of the claim. The insured, especially if the property is their home, is likely to have strong feelings toward the property and the value of their claims. What is sometime problematic is when the terms of the insurance contract differ from what the homeowner or other insured believes them to be.
Insurance contracts are generally not a light read, and homeowners are likely to have never read the full policy. This means that when the claims adjusting process reveals that they will not receive what they expected, it can often lead to insurance litigation and accusations of insurance bad faith on the part of the insurer.
A bad faith claim can arise if an insured believes the insurer is unfairly denying a valid insurance claim or is unnecessarily delaying the payment on a claim. Sometimes the problem is obtaining accurate information from the insured, but anytime there is a perception of unnecessary delay, an insurer is as risk of being found guilty of bad faith.
A homeowner in Marrero is suing their insurer, claiming they have improperly manipulated adjuster software to undervalue the claim she made after a hailstorm. The homeowner also claims there was a breach of the contract and non-prompt payment among other allegations.
The best defense to these types of claims is to clearly demonstrate the insurance claim was handled in a timely fashion and that the damage adjustment was fair and reasonable given the terms of the contract.
Louisianarecord.com, “Marrero homeowner claims insurer manipulated software to provide lower property damage award,” Kyle Barnett, April 27, 2015