How to Sue Your Home Insurance Company

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 What Is Home Insurance?

Homeowners insurance is insurance that pays for property damage and personal injuries that occur at a person’s home due to events specified in the insurance policy. Unfortunately, insurance companies deny many claims from homeowners under their homeowners’ insurance policy. When an insurance company denies a homeowners’ claim, different legal issues may arise, including breach of contract and insurance bad faith

The amount of damages that could be recovered can vary, of course, depending on the details of the claim. If a person’s claim has been denied, they should seriously consider hiring an experienced insurance lawyer to challenge the insurance company’s denial.

Read Your Homeowners’ Insurance Policy

Homeowners’ insurance is a contract between a homeowner and their insurance company. Before a person thinks about filing a lawsuit, it is important to understand the terms of this contract, or policy, because the contract determines what the insurance company owes the insured homeowner and under what circumstances.  A person should have a copy of their complete policy, but if they do not, they need to request a copy. 

Reading the policy should explain:

  • What losses are covered,
  • Any exclusions that apply,
  • How losses are compensated, e.g. replacement cost vs. actual value;
  • The amount of the deductible; 
  • Whether a dispute about a claim must be arbitrated. 

While most homeowners’ insurance policies include coverage for property damage and personal injury liability, they also include many exceptions and limitations. For example, most policies do not cover flood damage. If a person needs help understanding their policy, an experienced insurance lawyer can help.

Most standard homeowner’s insurance policies cover specified losses due to disasters, theft and accidents. They also contain exclusions, that is, losses caused by certain specified types of disasters are not covered. So, for example, certain losses caused by the following events are covered by most standard policies:

  • Fire 
  • Lightning, windstorm or hail, as well as certain damage from snow or ice;
  • Explosion;
  • Riot or civil commotion;
  • Damage caused by an aircraft;
  • Damage caused by motor vehicles;
  • Smoke;
  • Vandalism or malicious mischief;
  • Theft;
  • Volcanic eruption.

There are other covered causes of loss; again, a person must check their policy to see what it provides. 

Most policies exclude, or do not cover, losses caused by floods, water damage from water seeping through cracks in the foundation and losses caused by earthquakes, sinkholes and landslides. If a person lives in a place where damage from an earthquake or a flood is a real possibility, they may want to specifically request earthquake or flood coverage from their insurer when they first buy their policy. Of course, the insurance company will charge more for this type of coverage, often much more than a homeowner might want to pay. 

As can be seen, it gets quite technical as to which disasters are covered and which are not. This is why it is good to consult with an experienced insurance lawyer and to have a complete copy of any policy involved as the policy determines whether a loss is covered in the vast majority of situations. 

It is possible that a person could buy insurance through an insurance broker and request a specific type of insurance coverage from the broker, only to discover later that their policy does not include that type of coverage. In this case, a person might have grounds for a lawsuit against their broker, but not their insurer.

Most standard policies include four essential types of coverage:

  • Coverage for the structure of a the insured person’s house, usually the cost to repair or replace the house; 
  • Coverage for their personal belongings including furniture, clothing, household electronics and the like; 
  • Liability protection for personal injury; and 
  • Coverage for additional living expenses that a person or family incurs if they must live elsewhere while their house is repaired or rebuilt.

Administrative Insurance Appeals

Many insurance policies allow internal or administrative appeals. In an administrative appeal, the homeowner challenges the insurance company’s denial of their claim and the insurance company reassesses the claim and any additional evidence and argument the insured homeowner provides. 

Again, the policy itself or other documents from the insurance company should explain how to file an administrative appeal to the insurance company. If a person cannot locate this information, it is important to contact the company and ask for the information. A person wants to be sure that they follow the process specified by the company for filing an appeal. It is also important to save all documentation in case it is needed in the future. Also make notes of phone conversations, including dates, times and the names of people with whom an insured person talks along with the content of the communication.

Sometimes, the insurance company will reverse its initial denial and pay the claim. However, many administrative appeals are denied. If the insurance company does offer to pay the claim or a settlement to resolve the dispute, a person should consult with an experienced insurance  lawyer before accepting the claim or settlement. 

Once a claim is paid or settled, it may not be possible to file a lawsuit for additional compensation. Any right to contest the amount may be lost forever, so it is best to get professional legal advice before agreeing to a settlement or payment of the claim, if it has been disputed..

What is the Process for Filing a Homeowners’ Insurance Lawsuit?

A number of disputes can arise in connection with a homeowner’s insurance claim. The insurance company may argue that the cause of any loss is not covered. Or, it might claim that the type of damage is not covered. Or, the insurance company and the homeowner might disagree about the amount of the claim; usually the insurance company wants to pay less than the homeowner believes they should receive.

Sometimes, an insurance company may deny a claim that they should pay per the policy and in this situation, the homeowner may have a claim for insurance bad faith, which is the denial of a claim that should be paid per the terms of the policy.

If a person’s administrative appeal with the insurance company is denied, they can file a civil lawsuit in a court of law. Of course, a person should be represented by an insurance lawyer before filing a lawsuit. To initiate the lawsuit, a person, through their lawyer, must file a complaint with the court and notify the insurance company of the lawsuit. The insurance company must file an answer to the complaint or risk a default judgment. 

Next, the insured homeowner and the insurance company participate in a discovery process—exchanging information and participating in depositions. 

If a person cannot settle their dispute, there is a trial that ends when a judge or jury decides the case. A trial can be long and arduous, and the outcome is never certain. Insurance and contract law vary from state to state. Depending on where a person lives, different rules may apply. In any event, if the case goes to trial, a judge or jury provides the final resolution. 

Hiring an Insurance Claim Lawyer

Before you resolve a homeowners’ insurance dispute, it would be best to consult an experienced home insurance lawyer. An insurance claim requires a detailed analysis of the policy at issue, the circumstances of the claim, and the law. Without legal representation, a person may settle a claim and give up any future right to dispute the amount or otherwise make a costly mistake or undervalue their claim. 

An experienced insurance lawyer can ensure that a person’s rights are protected and that their settlement is appropriate given all of the circumstances.

Where Can You Find the Right Lawyer?

If you are in a dispute with an insurance company about a homeowner’s insurance claim, you need to find the right insurance lawyer to get the help you need. When you meet with your lawyer, be sure to bring any correspondence from the insurance company, your policy documents and any estimates that have been made for the repairs that are needed to fix your home. This information will help the lawyer understand your claim, your administrative appeal rights and the validity of your claim. 

As can be seen from the information above, insurance claims can get technical fast. You can be most certain of getting the coverage from your homeowner’s insurance policy that you paid for if you have an experienced insurance lawyer representing your interests.

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