Homeowners in Texas generally need to carry homeowners insurance. Mortgage lenders require coverage to protect the collateral property for their loans. Those who have paid off their mortgages often recognize that a single premises liability claim or major storm could cause lasting financial hardship.
People rely on their homeowners insurance coverage for help when there is significant damage to a property because of a storm or a criminal incident. Unfortunately, insurance companies will often do whatever they can to minimize what they pay on large claims. The following are some of the underhanded tactics insurance providers employ to reduce what they pay policyholders.
Offering a lowball settlement
The costs to repair a property vary from year to year. For example, lumber prices were on the rise for multiple years but have recently started to come back down. Those fluctuating costs mean that insurance adjusters should evaluate every claim individually. They will often try to settle a claim for far less than the policyholder requires. Those who accept a settlement without getting quotes from multiple companies or looking into the full cost of property damage may have to absorb some of those expenses themselves.
Trying to increase the deductible
One of the ways insurance companies deter frivolous claims is by requiring that policyholders pay a deductible. Homeowners insurance policy deductibles are often $500 or $1,000, sometimes even more. The deductible for claims will depend on the terms set when someone renews their policy. Those terms should last until someone’s annual renewal date. Unfortunately, insurance providers frequently try to trick people into paying more than they should by raising the deductible in the middle of a claim before someone needs to renew their policy.
Manipulating policyholders or businesses
Sometimes, service providers directly interact with insurance adjusters. The representative of the insurance company may refuse to communicate or offer a set price and then not discuss the nuances of a repair project with the company handling the work.
Other times, an insurance professional may try to manipulate the policyholder. For example, they may ask someone to give a recorded statement. They will then try to get the policyholder to state that their failure to prepare for a storm, maintain certain property features or secure the home contributed to the damage. The insurance company could then try to reduce what it pays on the claim due to the policyholder seemingly having a degree of fault for the incident.
These manipulation tactics are all about preserving the company’s bottom line and may constitute bad faith insurance practices. Seeking legal guidance when negotiating a large insurance claim may help people avoid these and other underhanded reactions to significant claims.