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Unfair Practices Insurance Company’s Use to Avoid Paying Claims

Since most people finance the purchase of their dream home, they have homeowner’s coverage because the lender imposes a duty to maintain such insurance to protect the insurer’s security interest.  Even if the purchaser of a home pays cash, homeowner’s insurance is essentially a necessity to protect an asset that most families consider the foundation of their future financial security.  The insurance industry earns an estimated $30 billion per year and own assets with a value greater than the Gross Domestic Product (GDP) of all but two nations.

Unfortunately, this enviable financial position is not obtained by maximizing the amount paid on claims as promptly as possible.  Rather, many insurance claims are denied or underpaid based on sharp tactics and bad faith practices.  Our Miami Homeowner’s Insurance Claims Attorneys have provided some examples of the unfair practices used by insurance companies to exploit policyholders.  These are as follows:

Dragging Out the Claims Process: The process of delaying the claims process and payment of a claim can be one of the most effective tools available to insurance companies trying to mitigate liability.  Insurance adjusters recognize that the financial hardship faced by a property owner mounts the longer the insured waits to receive insurance proceeds.  Mortgage payments, car payments, health insurance premiums, and other monthly expenses do not go away during a pending insurance claim.  As the financial pressure to cope with these obligations increases, an insured faces a greater incentive to get an insurance claim settled and paid, even if it is for less than the full value of the claim.  Insurers also are well aware that if the process takes an exorbitantly long time to resolve, the policyholder might just give up.

Confusing Policyholders with Unfamiliar Terminology and Policy Provisions: If you have ever undertaken the task of reading every provision of your homeowner’s insurance policy, you know it is voluminous and difficult to understand.  Despite the existence of laws requiring insurance contracts to be written in “plain language,” the typical homeowner has little more than a vague understanding of the conditions, exclusions, terms, and limitations that may compromise or negate a claim.  Although an experienced Florida insurance claims attorney recognizes that actual ambiguity in an insurance contract must be construed against the insurer, the complicated language and terms of policies provide ample opportunity for insurance defense lawyers to creatively interpret policies to deny claims.

Denying Claims without Merit: The motivation of insurance adjusters and other insurance company representatives to deny claims often is intrinsic to the employee compensation system.  Some insurers pay bonuses or provide other financial perks to employees with a record of denying a disproportionately high volume of claims.  Conversely, some of the largest homeowner’s insurance companies’, which includes AIG®, State Farm® and Allstate®, have been shown to terminate employees with a track record of handling a disproportionately high number of claims that get paid.

Canceling Policies for Frivolous Inaccuracies in Applications: An insurance company can refuse to pay a claim based on fraud, lies, or omissions in the policy application.  However, the insurer cannot simply sandbag policyholders by accepting payments for years only to raise a mistake in the original policy application when a claim is made after many years have passed.  An insurer can rescind a policy (i.e., retroactively cancel) and deny a claim based on fraud or a “material” misrepresentation and/or non-disclosure.  However, the false or hidden information must have been of such a nature that the insurer would not have issued the policy or would not have done so under the same terms had the insurer been aware of the actual facts.  The insurer also must have actually relied on the misleading information in issuing coverage and crafting the terms of the policy.  Further, insurance companies also might be required to raise issues related to errors in the policy within a certain period of time after the policy goes into effect depending on state law.

Greenberg Stone and Urbano:  Seeking Maximum Recovery for Damages Sustained Due to Negligence 

If your homeowner’s insurance company is engaging in practices or a pattern of insurance bad faith in handling your property damage claim, our Miami Homeowner’s Insurance Claims Attorneys at Greenberg Stone and Urbano will tenaciously pursue the full compensation you deserve.  For over 130 collective years, our firm has assisted accident victims in personal injury and wrongful death actions across South Florida.  We seek to obtain compensation for your tangible and intangible damages, including medical bills, lost wages, pain and suffering, and more.  Our skill and dedication has earned us an AV rating from Martindale Hubbell and recognition as one of South Florida’s top firms by the Miami Herald.   Call us at (888) 499-9700 or (305) 595-2400 or visit our website to schedule your initial consultation.

 

 

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