Navigating A Lowball Estimate: Strategies For Policyholders

If you believe that an insurance adjuster has lowballed their estimate, there are several steps you can take to rectify the situation. Firstly, it is important to understand your insurance coverage and review your policy to ensure that the low offer includes all of the damages covered by your policy. You should also document your pre-loss conditions and costs, as a lack of information can result in lower estimates. Additionally, you can request that the insurance adjuster re-examine the property or contact your insurance company to discuss the estimate further. If you are still unsatisfied, you may consider hiring an independent public adjuster to provide a second opinion or consult an experienced attorney to help you negotiate a fair settlement. It is important to remember that you are not bound by the insurance company's initial estimate and have the right to negotiate for a higher amount.

Understand your insurance coverage and policy

Understanding your insurance coverage and policy is crucial to ensure you know what to expect in the event of a claim. Here are some key points to help you navigate your insurance policy:

• Know your policy type: Different types of insurance policies exist, such as health insurance, auto insurance, and homeowners insurance. Each type of policy has unique characteristics and coverages. For example, health insurance can include EPO (Exclusive Provider Organization), HMO (Health Maintenance Organization), and PPO (Preferred Provider Organization) plans, each with distinct provider networks and coverage levels. Auto insurance, on the other hand, typically includes liability, collision, and comprehensive coverages. Understanding the specifics of your policy type is essential.
• Review the declaration page: The declaration page, often the first page of your insurance policy, provides vital information. It identifies the insured, their personal information, the risks or property covered, policy limits, and the policy period. It serves as a summary of your coverage and is an essential reference point when reviewing your policy.
• Understand the insuring agreement: The insuring agreement outlines the promises and commitments made by the insurance company. It details what is covered and what is not. There are typically two forms: named-perils coverage, which only covers specific perils listed in the policy, and all-risk coverage, which covers all losses except those explicitly excluded.
• Familiarize yourself with exclusions: Exclusions are provisions that take away coverage from the insuring agreement. Common exclusions include certain perils or causes of loss, such as floods or earthquakes, and specific types of property, like personal automobiles or pets. Understanding exclusions is crucial to know what your policy does not cover.
• Review the definitions: Insurance policies often contain a definitions section that explains the specific terms used. This section is important as it clarifies who and what is covered by the policy. Pay close attention to how "family member" or "insured" is defined, as this can impact the scope of your coverage.
• Be aware of endorsements and riders: Endorsements and riders are provisions that modify the original insurance contract. They can add, delete, or change the terms of your coverage. Endorsements and riders are important to understand as they may impact the adequacy of your policy in meeting your needs.
• Understand your coverage limits: Different types of coverage have varying limits. For example, in auto insurance, liability coverage is typically split into bodily injury liability per person, bodily injury liability per accident, and property damage liability. Knowing these limits is crucial to ensure you have sufficient coverage in the event of a claim.
• Know your deductibles: A deductible is the amount you must pay before your insurance coverage kicks in. Different coverages may have different deductibles. Understanding your deductibles is essential to managing your finances in the event of a claim.
• Review regularly: Insurance policies can change over time. It is important to review your policy regularly, especially when it comes up for renewal, to ensure it still meets your needs. Life changes, such as buying a new car, having a baby, or acquiring new assets, may require adjustments to your coverage.

Remember, insurance policies can be complex and filled with legal jargon. Don't hesitate to contact your insurance agent or company if you have any questions or need clarification. They can guide you through the specifics of your policy and help you understand your coverage.

Document your pre-loss conditions and costs

Documenting your pre-loss conditions and costs is crucial when dealing with insurance claims. Here are some detailed steps to help you through the process:

• Understand the meaning of pre-loss condition: Pre-loss condition refers to the state of your property before it sustained any damage. For example, if your car was involved in an accident, the pre-loss condition is how your vehicle looked right before the collision.
• Gather evidence of pre-loss condition: Inspect your property thoroughly and document its condition. You can use sources like an inspector's report, a recent house assessment, the original house plans, or documentation from contractors who have worked on your property. For a vehicle, document its age, mileage, overall condition, any pre-existing damage, and maintenance records.
• Determine the financial impact: Calculate the costs associated with restoring your property to its pre-loss condition. This includes the cost of repairs, replacements, and any other expenses necessary to get your property back to its previous state.
• Provide detailed information to the insurance adjuster: When meeting with the insurance adjuster, be sure to provide them with all the documentation and evidence you have gathered. This will help them understand the pre-loss condition of your property and the costs involved in restoring it.
• Be thorough and accurate: Make sure that all relevant information is included in your documentation. The absence of information can result in lower estimates from the insurance adjuster. Go over your policy to ensure you understand what is covered and what proof is required.
• Seek independent assessments: If necessary, consider hiring an independent adjuster or a public adjuster to get a separate estimate for your property damage. This can provide leverage in your negotiations with the insurance company.

Remember, the goal of insurance is to restore your property to its pre-loss condition, so documenting and proving that condition is essential to receiving a fair settlement.

Contact your insurance adjuster or company

If you feel that your insurance adjuster's estimate is too low, you can take the following steps when contacting your insurance adjuster or company:

• Understand your insurance policy and coverage: Before disputing a low estimate, it is important to thoroughly review your insurance policy. Familiarize yourself with the terms, coverage limits, and any exclusions. This will help you identify if there are any discrepancies or missing items in the adjuster's estimate.
• Document your pre-loss conditions and costs: Create a detailed record of your property's condition before the damage occurred. This can include an inspector's report, a recent house assessment, original house plans, documentation from contractors, and purchase orders for any improvements. Additionally, document the costs associated with repairing or replacing the damaged items. This will help support your claim and demonstrate the financial impact.
• Provide additional evidence: Gather and submit any relevant evidence to support your claim. This can include photographs, videos, witness statements, police reports, medical documentation, and receipts. This additional evidence will strengthen your case and help justify a higher estimate.
• Request a re-evaluation: Contact your insurance adjuster or company and politely request a re-evaluation of the estimate. Provide any new proof or supplemental information that you have gathered. Ask them to reassess the property damage and consider any items that may have been missed or underestimated in the original estimate.
• Inquire about the calculation: Ask the insurance adjuster to explain how they calculated the estimate. Inquire about the specific items included and excluded, and the reasoning behind their valuation. This will help you identify any discrepancies or errors in their assessment.
• Negotiate and provide counteroffers: If you disagree with the insurance adjuster's estimate, don't be afraid to negotiate. Provide well-researched counteroffers, supporting evidence, and detailed explanations for why you believe the estimate should be higher. Remember to remain professional and polite throughout the negotiation process.

Remember, it is important to stay organized, thorough, and persistent when dealing with insurance adjusters and companies. Keep detailed records of all communication, evidence, and documentation related to your claim.

Consider an independent adjuster

If you receive a lowball estimate from an insurance adjuster, one option is to consider hiring an independent adjuster. An independent adjuster is not directly employed by an insurance company but is hired by an insurer when a claim is made, providing third-party objectivity and greater perceived fairness to those filing a claim.

Independent adjusters are typically hired because there is a high volume of claims. For example, in the aftermath of a natural disaster, the number of homeowner claims can increase substantially. In such cases, insurance companies often do not have the human resources to handle the workload and will hire independent adjusters to ease their burden.

Independent adjusters are required to comply with the license requirements of the state in which they perform their work. They can work as independent contractors or employees of a claims-handling company.

If you hire an independent adjuster, they will assess your property damage and provide a separate estimate. This new assessment can either confirm the accuracy of the low offer or provide you with leverage in negotiations. If the estimate is higher, you can contact your insurance claims manager and ask them to re-evaluate your case.

Speak with an attorney

If you've exhausted all other options, it may be time to speak with an attorney. Attorneys typically charge a contingency fee of 33% to 40% of the settlement amount, so it's important to consider this option carefully. However, if you feel that you have been treated unfairly by the insurance company and that they are not offering you a fair settlement, an attorney can help you negotiate and advocate on your behalf.

When choosing an attorney, look for someone with experience in insurance claims and personal injury cases. You can often find law firms that offer free consultations, which can be a great way to get an initial assessment of your case and understand your options. During your consultation, be sure to ask about the attorney's fees and costs so that you can make an informed decision.

It's also important to remember that you have the right to dispute a low settlement offer. You can start by contacting your insurance claims department and requesting that the adjuster inspect your property again. You can also bring in a third-party adjuster to assess the damage for a second opinion. If the estimate is higher, you can ask the insurance company to re-evaluate your claim.

Throughout the process, it's crucial to document everything. Keep records of all communication with the insurance company and the adjuster, as well as any evidence of the damage and its impact on your life. This can include photos, videos, witness statements, police reports, medical documentation, and more. This documentation will be essential if you decide to take legal action.

Remember, you don't have to accept a lowball offer from an insurance company. You have the right to negotiate and fight for a fair settlement. If you feel that you are being treated unfairly, don't hesitate to seek legal assistance.

Frequently asked questions