When you buy or rent a house, you have taken out home insurance because you want to protect the property, your furniture, and other personal belongings. You also want to be protected in case someone has an accident on your property. Your policy has comprehensive coverage, so if you face a disaster, you will only have to pay a reasonable amount out of pocket.
If you have a mortgage, your bank can determine how comprehensive your policy should be, which will affect the cost and, as a result, also how much you will have to pay as a deductible in each claim or loss case. You also understood that you can choose between the option of insuring your home based on the replacement cost or its current cash value. Each policy protects against a specific number of events that may cause damage to your property.
You are at peace until…
One day you come home and discover that a pipe burst in your bathroom. The damage is not only there, but the water has run into your room and ruined the carpet and furniture. It has also entered your closet and wet all your shoes, which you can no longer use. Just thinking about the fans and dehumidifiers you will have to set up and the cost of the electricity you will have to pay keeps you awake at night!
Or maybe it happens that someone (no one in your family wants to say who) leaves the stove on to answer the phone, and soon flames jump from there to a curtain, and your house starts to burn. You run to put out the fire, but the damage is already too great.
That is, after several years of faithfully paying your installments to keep the insurance active, the day you never ever hoped would come has finally arrived: you have suffered a disaster and need your insurer to respond. Surprise! Your insurer doesn’t pay you on time, or maybe they don’t pay you the amount you expected, or perhaps they tell you that certain things that have been damaged are not covered by the policy. What path can you follow to claim what you consider fair?
When you buy an insurance policy, you expect to be protected within the policy limits. However, one may get involved in a dispute with the insurer when they deny a claim or do not pay the full amount of damages.
An insurance company has a duty to act in good faith by paying legitimate claims within a reasonable amount of time (within policy limits). The insurance company may be acting in bad faith when they deny your claim, take too long to process it, or do not pay the full amount of the claim (within policy limits). If it can be determined that the company acted in bad faith, then they can be sued.
Of course, just because an insurance company refuses, doesn’t pay enough, or delays the claim process doesn’t automatically mean they are acting in bad faith. It may be determined that there was only a breach of contract, and if so, they would have to pay the fair value of the claim. To prevail in a bad faith lawsuit, it must be proven that the insurance company acted unreasonably in refusing, not paying enough, or took longer than necessary to investigate or handle the claim.
When it has been proven that the insurance company acted in bad faith, the recoverable compensation could be substantial. This could include the actual amount of damages from the claim plus additional related costs incurred due to the denial, attorney fees, and punitive damages.
If this has happened to you, we recommend seeking the help of a qualified lawyer to handle the lawsuit against your home insurance company.
If your home has suffered damage and you need to file a claim for damages to your home, call the Law Offices of Jose M. Francisco to guide you in your rights to file your claim against your insurance company.