Insurance companies are businesses. Their goal is to increase profits. Sometimes they view settling an insurance claim with the victim of a disaster as a business negotiation. Following a disaster, homeowners may face the following problems:
- Not having enough insurance to cover their losses (also known as “underinsurance”.)
- Delays in getting responses to phone calls, letters or other inquiries.
- Confusion over what’s covered and what’s not
- “Lowball” estimates and settlement offers
- "Hardball" negotiating tactics by insurance company employees
Not every victim encounters all of these problems. Many claims go relatively smoothly and the process works as it is supposed to. But every large loss insurance claim is time-consuming. In California the insurers must comply with “Fair Claim Handling Regulations”, and other laws that tell insurers what they must, can, and cannot do. These laws are in an “Insurance Code” (a fancy name for the book of laws governing insurance). There are also laws in published decisions by Judges. Judicial decisions create laws, in addition to the “code” laws and regulations. Insurance companies are supposed to comply with all three: regulations, statutory law, and case law.
The California’s Fair Claim Handling Regulations are very useful and provide specific rules relating to–
- Deadlines for responding to letters and phone calls
- Deadlines for proofs of loss
- What information your insurance company must give you
You can read and print out these regulations and laws here at the California Department of Insurance website.
Remember: your insurance adjuster may be friendly — but he is not your friend. He is a businessman. If you feel you need to level the playing field, you should contact a lawyer. Many victims are concerned that if they consult a lawyer the insurance company won’t talk to them. Your insurance company has a legal duty to process your claim. That duty persists even if you have a lawyer helping you and even after you sue them. Sure, the adjuster may be reluctant to speak with you if you’ve retained a lawyer. But if you want to maintain communication with your insurer and your lawyer agrees, she can notify your insurer that they’re permitted to continue talking with you directly.