Sedona Insurance Law Blog

Fire insurance: A primer for Californians

Californians have only recently begun to piece their lives back together after last fall’s spate of wildfires spread property damage throughout the state. There are many serious tasks to deal with, such as finding a new place to live and recovering lost property. Another important step that wildfire victims will have to take care of is filing a fire insurance claim.

Fire insurance is a topic that is confusing for many policyholders. Is fire insurance included with homeowners’ insurance? Will it cover the damage caused by wildfires? Let’s take a look at some of the basic tenets of fire insurance.

Tips for getting a fair insurance payment for wildfire damages

You have lost your home to the devastation of the recent California wildfires, and you are wondering what to do next. One of the biggest questions on your mind is probably how to file an insurance claim and receive the payment that you need to rebuild your home. Like most policyholders, you probably anticipate that your insurance provider will offer you a settlement that is large enough to rebuild your house and replace your possessions. But this is not always the case. As we discussed in a recent post, insurance companies do not always play fair with their clients.

Although insurance companies frequently try to lowball their policyholders, there are some things that you can do to try to receive a fair settlement. These are a few tips that you can use to get your insurance provider to give you a fair payment regarding your wildfire-related damages.

Insurance won’t always cover wildfire-related claims

When 2017’s wildfires ripped through California, hundreds of thousands of policyholders trusted that their insurance policies would provide adequate coverage for the damage. Unfortunately, many Californians are finding out the hard way that insurance companies do not always come through for their clients. Even if a policy provides coverage for fire damage, an insurance company will not always honor it.

There are several ways in which insurance companies try to evade paying their fair share of fire-related damages. It is important for consumers to recognize and understand these reasons when they are dealing with their insurance provider. To help you, we have compiled some of the most significant ways that insurance companies try to evade wildfire claims.

What are some examples of bad faith insurance claims?

When you purchased your insurance premium, you no doubt believed that your insurance provider would cover your damages in the event of a crisis. After all, the purpose of insurance is to protect your finances in the event that some costly event—a natural disaster, an injury, a lawsuit—should occur. But now, one of those unfortunate incidents has affected you, and your insurance provider has denied your claim.

You may feel bewildered. After all, you are certain that your claim is valid—why would your insurance provider deny it?

Know the fundamental duties your insurance provider owes you

When you purchase an insurance policy, you do so to protect your finances in the event of a catastrophe. Unfortunately, insurance companies do not always act in the best interests of their clients. An insurance provider will sometimes offer less compensation than necessary, or deny a claim entirely.

If you have filed a claim with your insurance company only to have it denied, you may feel powerless. Claimants in this situation often believe that their insurance provider has the final say in the matter, but this is not true. You may not realize it, but you are entitled to have your insurance company provide several duties to you. If a company should violate any of these duties, it may constitute bad faith—and necessitate a lawsuit.

Arizona dad gets $6.5 mill in bad-faith disability insurance suit

If you suffer an injury that impacts your cognitive abilities and psychological wellbeing, it can knock you down in a big way. It can completely debilitate you, leaving you unable to work or function as normal. In such scenarios, you depend on your disability insurance to have your back.

Such was the case for the 40-something father of two when a traumatic brain injury caused him to suffer from a serious form of depression resulting in anxiety, suicidal thoughts and multiple rounds of hospitalization. He filed a claim with his disability insurance company, which proceeded to give out monthly payments to their client.

How insurers deny long-term care insurance claims

As more Baby Boomers continue to retire, long-term care insurance providers have to pay out claims for a large pool of customers. As a result, they may try to mitigate costs by not paying out all that is due.

There are several ways they may attempt this. They could deny coverage by claiming a long-term care facility is not covered in the plan, which may be true – plans written in the 1990s were written differently today. Regulation of the long-term care industry is more stringent now than it used to be, back when many of the current policy holders looking for payouts were purchasing plans. 

What happens when my auto insurance won’t pay?

Question: I was in a car accident. A car in front of my overshot a driveway and then backed up to try and get into it. I tried to get out of their way, but they ended up hitting me and then lying and said I hit them. I had a witness, but the insurance companies said it doesn’t matter—they say she changed her story. What can I do?

Answer: Your policy with your auto insurance company is a legal contract. As such, there are things you are required to do—for example pay your premiums on time, etc., and in return the company is required to honor their part of the contract—which is to pay your claims.

My insurance company won’t pay my fire claim—now what?

Question: My house recently suffered fire damage. My daughter’s bedroom was essentially destroyed, and the rest of the house has smoke damage. Our insurance company has rebuilt her bedroom, but is balking at taking care of the smoke damage in adjacent parts of the house. Do I have any recourse?

Answer: The policy you have with an insurance company is a legally binding contract. Therefore, you are required to fulfill certain obligations—being truthful on your application, pay your premiums on time, etc. In turn, your carrier is required to cover your losses when you file a claim.

Storm damage? Make sure you get all the compensation you are owed

In the last few months, the number of storms and natural disasters is extraordinary. It seems like there is no end to the damage—from Puerto Rico to Texas and Florida to Mexico, many folks have endured extreme devastation to their homes and other property. As a result, insurance companies have been flooded with new claims.

What happens, though, when your insurance company decides not to make good on your claim? If you’ve paid your premiums and kept your policy up to date, can your insurance company just decide not to pay?

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