In a perfect world, insurance claims would be filed and paid without hassle. An insurance company would generously and easily provide a payout of full coverage and ensure that their customers are fully compensated for losses and damages. Unfortunately, the world is far from perfect, and customers often have various disagreements or disputes with their insurance providers over settlement and payment. This is when a fire and flood damage lawyer may enter the process to help a client get a fair settlement from his or her insurer.
Difference Between a Lawsuit and a Claim
Sometimes the words “claim” and “lawsuit” are used interchangeably, but it is important to keep in mind the important distinctions between them when working on an insurance case. The claim is your attempt to get reimbursement from your insurance company. You are not suing your insurance company when you do this; you are simply requesting payment for losses or damages according to the policy you hold. A claim does not assume you have a disagreement with your insurer.
A lawsuit is entirely separate from your claim. In fact, you usually cannot file a lawsuit if you accept a claim, and you cannot get compensation on both a claim and on a lawsuit for the same situation in most circumstances. A lawsuit puts you against the insurance company and the insurance company becomes a legal defendant. You may not need an attorney for a claim, although it can be very helpful to hire an attorney in a limited capacity to ensure the settlement agreement is fair. You will need an attorney if you choose to file a lawsuit.
The Importance of Suing Before Settlement
It is very important that you carefully consider your insurance company’s settlement offer. This offer should cover all your expenses for the loss, including possible future expenses. Your policy may have limits on coverage. If your losses exceed these limits, you should at least get compensation up to the limit. Keep in mind that your insurance company is a business. They are looking to pay out as little as possible in compensation. You should not expect a generous or even a complete offer the first time.
If you are not satisfied with the settlement offer, you must be sure to either attempt to renegotiate or file a lawsuit before you accept the offer. If you accept, the vast majority of insurance contracts have clauses preventing you from filing a lawsuit on that claim in the future. You cannot decide after the fact that you didn’t get enough money or that you were entitled to more. This is one reason hiring an attorney to look over your policy and judge the settlement offer is so important, especially for larger claims. Sometimes, merely the presence of an attorney in the discussion will give you leverage and ease negotiations toward a higher settlement offer. Insurance companies generally don’t want to deal with lawsuits.
There are specific instances where you may sue after a claim, but these are very limited. They usually involve some kind of misconduct, illegal activity or improper or vague wording on the part of the contract or policy. It is unlikely you will be in such a situation, but if you have already settled, you can ask an attorney to review your contract for these issues.
Do Not Rely on Your Insurer
While everyone wants to believe their insurance company truly has their interests at heart, this is simply not the case from a business standpoint. You should never rely solely on your insurance company to give you the compensation or be generous with interpreting coverage under your policy. It is to assume your insurer will short change you in one way or another. The insurer may pressure you to settle, and you may be feeling financial pressures of your own, but it is important to proceed carefully.
If you have a large insurance claim, it is important to contact an attorney as soon as possible after filing your claim and receiving your first settlement offer. Unless you are very happy with your settlement offer, an attorney may be used to review the offer for fairness and accuracy. An attorney may also advise you on how to proceed, either by attempting to renegotiate the settlement or file a lawsuit.