Homeowners Insurance – Negotiation, Mediation, Limitations
After you file a Homeowners/Renters Claim the insurance company must respond promptly to your claim.
For dwelling and personal property loss claims, the insurance company prepares a scope of loss, which aids it in determining what property is damaged, how the property was damaged, and how much it may cost to repair or replace the damaged property.
You should have an independent scope of loss prepared. Hire a contractor to observe the damaged real property and provide a scope of work and a bid of how much it will cost to repair. If personal property has been damaged, hire or consult with an expert about its current value and/or the cost of having it replaced.
If an agreement between you and the insurance company is reached at this point, the insurance company will either pay your claim or pay someone to repair or replace the damaged property.
For liability claims, the insurance company will determine whether the suit against you is covered by the policy. The insurance company may agree to represent you, but only with a “Reservation of Rights.” This means that the insurance company is not necessarily agreeing that your lawsuit is covered under the policy. Therefore they may not pay a judgment or settlement. In addition, you may later be asked to reimburse the insurance company for any legal fees incurred in your defense.
If this happens there may be a “Conflict of Interest” between you and the carrier. This means that the attorney chosen by the company to represent your and the insurer’s interests may be representing competing interests. In such a situation you may want to ask the insurance company to appoint a separate independent attorney who represents ONLY your interests.