People purchase insurance policies to provide much-needed compensation after car accidents, house fires, natural disasters, and other costly events. But what happens when your insurer denies coverage or underestimates the value of your claim? In this post, an experienced attorney discusses common insurance disputes and how to handle them.
What Is an Insurance Dispute?
While you may not have thought of it this way, an insurance policy is a contract. You agree to pay your premiums and follow certain procedures, and the insurer agrees to cover certain property damage, bodily injury, or business interruption expenses.
A dispute may arise when an insurance company fails to uphold its end of the agreement. Insurance disputes often concern the following types of policies:
- Homeowners’ insurance
- Flood coverage
- Commercial property insurance
- Business interruption coverage
- Life insurance
- Disability insurance
- Health insurance
- Medical payment coverage
- Uninsured motorist coverage
- Cyber liability insurance
- Workers’ compensation insurance
Common Reasons for Insurance Disputes
Insurance disputes can arise for any number of reasons, from simple misunderstandings to willful misconduct. Despite their legal obligations to policyholders, insurance companies are large businesses looking to make a profit. That means they may seek ways to avoid making large payouts.
Examples of common insurance disputes include the following:
- Claim denials
- Insufficient settlement offers
- Incorrect coverage determinations
- Excessive documentation requests
- Policy interpretation issues
- Unreasonable payment delays
- Increasing premiums or changes in policy coverage
- Failure to notify policyholders of lapsed coverage
- Cancellation of policies without notification
Commonly Disputed Insurance Provisions
Experienced insurance lawyers know insurance coverage disputes often revolve around certain policy provisions.
One example is multiple-coverage clauses. Sometimes, a single incident triggers multiple policies. In these cases, Texas policyholders have the right to select which policy they use, avoiding multiple deductibles for one event. However, disputes often arise over whether the losses came from single or multiple occurrences (for example, natural disasters or construction defects).
Another example is exclusion provisions. Many insurance policies limit or exclude coverage in certain cases, such as intentional misconduct, dishonesty, criminal acts, or discrimination. Hurricane insurance policies may exclude losses due to earthquakes or sewage backups. However, insurers and policyholders don’t always agree on whether the losses were due to an excluded or included reason.
Steps To Resolve Common Insurance Disputes
So, what happens if you find yourself in one of these common insurance disputes? Consider the following options before taking the appropriate action for your circumstances:
Request Help From the State
The Texas Department of Insurance protects consumers against unfair insurance practices. If you have problems with your insurance company, agent, or adjuster, you can request assistance from the agency. Common consumer complaints are about the following:
- How long an insurer takes to respond
- How long an insurer takes to settle a claim
- How much the insurer wants to pay
- Why the insurer is denying a claim the policyholder thought was covered
Contact an Insurance Lawyer
Another option is to seek legal assistance for insurance disputes. Local insurance attorneys can help you appeal a claim, file official complaints, and negotiate with insurance companies.
If needed, they can also help you bring bad-faith insurance claims. When an insurance company shirks its legal obligation to policyholders, it may face lawsuits for acting in bad faith. A bad-faith insurance lawyer can investigate your case, fight for your rights, and pursue payment for your initial claim plus additional compensation.
If you need help with one of these common insurance disputes — or another insurance issue — the experienced legal team at McLaurin Law, PLLC, can help. Call us at 713-461-6500 today or contact us online to schedule a consultation.
