How to Handle a Low Offer from Your Home Insurance Company: Proven Tips & Steps to Take

A lowball offer may be an attempt to take advantage of your inexperience. It might convince you that your claim isn’t legitimate, or that you deserve a reduced payout. Policyholders will often try to find the cheapest labor to match that approved amount. You should be able to hire anyone in that area, not just a jack of all trades. Professional roofing contractors and other general contractors are what you deserve as a policyholder.

Fortunately, there are proven ways to fight back against lowball offers from your insurance company. Keep reading to find out the steps to take after your insurance company’s lowball offer – and proven tips for navigating a low offer from your home insurance company.

Review your Policy

Before challenging your insurer’s offer, it’s best to understand your coverage from front to back.

Review your insurance policy to ensure you understand what’s covered and what isn’t. Make sure you understand any exclusions. Look up any terms you don’t recognize. Know that to maximize your claim, you have to understand the contract between you and your insurance company. This is what your insurance policy is… a contract.

Review your Insurance Company’s Reason for the Lowball Offer

Generally, your insurer will provide documentation to justify the low offer. They may claim certain damages occurred because of an excluded peril, for example, or that other damage was caused by poor maintenance or “wear and tear” on your property due to age.

Review your insurance company’s documentation and compare it to the information in your insurance policy. Is there a justifiable reason for the denial? Most public adjusters know the difference between “wear and tear” and new damages and they know how to prove it to your insurance company.

Document Everything and Re-Approach Your Insurer

To receive a fair amount for your insurance claim, you need to provide evidence of the condition of your property and after the loss, along with the cost of restoring your property to pre-loss condition. If you fail to provide evidence, your insurer may send you a low offer.

Start by listing pre-loss conditions for your home. What condition was your property in before the loss? How much was your property worth before the damage occurred?

To justify the pre-loss condition for your property, use evidence like the following:

• A house appraisal
• A home inspector’s report
• A recent assessment of your property – say, if you just refinanced
• The listing for your home
• The original house plans

Then, document any costs you’ve put into your home – including repairs or renovations before and after the loss:

• Invoices from independent contractors
• Receipts for repair or replacement materials from the hardware store
• Any other costs you paid before the loss to increase the value of your home
• Any other costs you paid after the loss to repair the home to pre-loss condition

Once you’ve organized all this documentation, send it to your insurer. If you genuinely have good evidence of a legitimate claim, then your insurer will struggle to deny or reduce your payout.

Remember: the more evidence you can provide, the better. The trick is knowing when to provide this evidence so that you don’t complicate your claim or cause it to go to the bottom of the pile. Some adjusters get over worked and tend to close the claims that are the easiest to close.

Watch for Warning Signs of a Low Offer

One of the problems with a low offer is that it may not seem like a low offer.

In fact, many insurers dazzle you with a number that seems big in the hopes that you’ll accept the offer and close the claim quickly. In reality, the insurer wants to limit its liability as much as possible.

Warning signs of a low offer include:

1. The insurer failed to sufficiently investigate the claim, taking very little time to determine the facts of the claim.
2. The insurer ignored certain damages or left damaged areas of your home out of their initial estimate.
3. The insurer company repeatedly asks you to accept the offer or tries to convince you that this is the best offer you’ll get.
4. The insurer asks you to get three quotes or estimates from contractors right after a storm or catastrophic event. They will always accept the lowest of the three and that contractor has often underbid the job in order to get your business. They always come back with additional charges later and your insurance company might not approve them, leaving you with an unfinished repair and no additional money to make those repairs.
5. You are unable to hire most licensed and insured contractors that you speak with for the repairs.

3 Dangers of a Lowball Insurance Claim

A lowball insurance claim offer means less money to repair and recover after a loss. However, it can also complicate many aspects of your claim – and even compromise the future of your house.

Some of the dangers of a low insurance company offer include:

• Being forced to cut corners on parts and labor. If your insurer paid $5,000 to repair your roof but your roofer tells you it will be $20,000, then you may be tempted to use cheap parts or labor. Cutting corners on repairs could compromise the structural integrity of your home. Cheap roofers often don’t install the roof correctly and then if there is damage again, the insurance company will deny the claim for an “improper install”.
• Difficulty finding contractors to do the work. If your insurer insists it costs $2,000 to replace your floors but contractors are quoting you $10,000, then you may struggle to find a contractor to do the work. You are often left with unskilled labor and unfinished repairs.
• Paying out of pocket when the insurer should rightfully cover everything. Ultimately, a lowball insurance claim could force you to pay out of pocket for repairs that would normally be covered. You pay for home insurance, and you deserve the payout you paid for.

Other Steps After a Lowball Offer: What Are My Options?

What are your options after a low insurance offer? What can you do to push back against your insurance company?

Step 1) Review your claim. Check your policy’s coverage, then check your claim and the reasons justifying your lowball offer. Before you file a formal dispute with your insurer, you need to ensure you understand everything about your claim from start to finish. There could be a legitimate reason for the denial or lowball offer – like documentation your insurer failed to receive.

Step 2) Ask for your insurer to review your claim. Contact your insurance company’s adjuster and ask them to review your claim. The adjuster may have made a mistake, missed a crucial piece of evidence, or failed to add a certain amount of damage to the claim. The insurer may re-send the original adjuster to your property to review the claim. Or, they could send a new adjuster or a building consultant.

Step 3) File a formal dispute against your insurer. If you’re still unhappy with the way your claim was handled, then file a formal dispute against your insurer. All insurers have a formal process for handling disputes. The dispute process may involve hiring a third party, pushing your claim to someone with higher authority (like a manager), or completing a full review of your claim.

Step 4) Hire your own public adjuster. A public adjuster could double or even triple your insurance payout by spotting items your insurer missed – or deliberately ignored. Public adjusters are trained insurance industry professionals who work on your behalf and represent your best interests. A public adjuster can review your claim, assess damages, write legitimate estimates and negotiate with the insurer on your behalf for a higher settlement.

Step 5) File a complaint with your state. If you’re still unhappy with your insurance company, then file a complaint with state authorities. Each state has its own insurance commission, and this insurance commission handles complaints from insurers across the state.

Step 6) Consider hiring an attorney. If you still haven’t experienced a resolution to your claim, then consider hiring an attorney. An attorney can explain the pros and cons of suing your insurer, along with the likelihood of winning your case. Be prepared to wait for the settlement for over a year in most cases. This should be your last step, when all else has failed.

Hire a Public Adjuster to Fight Back Against a Low Offer

Dealing with all of the steps above can be intimidating – especially if you’ve never dealt with a major homeowners insurance claim before.

Fortunately, help exists in the form of public adjusters.

Public adjusters work on your behalf – not your insurer’s behalf. They negotiate with your insurer on your behalf to obtain a higher settlement.

A public adjuster can:

• Identify the intricate details and coverages of your insurance policy and use your policy language to your benefit
• Provide proof of these damages in a timely fashion to your insurance company to maximize your coverage and payout
• Demand that your insurance company make a full payment for your loss within the time frames allowed by state laws
• Write a valid repair estimate that will include all proper repair methods so that you have enough money to cover skilled labor
• Document everything and manage the rebuilding or repair process to ensure a smooth claim from start to finish

Discover how a public adjuster could help you obtain the highest possible payout for your insurance claim.

Contact ClaimsMate today for a free consultation with a public adjuster.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.