Insurance Claim Red Flags: How to Spot a Lowball Offer

Most importantly, a lowball offer could also cause you to leave thousands – even tens of thousands – of dollars on the table.

Lowball offers are more common than you think. Insurers are for-profit companies, and adjusters are often trained to settle claims for as little as possible.

Recognizing the red flags of a lowball offer can help you protect yourself, push back, and ensure you get the payout you paid for.

Red Flag #1: A Quick, Pressure-Filled Settlement Offer

If your insurer rushes to send you a check within days of your claim, before a full inspection could have reasonably been completed, that’s often a red flag.

A fast offer might seem convenient, but it’s often strategic. The insurer may hope you’ll accept a smaller amount before discovering hidden damage or understanding your full coverage.

Watch out for:

• Adjusters encouraging you to “sign off” quickly
• Promises that this is “the best we can do”
• Refusal to discuss claim details, investigate further, or provide thorough documentation

What to do instead:

• Take your time. Ask for a complete breakdown of how the insurer calculated the offer. Don’t accept payments labeled as “full and final” unless you’re confident it covers all your losses. Scan your property for hidden damages and consider asking an expert – like a public adjuster or contractor – for a fair evaluation.

Red Flag #2: The Estimate Doesn’t Match the Damage

One of the clearest signs of a lowball offer is when the repair estimate doesn’t match reality.

If your roof was destroyed by hail, for example, and your repair estimate only includes funds for minor patchwork, your insurer could be undervaluing your claim.

Common tactics include:

• Ignoring code upgrades
• Omitting line items (like labor, disposal fees, or permits)
• Using outdated or cheap materials in estimates
• Underestimating square footage or replacement costs

What to do instead:

• Get an independent contractor to provide a detailed repair estimate reflecting the real, actual, up-to-date cost of repairs in your area. Then, use this estimate to challenge your insurer’s estimate.

Red Flag #3: The Adjuster Doesn’t Fully Inspect the Damage

Sometimes, your insurance company’s adjuster only does a cursory inspection of the property before leaving. They might walk around for a few minutes, glance at damage, and start their report.

Some insurers deliberately use visual inspections or drive-by assessments to cut corners. They know there are structural issues, interior damage, hidden damage, and underlying problems (like mold and water infiltration), and they don’t want to discover these damages through a larger inspection.

What to do instead:

• Request a full, on-site inspection. Document all damage with photos and videos. If you suspect your insurance company’s evaluation of the claim is incomplete, seek a second opinion from a public adjuster or contractor.

Red Flag #4: The Insurer Uses Confusing or Vague Language

Many insurers know you’re not an insurance expert. Sometimes, they use your inexperience against you, justifying a lowball offer with jargon and legalese.

Insurers may vaguely point at parts of your claim and say things like:

• This is depreciation
• That’s not covered under your policy
• Your damage is cosmetic

When you ask for clarification, your insurer can’t show you exactly which part of your policy supports this decision.

What to do instead:

• Ask for everything in writing. Request the specific policy clause or exclusion being cited. If the insurer can’t back up their reasoning, it could be a sign they’re trying to discourage you from pushing further.

Red Flag #5: The Insurer Blames You for Damage

Some insurers shift blame to the policyholder. By blaming you, they warm you up to a lowball offer. After all, you may not be entitled to a full payout if it was your fault, right?

Some of the ways an insurer could blame you for the loss include:

• Wear and tear
• Negligence or lack of maintenance
• Pre-existing conditions

These arguments are often subjective, and insurers may use them to reduce or deny payouts.

What to do instead:

• Keep records of home maintenance, inspections, and repairs. The more documentation you have, the harder it is for an insurer to claim you’re at fault.

Red Flag #6: Repeated Delays & Requests for More Info

Sometimes, insurers send a lowball offer after months of stalling.

Maybe a fire has forced you out of your home. You’re sick of living at a hotel or in a family member’s basement. You’re tired of tracking additional living expenses. You and your kids just want your home back.

The insurer might ask for:

• Repeated forms
• Additional documentation you already sent them
• Endless “re-inspections” of the property

Your insurer likely knows you’re desperate and might accept a lower payout.

What to do instead:

• Document every communication. Per state law, your insurer must respond to communication within a reasonable timeframe (typically 30 to 60 days or up to the interpretation of “reasonable” by a judge). If you feel your insurer is dragging its feet, file a formal complaint with your state’s Department of Insurance. Or, contact a public adjuster to advocate on your behalf.

Red Flag #7: The Settlement Barely Covers Your Deductible

One classic insurance tactic is to send a settlement offer that barely covers your deductible.

If your deductible is $2,500, for example, your insurer may offer a payout of $3,000. It’s a strategic way to close a claim cheaply – and it’s barely enough to fix anything.

What to do instead:

• Ask for a detailed justification of the insurer’s lowball offer, including a scope of loss and justification for each item. Compare these numbers with independent estimates to verify their accuracy.

How to Push Back Against a Lowball Offer

We’ve published a detailed tutorial on pushing back against a lowball offer here.

Some of our best tips and proven steps include:

1. Review your policy thoroughly – or have an expert go over it with you. Understand your coverage limits and exclusions. Understand what’s covered and what’s not. In many cases, your insurer won’t point out extra covered damages unless you specifically mention them.
2. Get independent estimates. Talk to contractors, engineers, public adjusters, or other experts who can independently and objectively assess the damage, then provide their analysis.
3. Request documentation. Get a copy of the insurer’s estimate and any supporting documents they used to calculate your payout.
4. File a formal appeal. Most insurers have an appeal process. Use it. Justify your appeal with evidence – like the third-party estimates mentioned above and additional documentation.
5. Hire a public adjuster. A public adjuster works for you, not the insurance company. Public adjusters understand how insurers lowball policyholders. They also understand how to avoid these lowball tactics.

Insurance claims can be complex. Insurers use this complexity to their advantage. They know many policyholders don’t fully understand their coverage, giving them room to lowball.

Schedule a no-cost consultation with ClaimsMate. We know the tactics insurers use – and how to fight back – to ensure you get a fair payout.

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.