Insurance policies are expensive – and every year you spend a lot of money to buy a promise in case something happens to your home or business. Part of that promise is limits of liability – caps on covered damages – that are described in the Declarations. But, is that all your premium buys? NO.
Because insurance companies have unequal bargaining positions and because we as consumers have no real ability to negotiate terms of an insurance policy, a body of experts in the area of insurance, the National Association of Insurance Commissioners, promulgated fairness rules and suggested states adopt those rules. Most have in one form or another. Some of these rules include:
- Requiring insurance companies to conduct a reasonable investigation;
- Requiring insurance companies to promptly pay for covered damage;
- Requiring insurance companies to give equal consideration for evidence that supports coverage of the claim
- Prohibiting insurance companies from speculating to deny coverage of a claim;
- Requiring insurance companies to pay for claims when liability for that claim is reasonably clear, not cystal clear (giving the benefit of the doubt to the policyholder);
- Prohibiting the insurance company from misrepresenting pertinent facts or policy provisions relating to the covered loss;
- Prohibiting the insurance company from relying on biased experts to undermine coverage or under-scope damages;
- Timely paying covered losses;
- And not compelling policyholders to hire an attorney and file a lawsuit to receive payment for their covered claims.
Just like there are Rules of the Road when you drive your car, these are some of the Rules of the Road insurance companies must follow. Everyone agrees to these rules. The question is, why don’t they and what happens when they don’t?
If the insurance company breaks these rules they could be required to pay for damages IN ADDITION to the covered damages, including damages IN EXCESS of the policy limits. This includes penalties for late payment of the claim (there are deadlines set by the State and contract), attorney’s fees, as well as damages for mental anguish the delay in payment could cause. We just settled a Hurricane Laura case for $70,000 more than the policy limits of the case. The reason for that is because they were late in paying the claim and so owed late payment interest as well as attorney’s fees.
If you feel you have been treated unfairly by your insurance company, you may be entitled to damages IN ADDITION to those covered by the policy. Give our firm a call and we can evaluate your claim for free.