Insurance Claims: How to Get What You're Owed

Insurance companies are in the business of collecting premiums, not paying claims. When you file a claim, adjusters are trained to minimize payouts. The National Association of Insurance Commissioners (NAIC) provides consumer resources to help policyholders understand their rights and fight unfair claim practices.

This guide covers how to document and file insurance claims, challenge denials and lowball offers, use appraisal clauses, file bad faith complaints, and know when to hire professional help.

Common Types of Insurance Disputes

Property Insurance (Homeowners/Renters)

• Water damage claims denied
• Fire or smoke damage undervalued
• Theft claims disputed
• Storm damage denied as "excluded"
• Mold claims rejected

Auto Insurance

• Total loss value disputes
• Diminished value not paid
• Rental car coverage denied
• Medical payments delayed
• Uninsured motorist claims

Health Insurance

• Claim denied as "not medically necessary"
• Out-of-network coverage disputes
• Pre-authorization issues
• Emergency room coverage denied

Why Claims Get Denied

Insurance companies commonly deny claims for:

• Policy exclusions: Claiming damage isn't covered
• Lapsed coverage: Claiming policy wasn't in effect
• Late filing: Claiming you didn't report timely
• Pre-existing conditions: Claiming damage existed before
• Insufficient documentation: Claiming you didn't prove loss
• Misrepresentation: Claiming you provided false information

Step-by-Step Claims Process

Step 1: Document Everything

• Report claim immediately
• Take photos and video of all damage
• Keep damaged items until claim is resolved
• Get repair estimates from multiple contractors
• Save all receipts for expenses incurred
• Document all communications with insurance

Step 2: Review Your Policy

• Read the specific coverage provisions
• Understand your deductible
• Check policy limits
• Review exclusions carefully
• Know your duties after a loss

Step 3: Submit a Complete Claim

• Provide detailed written description
• Include all supporting documentation
• List all items damaged/lost with values
• Submit multiple estimates
• Keep copies of everything you submit

Step 4: Work with the Adjuster

• Be cooperative but careful
• Don't sign anything without understanding it
• Don't accept the first offer if it's low
• Request written explanation of any denial
• Take notes during all conversations

Challenging a Denial or Low Offer

Request Reconsideration

Send a written request that includes:

• Reference to your policy number and claim
• Specific reasons you disagree with the decision
• Additional evidence supporting your claim
• Citation to policy language that supports coverage
• Request for specific response within deadline

Formal Appeal

Most policies provide an appeals process:

• Follow the exact procedure in your policy
• Meet all deadlines (typically 30-60 days)
• Submit all additional evidence
• Request review by different adjuster

File a Complaint

If internal appeals fail:

• State Insurance Commissioner: Regulates insurance companies
• State Attorney General: Consumer protection division
• NAIC (National Association of Insurance Commissioners): Central database

Bad Faith Claims

Insurance companies may be liable for bad faith if they:

• Unreasonably deny valid claims
• Fail to investigate properly
• Misrepresent policy provisions
• Delay payment without reason
• Lowball claims to force settlement
• Refuse to defend covered lawsuits

Bad Faith Remedies

• Full amount of original claim
• Consequential damages
• Emotional distress damages
• Punitive damages (in some states)
• Attorney fees

Using Appraisal Clauses

Many policies include appraisal provisions for value disputes:

• Each side hires an appraiser
• Appraisers select an umpire
• Any two agreeing sets the value
• Binding on both parties
• Often faster than litigation

When to Hire a Professional

Public Adjusters

• Represent you in claims process
• Typically charge 10-15% of settlement
• Useful for complex property claims

Insurance Attorney

• For denied claims or bad faith
• Often work on contingency
• Can file lawsuits against insurer

Insurance Consumer Resources

These federal and state agencies can help with insurance claim disputes:

• State Insurance Commissioners — Each state regulates insurance companies and handles consumer complaints
• Consumer Financial Protection Bureau — Resources for understanding insurance products and filing complaints
• USA.gov Insurance Resources — Federal directory of state insurance regulators and consumer help
• FTC Insurance Information — Federal Trade Commission guidance on insurance scams and unfair practices

Frequently Asked Questions

How long does an insurance company have to pay a claim?

Most states require insurance companies to acknowledge claims within 15-30 days and make payment decisions within 30-45 days after receiving all necessary documentation. If your insurer consistently delays without explanation, this may constitute bad faith.

What is insurance bad faith and what can I recover?

Bad faith occurs when an insurer unreasonably denies, delays, or undervalues a valid claim. Remedies vary by state but can include the full claim amount, consequential damages, emotional distress damages, punitive damages, and attorney fees—potentially far exceeding the original claim value.

Should I accept the first settlement offer?

Usually no. Initial offers are typically starting points for negotiation, not final positions. Document why you believe the offer is inadequate, provide supporting evidence (repair estimates, medical bills, comparable values), and submit a counter-demand with a specific dollar amount.

When should I hire a public adjuster vs. an attorney?

Public adjusters handle the claims process and are best for complex property damage claims. Insurance attorneys handle denied claims, bad faith situations, and litigation. For straightforward disputes, try appealing yourself first. For denials or suspected bad faith, consult an attorney—many work on contingency.