Strategies for Negotiating Property Damage Settlements with Adjusters

1. Understand the Policy You Bought (Or Was Bought For You)

2. Understanding the Role of Insurance Adjusters and Pubic Adjusters

3. Understand What’s In Your Claim and Settlement Offer

4. Preparing for Negotiations

5. Appeal Your Offer

6. Consult a Property Damage Lawyer

7. Last Resort: Filing a Lawsuit

Homeowners’ insurance requirements vary by state, but if you have a mortgage, chances are you will be required to carry coverage. This insurance is for your mortgage provider’s protection as much as yours. After all, if your house goes up in flames, it may be difficult for the bank or other mortgage provider to recover their money if you don’t have insurance to cover the loss. However, it can be difficult to navigate the complexities of negotiating your insurance settlement after property damage.

Homeowners’ insurance is supposed to protect you in the event of a loss. However, insurers are always looking for a way to undercut the value of your property. They are looking out for their bottom line more than anything else, and this can leave you more frustrated than ever.

Our property damage lawyers at Steinger, Greene & Feiner are intimately familiar with insurance companies’ tricks and tactics to give you a lowball offer. It may seem like you have no options once they offer their settlement. Luckily, we know how to negotiate with insurance claims adjusters to get fair compensation for the damage done to your home.

Here are some things to keep in mind as you negotiate:

1. Understand the Policy You Bought (Or Was Bought For You)

When you buy a homeowner’s insurance policy, it will typically cover fire, lightning strikes, and other natural disasters (except floods and earthquakes; those usually need to be bought separately). It will also cover personal belongings, like jewelry and collectibles. You may also purchase additional coverage for trees and shrubs on your property, and you may also buy coverage for detached buildings like garages, sheds, and gazebos.

In 2024, if you live in a FEMA-designated high-risk flood zone, your mortgage lender will likely require you to purchase flood insurance. This requirement ensures both the mortgage provider and your property are protected from flood damage, which is excluded from standard homeowners’ policies. The National Flood Insurance Program (NFIP) outlines the regulations regarding flood insurance for high-risk areas.

It’s important to note that if you don’t buy a homeowner’s insurance policy on your own, your mortgage provider may buy a policy for you and charge you for it.

When you file a claim with your homeowner’s insurance provider, it’s essential to know what’s covered. For instance, if you have a $3,000 ruby pendant that was lost in a house fire, but you didn’t list it on your policy, your insurance company won’t reimburse you for it. More importantly, knowing what’s covered gives you a solid leg to stand on for negotiating your settlement with the insurance claims adjuster after property damage.

2. Understanding the Role of Insurance Adjusters and Pubic Adjusters

Insurance adjusters play a crucial role in the claims process, but their objectives are not always aligned with yours. Claims adjusters, who work for the insurance company, aim to minimize the payout by assessing the damage and interpreting your policy in a way that benefits their employer. They will scrutinize every detail to find opportunities to reduce or deny your claim.

Public adjusters

In contrast, public adjusters work directly for you, the policyholder. Their goal is to ensure you receive the full compensation you deserve. Public adjusters are often worth considering when the damage is extensive or when you feel the insurer’s offer is too low. They use their expertise to negotiate a better settlement on your behalf, and typically, their fees are based on a percentage of the settlement amount.

Be aware of the strategies claims adjusters use to minimize settlements. They might delay the process, use complicated policy language, or argue that certain damages are not covered. Some states, such as Florida, have strong bad faith laws in place in 2024, which allow homeowners to sue for damages if the insurer is found guilty of such practices according to Florida Statutes, Section 624.155. By knowing their tactics, you can better anticipate and counter their arguments during negotiations.

3. Understand What’s In Your Claim and Settlement Offer

When you receive your settlement offer, chances are it’s going to be lower than what it should be. We mentioned that insurers send lowball offers because it helps their bottom line, but there’s another reason they do it: They plan on you rejecting the first offer, so they line up a more “reasonable” one.

Ask the adjuster to break down the claim when you get your offer. Make sure to understand all aspects of the offer, as they may cite specific language in your policy to deny certain claims. They may point out different language in your policy that excludes certain damages; have them clarify those exclusions in simple English.

Keep records of everything the claims adjuster tells you, and gather documents that provide evidence as to why the offer is too low (for instance, a quote from an independent contractor for repairing the damage to your home.

It would be best if you were also prepared to question the claims adjuster and negotiate with insurance adjusters in the event your claim is outright denied. Be polite and find out why your claim was denied.

Also, in Florida, insurers must acknowledge, investigate, and resolve claims within 90 days after receiving proof of loss, as required by Florida Statutes, Section 627.70131. This timeframe can provide leverage when negotiating and ensure the insurer follows their legal obligations. So remember about this timeline.

4. Preparing for Negotiations

Before entering negotiations with an insurance company, preparation is critical. First, gather all necessary documentation that supports your claim. This includes photos or videos of the damage, receipts, contractor estimates, and any reports, such as police or fire reports. Collecting this evidence early ensures you have a solid foundation when negotiating your property damage settlement.

Next, take the time to calculate a fair settlement amount. This should be based on repair estimates, replacement costs, and any additional expenses incurred due to the damage. Be sure to distinguish between above-mentioned Actual Cash Value” (ACV) and “Replacement Cost Value” (RCV) in your policy, as this impacts the final payout. ACV factors in depreciation, which may lower your settlement, while RCV provides compensation to replace damaged property without accounting for depreciation.

When presented it with a settlement offer, request a breakdown of how the adjuster arrived at their number. This allows you to identify gaps and challenge any lowball figures they may present.

Know your bottom line. You should enter negotiations with a clear idea of the minimum amount you’re willing to accept. This figure is based on the evidence and calculations you’ve gathered. Having a solid, justifiable bottom line empowers you to stay firm in your negotiations.

5. Appeal Your Offer

One of the most important things to know about property damage claims is that you do not have to accept the initial offer. You still have the power to negotiate and under no circumstances should you accept any insurance settlement offer that you do not believe is fair or that will not cover the costs of repair. While calling your insurance claims adjuster is more convenient, it’s much better to write your appeal; this allows you to create a paper trail of the appeal.

Write a letter to your adjuster explaining why you believe the offer was too low. Include copies of any evidence you’ve gathered, and ask for a response within a specific timeframe, such as five business days. Be polite but direct. Let your adjust know that this offer will not cover your home repairs.

Send the letter via certified mail, so you know exactly when the letter was sent and received, and be sure to send a copy to the adjuster’s supervisor. Though you may be frustrated, especially if you were sent an insultingly low offer, avoid the urge to act on your frustration. Being adversarial can make the whole process much more difficult.

6. Consult a Property Damage Lawyer

If the insurance company refuses to offer a fair settlement, it may be time to get a lawyer involved. An experienced attorney will have quite a few resources at their disposal. One such resource is a professional appraiser. An appraiser will review the damage to your house and any other property to calculate a fair number you should be paid.

The insurance company may also have its appraiser assess the damage. And that’s why you should understand how to negotiate with property damage insurance claims adjusters. An impartial party called an umpire would break any deadlocks between appraisers. It’s important to note that, just because appraisers and an umpire have come to an agreed-upon amount of damages, your claims adjuster doesn’t have to pay that amount.

However, you can hire a property damage attorney to conduct a third-party inspection to evaluate the damage themselves. After all, the insurance company will always try to keep the quote as low as possible; it’s a system that is purely part of their business model, and they must keep costs down. But a third-party inspector can give you a better idea of what you should get back. After you have collected more money, a property damage lawyer will usually provide that inspection for free or as part of the eventual fee collection.

This is where mediation comes into play. During this process, your attorney, a representative of the insurance company, and an impartial mediator will sit down and hash out what you should be paid. All parties must be put down on paper and signed if an agreement is reached. Otherwise, the insurance company can act like mediation never happened if they didn’t like the outcome (meaning the agreement is nonbinding).

7. Last Resort: Filing a Lawsuit

If everything else fails, filing a lawsuit may be necessary. While legal action can be time-consuming, it may be your only option to get fair compensation. However, be aware of the statute of limitations. In Florida, for example, homeowners have five years to file a breach of contract lawsuit for property damage claims, according to Florida Statutes, Section 95.11. Missing this deadline could bar you from seeking legal recourse, so consult your attorney early on to stay within the timeframe.

A lawsuit can be a long process which is why we always recommend that you negotiate with property damage insurance claims adjusters directly.

That’s not to say, however, that we won’t or can’t go to court on your behalf. Our experienced property damage lawyers know how to take on the insurance companies in and out of the courtroom to get you the compensation you deserve. The insurance company may not want to pay you a fair settlement, but we know how to make them open their wallets. When push comes to shove, and you have to make a call to file a property damage lawsuit, be sure you have discussed everything thoroughly with your attorney. Do not leave our details.

Negotiating with property damage insurance adjusters can be a frustrating process, but understanding your policy, keeping meticulous records, and seeking help from professionals can improve your chances of a fair settlement. At Steinger, Greene & Feiner, we aim to settle property damage cases through negotiation whenever possible, but we are ready to fight in court if needed.

Call us today at 800-560-5059 or contact us online today for a free, no-obligation consultation. We’re on your side.