Ten Tips: How To Make Your Claim Easy to Pay

Follow these ten tips to get your property/home damage claim paid faster and in full. Your insurance carrier receives hundreds of claims, many of which are similar to yours. As the claims come in, the insurance company triages each claim and categorizes them as easy to pay, deny, investigate, or litigate. Most companies would challenge this characterization of their triage process as overly simplistic. Insurance carriers handle each claim individually based on the policy language, the facts of the loss and the law that applies. Regardless, your job is to get your claim into the “easy to pay” category as soon as possible. You cannot eliminate the need for the company to investigate or adjust the claim, but by following these ten tips, your claim will be paid fully in the shortest time possible.

1) Review your policy
Make sure you have a copy of your policy including the declaration page before your loss occurs. Confirm that the policy was in force on the date of loss. The coverage period is clearly listed on the declaration page. The “dec” page also includes a summary of your coverage, types of coverage and the deductible. Determine if your policy is a typical “all risk” policy or the more limited, “named peril” policy. If it is a named peril policy, review the perils covered to make sure your loss was caused by a named peril. Named perils generally include wind, hail, fire, smoke, lightning, theft, vandalism, and others. If your personal property was damaged, many policies, even an “all risk” policy, provide coverage for contents on a named peril basis. Make sure you know the specifically named peril that caused the damage to your personal property. Determine whether your policy provides replacement cost coverage or actual cash value, which is less. Again, damage to the structure and damage to personal property/contents require a different analysis. Finally, review the exclusions. Even if your loss appears to be covered, it may be subject to a specific exclusion. Knowing what is covered and what is excluded, before you report your claim, helps you present your claim in a way that avoids exclusions and makes it easier for your insurance carrier to allow coverage and pay the claim.

2) Identify the cause of loss
Once you understand what is covered, not covered, and excluded, you are ready to tell clearly your insurance company the cause of loss and to avoid unnecessary discussions about possible exclusion. For example, many policies require an opening in the roof, windows or walls caused by a covered cause of loss before it will consider payment for interior damage caused by wind or hail. If you are reporting a hail damage claim to your roof with interior water damage caused by the now leaking roof, make sure you can describe how and where the hail created an opening in the roof that allowed water to leak in and damage the interior.

3) Identify the date of loss
Be specific. If the damage is caused by a weather event such as wind, lightening, or hail, make sure you know the exact date of the storm that caused the damage. Localized weather reports are available on-line. If the damage was caused by water from a broken pipe, be prepared to describe when the pipe broke. Keep in mind that damage from a slowly leaking pipe is generally not covered, but damage from a broken pipe that results in water are suddenly gushing out is covered. If you discovered the damage to your house when you returned home after an absence and were unsure of the exact date of the loss, report the date of loss as the date you first noticed the damage. Usually, when you first report a claim, the initial company intake is handled by a customer service representative who has the limited responsibility of gathering basic information and writing down exactly what you say before routing the claim to the actual file handler. So be careful how you described the loss (See #s 1 and 2 above) and be precise regarding the date of loss.

4) Report the claim promptly
The faster, the better. However, you should follow steps one, two and three before you report the claim. So it is critical to keep you insurance documents in a place that is readily accessible after a loss. Many claim problems are created by an insured who reports the loss before reviewing their coverage, determining the date of loss and before considering any possible exclusions. None the less, it is critical to report the loss within a day or two of the reported date of loss. Few things alert an insurance company to move your claim from easy to handle and pay for increased scrutiny and delay more than a late report. A late report can be anywhere from a week to several months depending on the circumstances. Many claims are denied outright, even for a covered cause of loss, based on the insured’s failure to promptly report the loss.

5) Photograph or video the damage immediately
Your insurance company will inspect the damages for themselves. They will arrange for an inspection of your property within a couple of days after you report the loss. The purpose of their inspection is to meet and talk with you, inspect the damage and lay the ground work for estimating the amount of the damage. In other words, they are double checking the cause of loss, evaluating your truthfulness and looking for possible exclusions. If the inspection is more than a few days after the date of loss, chances are the damages do not look as severe as they did when you first saw the damage. For example, in a water loss, by the time the company inspects the property, you have probably mopped up the water, dried out the house and maybe even thrown out carpets or rugs. While you are required to take steps to mitigate the loss, doing so makes it harder for the insurance adjuster to appreciate the full severity of the loss. If you have videos or photos taken while the water was still on the floor and the rugs soaking wet in place, it helps the adjuster understand the full extent of the damage. If a water mitigation company puts in dehumidifiers and blowers, take pictures of them as well. Adjusters are experts at looking at residual damage and understanding the damage on the day of loss, but why not make it easy for them by providing a little extra help with some photographs taken on the day of the loss?

6) Show all damage during the home inspection
Avoid the need for a re-inspection. You should already be familiar with all the damage was done by the loss before you report the claim. However, before to the adjuster inspects your home, it is a good idea to inspect carefully all parts of your property for additional damage related to the loss. That way you will be prepared to show the adjuster, not just the obvious damage, but also items of less obvious damage. While supplemental claims are routine, extra damage added to a claim later alerts the company that close investigation is needed, and payment may be delayed. On the other hand, if you think there may be damage to the wall behind the washer dryer you should point that out to the adjuster. Then, when you later add replacement of that wall to your claim, the company will more easily accept the supplement than if you had not pointed it out.

7) Keep all receipts and document cash payments
Avoid paying cash if you can. If you must pay in cash, get a receipt, or at the very least, write down whom you paid, how much, and for what. If you need to rush out to Home Depo and buy emergency supplies such as a tarp to cover a damaged roof, plywood to cover a broken window or mops and cleaning supplies, pay for the items separately from general, non-loss related purchases. Do not put the insurance company in the position of scrutinizing your receipt to single out the general purchases from the emergency supply purchases lumped together on the same receipt. At best it creates extra work for the adjuster and at worst it makes them suspicious, and your claim gets flagged for potential exhaustive investigation, both of which will delay payment. Most importantly, send your receipts to the insurance company. Keep track of what information you sent and when. Keep copies of everything you send them in case you need to send them in the second time. Occasionally a company will lose documents. Rather than argue with them about what you already sent in, simply send them fresh copies. This makes your claim easy.

8) Give a recorded statement
A recorded statement is different from an Examination Under Oath (EUO). If your company wants to take your EUO, your claim has already been characterized as difficult with intense investigation and delay before payment, if any. A recorded statement is usually a routine initial step in the claim adjustment process. If you have carefully presented your claim based on steps 1, 2 and 3 above, you are prepared to give a recorded statement. Often the recorded statement is taken during the home inspection. You should consider the home inspection recorded statement like a job interview. You want to make your best impression, sound intelligent, truthful and eager to cooperate. Dress appropriately. This is your chance to move your claim into the easy to handle and pay category. During the recorded statement, the adjuster will be working from a script of prepared in advance generic questions that are asked in all similar claims. Answer briefly, honestly and without opinion or speculation. Don’t say, “I don’t know what happened, I just came home, and there was water everywhere.” Do say, “I came home, and water was everywhere, I turned off the main water supply and then discovered that the supply line to the kitchen sink suddenly broke.”

9) Acknowledge receipt and respond to all communications
Insurance companies are usually required to respond to any claim question you have in 14 days. You should do the same with them. After you report the loss, the adjuster assigned to your claim will probably contact you the next day. The adjuster may want to take your recorded statement over the telephone during that contact. You should agree. A delayed recorded statement alerts the company that you may not be sure of the details of the loss. If you are not sure, the adjuster is free to come up with an after the fact opinion which may allow the company to use an exclusion to deny your claim. The adjuster will likely want to schedule the home inspection. You should agree to the adjusters proposed date. This makes your claim, “easy”. After the home inspection, you will likely receive a “proof of loss” form from the company. On this form, you state the cause of loss and some damages. Keep in mind that insurance companies call this a “sworn proof of loss” because you swear to the truthfulness of the report. Remember, you can add damages later, especially if you have laid the ground work (See #6 above), but overstating your damage moves you claim out of the “easy” category. After you provide the proof of loss, you company may ask you for additional documents, information or receipts. Provide them as quickly as possible. Even if you have previously sent them in, send them in again with a gentle reminder that you have previously sent in this material.

10) Avoid including damage not covered or not related to the loss
Be truthful. Your insurance company does not require you to replace a damaged Formica kitchen countertop with a new Formica countertop. However, your insurance company only owes you for the value of a Formica countertop. So if you want to replace the old Formica with a new granite top, the cost difference between Formica and granite is your responsibility, not your company. Adding upgrades, or as known to insurance companies, “betterment” is a sure way to move your claim out of the “easy” category. The same goes for televisions. Don’t list a 65 inch TV on your “sworn proof of loss” if you had a 48 inch TV, even if you paid more for the 48 inch TV than the cost of a new 65 inch TV. If lightening damaged all but three of your electronics (computers, TVs, sound systems, etc.) do not include the undamaged electronics. You not only risk a denial of the undamaged property but also of the entire claim as well.

No Breach of Contract Action Necessary for Bad Faith

Can an insurer be liable for bad faith under §625.155 F.S. after appraisal when there is no underlying breach of contract lawsuit? The 4th DCA, in Cammarata v State Farm allowed the insured to proceed with a bad faith suit although the insured never filed a breach of contract suit. The 4th DCA ruled that resolution of a breach of contract suit in favor of the insured is only one of several alternative prerequisites necessary to perfect a statutory cause of action for bad faith. The opinion determined that an appraisal award in an amount more than offered by the insured, was tantamount to a favorable resolution necessary to proceed with a bad faith action. 

The Cammaratas suffered damaged to their home from the 2005 storm, Hurricane Wilma. State Farm estimated the damage as below the policy deductible. The Cammaratas demanded appraisal. Both parties petitioned the court to appoint a neutral umpire. The umpire issued an award in an amount above the State Farm deducible, but less than the Cammarata’s estimate. State Farm paid the award and the court dismissed the underlying petition to appoint an umpire. The Camaratas then sued State Farm for bad faith.  A breach of contract suit was never filed.

In reaching its decision in Cammarata, the 4th DCA recognized two of its earlier decisions, Lime Bay v State Farm, 2012, and Trafalgar v Zurich, also issued in 2012, were in conflict. To resolve the conflict within it is district, the 4th DCA reviewed Florida Supreme Court decisions from Blanchard v State Farm in 1991 to Vest v Travelers in 2000. Based on this review, the 4th DCA receded from Lime Bay, and confirmed its decision in Trafalgar which held an appraisal award “constitute[d] a favorable resolution of an action for insurance benefits [and] satisfied the necessary prerequisite to filing a bad faith claim”.

Based on  Trafalgar, Cammarata, and the 4th DCA’s understanding of Vest, it is not necessary for an insurance company to breach the conditions of its insurance policy contract in order for an insured to move forward with a statutory bad faith action under §624.155. According to the 4th DCA, the three prerequisite elements necessary to bring a bad faith action are: 1) a determination of the insurer’s liability; 2) the amount of the damages; and 3) satisfaction of the notice requirement of 624.155(3)(a). The 4th DCA understands the Vest decision to mean that the first two conditions may be established when a settlement determines the existence of liability and the extent of the damage.

Eleven of the twelve 4th DCA judges concurred with the en banc Cammarata opinion, with one judge recused. Judge Gerber wrote a special concurring opinion to request the Florida legislature review the court’s decision. Judge Gerber is concerned that the majority opinion creates a slippery slope allowing an insured to seek bad faith damages subsequent to any settlement or alternative dispute resolution including appraisal, when the insurer pays more than its initial offer. He reminds litigators of the Vest decision in which the Supreme Court held that, “The insurer has the right to deny claims that in good faith it believes are not owed on a policy”. (Vest v Traveler’s Ins. Co, 753 So.2d 1289 (Fla. 1991).

The limits of the expansive nature of the Cammarata opinion will be determined by future bad faith litigation. The opinion raises potential issues applicable to any settlement agreement in which the insurer pays more than its initial offer. Whether, and how, the decision applies to negotiated settlements is unclear. Litigators and claims staff should consider the opinion in resolving claims and suits and in drafting releases.  

How to choose the right mediator

No matter the reason for going to mediation; it’s important to have a mediator who is right for your case.  Often, the judge will require mediation before allowing a case to proceed to trial. Sometimes the parties will attempt an early mediation in an effort to avoid significant litigation expense.  Occasionally, parties may wish to mediate for reason other than attempting to resolve the case.

For instance, the parties may wish to mediate to learn more about the strength and weakness of the other side’s case. One party may wish to mediate in order to demonstrate how strong their case is. Or a party may wish to mediate to determine if a settlement is possible in the future, even if not immediately available during the first mediation conference.

Whether you wish to mediate to capture a settlement or to explore the case in more detail, you should be sure and pick a mediator who is right for the case.

In fact, the Florida Supreme Court certifies mediators as Civil, County, Family, Dependency or Appellate Mediators. Be sure your mediator satisfies all the legal requirements and is certified for your type of case. You can easily check the mediator’s credentials at Flcourts.org .

You’ll also want a mediator to be a subject matter expert in the areas of law raised by your dispute. Knowing the law allows the mediator to understand the case and guide the parties to a fair settlement.  For instance, if your dispute involves an insurance policy coverage issue, or a claim that arises out of an insurance claim, you need a mediator who has experience with hundreds of different insurance policies and applied policy language to thousands of different factual situation. If your case involves a dispute between a condominium association and the developer, you don’t want a mediator whose legal career was focused on automobile crash cases.

In addition, you’ll want a mediator who is an expert and experienced with many diverse cultures and individuals. This allows the mediator to understand and appreciate many alternative points of view and to be sensitive to different cultural backgrounds. Don’t miss a reasonable settlement opportunity because your case needed a cultural translator but nobody recognized or knew how the bridge the cultural gap.

The best mediators will help you settle your case, show off the strengths of your case, minimize its weakness and help you learn about the other’s side’s case.

Feel free to contact me if you would like more information on mediation services.

Citizens’ Immunity….The Current State of Law.

The Florida Legislature closed its 2014 session without amending the statutory language creating Citizens sovereign immunity. F.S. §627.351(6) (s). However, various courts have closely examined the statute and reached differing results as to whether its immunity bars a suit against Citizens brought under Florida’s Civil Remedy Statute F.S. §624.155.

The current state of the law is in flux. The 5th DCA determined Citizens is immune from a cause of action under F.S. 624.155. Citizens Prop. Ins. Corp. v  Garfinkel, 25 So.3d 62, 5th DCA 12/18/2009.   However, in January, 2014 in the 1st DCA  the court held that Citizens is subject to a bad faith cause of action, recognized the conflict with the 5th DCA and certified the question as one of great public importance.  Perdido Sun Condo v Citizens, Case No. ID13-1951, 1st DCA Fla. 1/23/2013.  The Florida Supreme Court accepted jurisdiction (SC14-185, 3/26/2014) will now resolve the conflict by addressing the question certified by the 1st DCA


The Supreme Court also stayed the 1st DCA opinion holding that a §624.155 action against Citizens is allowed under the willful tort exception to Citizens statutory immunity until it answers the certified question

In addition to the Garfinkel and Peridido Sun cases, a third case, Citizens Prop. Ins. Corp. v San Perdido 104 So.3rd 344 Fla. 11/15/2012 is related to the issue of Citizens Immunity.  In San Perdido, the Florida Supreme Court held that the trial court’s order denying Citizens’ motion to dismiss a §624.155 action was a non-final order and not reviewable until the conclusion of the bad faith action.

In summary, interested parties are awaiting the pending Supreme Court opinion in Citizens v Perdido Sun to determine whether Citizens is  subject to an action under 624.155 for the willful failure of not attempting in good faith to settle a claim.  The case is currently being briefed and an opinion is not expected until late in 2014 or early 2015.