Friday April 10, a tornado struck Murfreesboro leaving a line of destruction. I had know of the impending storms and was at home in my sheltered basement with my wife, 3 dogs, and 2 cats. I watched on TV in horror as a traffic camera showed live the funnel cloud form and then descend to earth crossing I-24 and tearing into a neighborhood. I knew it would be bad.
As true Tennessee "volunteers" hundreds have turned out to help those whose homes and belongings have been lost and destroyed. Over 600 homes were damaged or destroyed. Among those "helping," you guessed it, the insurance companies.
On early Saturday morning I was driving to my farm to do some work. On the radio less that 24 hours since the storm Allstate was already advertising its "good hands" motto. That ought to tell you something. Sounds like an unethical lawyer showing up at the emergency room after a car wreck.
As a homeowner how do you deal with your insurance company? Very carefully. The insurance company will act like they are trying to help. Wrong, they are there to make money. How does an insurance company make money? By paying out less than they collect in premiums. Thus, the adjusters have a huge incentive to reduce or deny claims. Numerous lawsuits were filed after Katrina over these types of claims and the denial of what is due. Some tips to help you thru this difficult time.
First, document document document. Video the home and destruction. Take as many pictures as you can. If there is hidden damage take pictures of that. Show the damaged property and contents. Once it is cleaned up it is very difficult if not impossible to document. This is particularly important when the home is only partially damaged and may be repaired. If at all possible prepare a written inventory of the contents. This is very difficult and emotional. I know. About 20 years ago I had a home burn. My wife and I wept as we sifted through the ashes writing down each item. Sit down with family and go through each room and write down item by item what was in the room. Try to remember where, when, and how much you paid for each item. Your memory is fresh now. Six months from now you will forget things.
Second, you must know what you policy covers. Look at your policy. If it is lost, ask your agent for a complete copy, not just the declarations page. Trust me they can get a copy sooner rather than later. DO NOT rely on what they tell you it covers. Read it. If you do not understand the policy seek the help of an experienced lawyer who deals with insurance companies on a regular basis. He may charge you a fee, however, it should only be a couple hundred bucks. In these circumstances I do not charge for the consultation and review of your policy. You have already suffered enough.
Third, although you must cooperate with the insurance company, this does not mean accepting what they offer. If the home is to be repaired, get at least three estimates from licensed, bonded, and insured contractors. Check with the Tennessee Department of Commerce and Insurance Board For licensing Contractors for each company. Ask to see their certificate of insurance and license. Inquire as to how long they have been in business. Ask for references. Determine if they have ever done a job as big as yours. The insurance company will try to steer you to an "approved" contractor. That often means cheap. If there are problems the insurance company will "forget" it recommended the company. DO NOT accept two party checks. Get your own estimates. Slow down, this an emotional time. Do not make hasty decisions. Remember "haste makes waste."
Fourth, be completely honest. You will most likely have to file a sworn proof of loss. If it is incorrect or appears incorrect the insurance company will deny the entire claim. Your policy will tell you how long you have to file that claim. It could be a short as six months. Again knowing your policy is key. Be as detailed as possible when preparing the proof of loss, thus the advice above of documenting the scene as soon as possible.
Fifth, be very careful about signing anything or accepting a "quick" check. The insurance company will probably be quick to give you an "advance" to make them look like good guys. Be sure that check does not say "Settlement in Full" "All losses" or words to that effect. Again if in doubt contact a lawyer.
The insurance company has an obligation to deal with you in "good faith." Any ambiguities are construed against the insurance company NOT against you the policy holder. If the insurance company is found to have dealt in "bad faith" there are penalties imposed by statute as set forth in Section 56-7-105 which states:
56-7-105. Additional liability upon insurers and bonding companies for bad-faith failure to pay promptly. —
(a) The insurance companies of this state, and foreign insurance companies and other persons or corporations doing an insurance or fidelity bonding business in this state, in all cases when a loss occurs and they refuse to pay the loss within sixty (60) days after a demand has been made by the holder of the policy or fidelity bond on which the loss occurred, shall be liable to pay the holder of the policy or fidelity bond, in addition to the loss and interest on the bond, a sum not exceeding twenty-five percent (25%) on the liability for the loss; provided, that it is made to appear to the court or jury trying the case that the refusal to pay the loss was not in good faith, and that the failure to pay inflicted additional expense, loss, or injury including attorney fees upon the holder of the policy or fidelity bond; and provided, further, that the additional liability, within the limit prescribed, shall, in the discretion of the court or jury trying the case, be measured by the additional expense, loss, and injury including attorney fees thus entailed.
(b) In any action against an unauthorized foreign or alien insurer or bonding company upon a contract of insurance or fidelity bond issued or delivered in this state to a resident of this state or to a corporation authorized to do business in this state, if the insurer or bonding company has failed for thirty (30) days after demand prior to commencement of the action to make payment in accordance with the terms of the contract or fidelity bond, and it appears to the court that the refusal was vexatious and without reasonable cause, the court may allow to the plaintiff a reasonable attorney fee and include the fee in any judgment that may be rendered in the action. The fee shall not exceed twelve and one half percent (12.5%) of the amount that the court or jury finds the plaintiff is entitled to recover against the insurer or bonding company, but in no event shall the fee be less than twenty-five dollars ($25.00). Failure of an insurer or bonding company to defend the action shall be deemed prima facie evidence that its failure to make payment was vexatious and without reasonable cause.
I am more than willing to help. Please feel free to give me a call at 251-0005 or email me at firstname.lastname@example.org.