You’ve had storm damage to your house, a disruption to your business operations due to an environmental catastrophe or a claim against the home you just purchased. Thankfully, you have an insurance policy in place for exactly this situation.
Your coverage should protect you from liability-related losses and even help you fix the damage your property incurred. A homeowner’s policy might replace your roof, while business interruption insurance could help you pay your salaried workers and your rent while your business must temporarily remain closed.
Once you file your claim, you only have to wait a week or so for the insurance company to respond with the settlement offer. You now have the opportunity to accept a lump sum for all of your losses, which may seem tempting after an extended drop in your income or a long wait for repairs to your home. How do you know that the settlement is reasonable?
You need to evaluate the long-term impact of the claim
Whether your issue is a home that is not currently safe to inhabit or an heir who had no say in the sale of your home, you probably have costs beyond just the immediate damage or losses. Needing to live elsewhere might means hundreds of dollars a week.
You will also possibly have future expenses, some of which may be less concrete. Damage to a building, even after repairs, might impact its long-term market value. A business forced to close for several months may need weeks of buffer when they reopen before their sales or service calls reach the point that they were at before the closure. Needing to move could mean buying a home in an unfavorable market.
Before you accept a settlement, you need to make sure that it will cover all of the losses associated with the claim. You may need to prepare to negotiate. Once you sign an agreement to settle or cash a check, the insurance company will no longer have any liability for your losses.
Professionals can help you place a value on a claim
It can be difficult for someone with no real background in insurance or liability to understand the value of a claim or what settlement amount is appropriate for the circumstances. A lawyer who has a history of working with people in situations just like yours will know what other claimants have received as settlement offers, as well as what a claim might be worth if you had to go to court.
A lawyer will be able to help you determine if certain behavior constitutes bad faith insurance practices, like offering a settlement to low to be reasonable, and can help you take legal action if you can’t settle the claim outside of court.