Common Insurance Claim Mistakes
Filing an insurance claim can be complex and stressful. Unfortunately, many policyholders make critical mistakes that can reduce their settlement or even result in claim denial. Learn about these common pitfalls and how to avoid them.
Top 10 Mistakes to Avoid
1. Delaying the Claim Report
The Mistake: Waiting days or weeks to report damage to your insurance company.
Why It's Harmful: Most policies require "prompt" notification. Delays can give insurers grounds to deny your claim or question the extent of damage.
How to Avoid: Report damage within 24-48 hours, even if you don't have all the details yet. You can provide additional information later.
2. Inadequate Documentation
The Mistake: Taking only a few photos or not documenting all damaged items.
Why It's Harmful: Without proper documentation, it's your word against the adjuster's assessment. You may not receive full compensation for all damages.
How to Avoid: Take extensive photos and videos from multiple angles. Document every damaged item, room, and structural element. Create a detailed written inventory.
3. Throwing Away Damaged Items Too Soon
The Mistake: Cleaning up and discarding damaged property before the adjuster's inspection.
Why It's Harmful: The insurance company needs to verify the damage. Without physical evidence, they may dispute your claim or reduce the settlement.
How to Avoid: Keep all damaged items until after the inspection, unless they pose a health or safety hazard. If you must dispose of something, photograph it extensively first.
4. Accepting the First Settlement Offer
The Mistake: Immediately accepting the insurance company's initial offer without review or negotiation.
Why It's Harmful: First offers are often lower than what you're entitled to. Insurance companies expect negotiation.
How to Avoid: Review the offer carefully, get independent repair estimates, and consider hiring a public adjuster to negotiate on your behalf.
5. Not Understanding Your Policy
The Mistake: Filing a claim without knowing what your policy covers or your deductible amount.
Why It's Harmful: You might file claims for non-covered items or accept settlements that don't reflect your actual coverage.
How to Avoid: Review your policy before filing. Understand your coverage limits, deductibles, and exclusions. Ask your agent or a public adjuster to explain unclear terms.
6. Making Permanent Repairs Before Inspection
The Mistake: Completing major repairs before the insurance adjuster assesses the damage.
Why It's Harmful: The adjuster can't verify the extent of damage, which may result in a reduced settlement or claim denial.
How to Avoid: Only make emergency repairs to prevent further damage (and document these). Wait for the inspection before permanent repairs.
7. Providing Recorded Statements Without Preparation
The Mistake: Giving a recorded statement to the insurance company without understanding how it might be used.
Why It's Harmful: Your words can be used against you. Inconsistencies or unclear statements may hurt your claim.
How to Avoid: Prepare before giving any statement. Consider having a public adjuster or attorney present. Stick to facts and don't speculate.
8. Not Keeping Detailed Records
The Mistake: Failing to document all communications, expenses, and interactions with the insurance company.
Why It's Harmful: Without records, you can't prove what was said or agreed upon, making disputes difficult to resolve.
How to Avoid: Keep a claim journal with dates, times, names, and summaries of all conversations. Save all emails and letters. Keep receipts for all expenses.
9. Underestimating Damage
The Mistake: Only reporting obvious damage without looking for hidden or secondary damage.
Why It's Harmful: Hidden damage (like water damage behind walls or structural issues) may not be covered if discovered later.
How to Avoid: Have a professional inspection done. Look for secondary damage like mold, structural issues, or electrical problems.
10. Going It Alone on Complex Claims
The Mistake: Trying to handle a large or complex claim without professional help.
Why It's Harmful: You're up against experienced insurance adjusters who work for the company, not for you. You may miss covered damages or accept inadequate settlements.
How to Avoid: For significant claims, hire a public adjuster who works for you and knows how to maximize your settlement.
The Bottom Line
Insurance claims can be complicated, and mistakes can cost you thousands of dollars. By avoiding these common pitfalls and seeking professional help when needed, you can protect your rights and ensure you receive the full compensation you deserve.