There are four options for dealing with property damage insurance claims: 1) forget about the loss and cover the damages out of pocket, 2) submit it to your own insurer and hope it pays a fair value for the damages, 3) submit the claim to the responsible party’s insurer and hope they will pay what you are owed, or 4) litigate. Each option has it advantages and disadvantages. But, before discussion the options, let’s define what makes up a property damage claim.
Insurance Claims for Property Damage
A property damage claim is a request for reimbursement of economic loss arising from physical damage to property. This includes physical damage to cars, boats, trucks, trailers and other equipment or property. Depending on the circumstances, the claim is for a) the reasonable cost to repair or replacement the damaged property and b) the value of the "loss of use" of the damaged property.
Four Options for Dealing with Property Damage
1. Forget About the Claim
Forget about the claim. This is a great option if the damage is small, there is no one to collect from or you caused the damage yourself. The down side of this option obviously is that you have to cover the damage out of pocket or use the equipment in a damaged condition, if that is possible
2. Submit the Claim to Your Insurance Company
Submit the claim to your own insurance company. The advantage of this option is the "covered" damages will be paid and you won’t have to pursue the responsible party. The disadvantage is your own insurer will likely low ball you on the value, object to paying any loss of use damages, only pay the amount of the claim which exceeds the deductible and will increase your rates or cancel our policy if you have too many claims.
3. Bring the Claim to a Third Party Insurance Company
Submit the claim to the responsible party’s insurance company and hope for the best. This is a good option if you are patient, liability of the responsible party is clear, you are willing and able to haggle with insurance adjusters who do not have your best interest at heart and there is adequate and appropriate insurance to cover the loss. Conversely, this is a bad option is you are not patient, there is a dispute over who is responsible for the loss, you do not like haggling with adjusters or there is inadequate or inappropriate insurance coverage.
4. File a Lawsuit
Litigation is never a good option, but often it is the best option for actually getting a claim paid at a fair value. The filing of a law suit results in court deadlines being set. Bad things happen if those deadlines are not met. This fact will force a recalcitrant insurance company to hire an attorney to defend its insured. In short, a law suit gets the attention of the people who have to pay for the loss. Disadvantages of litigation include attorney fees, litigation costs, delay and unpredictability of outcome. But, those disadvantages apply to both sides and often litigation will force everyone involved to become more reasonable because the stakes of not being reasonable are higher. This can result in early settlement through negotiations or medication.
If you have been charged with defrauding your home owners insurance company for an inaccurate property damage claim, you may need to hire a Criminal Defense Attorney for help with Home Insurance Fraud.
The Best Option Depends on the Value of the Property Loss
When property is damaged the owner suffers a loss. The loss can be large or small and the effect on the owner likewise can be large or small. Thus, the appropriate response to the damaged property should be analyzed in the context of the four options; 1) do nothing, 2) give the claim to your own insurer, 3) give the claim to the responsible party’s insurer or 4) litigate.
I have 33 years of experience in litigating all types of claims. Used properly, litigation is a great tool for recovering economic loss. If you need common sense legal advice on the best way to recover property damage, give me a call. I provide advice to clients on how best to deal with property loss and loss of use claims and I also litigate for clients on these and many other issues. I can be reached at (907) 929-4890, (907) 227-7529 (cell) or by email at Elliott@attorneydennis.com.