Does the Insured have to Concede to the Insurance Carrier Estimate?

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It’s not unheard of for a homeowner to hear, “Sorry, that’s not covered under your policy”.  But what happens when that homeowner believes the insurance carrier is wrong?  Who should they turn to?


What happens when an insurance adjuster tells the homeowner that not all the damage to the home is covered under their policy? In reality, the adjuster examines the property and policy to determine the cause of loss is not just from a covered peril but also from a pre-existing situation or some type of exclusion.  When the homeowner and adjuster cannot agree on damages, who determines what is paid, covered, excluded, etc.?  Who gets the final decision?  Surprisingly, the insurance carrier does not have the last say in what is covered.  In some cases, a judge will decide, in others, an appraisal committee because insurance is regulated on a state by state basis. This decision changes with location.

The Property Insurance Coverage Blog has done a good job highlighting this issue and states that in some states, like Florida, a third party appraisal committee should be used to determine the validity of the claim.  Florida recognizes the appraisers’ authority to determine causation, and courts have developed coverage versus causation analysis in property insurance cases.

“In State Farm & Casualty Company v. Licea, the Florida Supreme Court stated that when an insurance company admits there is a covered peril, but there is a disagreement on the amount of the loss, it is appropriate for the appraisal panel to determine the amount to be paid. In this circumstance, the appraisal panel is to inspect the property and determine how much the insurance company must pay based on the covered loss, while also excluding payment for excluded causes, such as wear and tear or dry rot. For example, if the insurance policy provides coverage for wind damage to the roof, but does not provide coverage for dry rot, the appraisal panel is to inspect the roof and determine a value for the wind damage, while excluding payment for repairs required by preexisting dry rot.”

Of course, while Florida’s legal precedent on determining causation is relatively structured, the same position cannot be said for other states.  In states like New Jersey, there has been no legal precedent on whether an appraisal committee or court is the correct way of determining causation.

Should a situation arise where the homeowner feels that the only acceptable action is to challenge the insurance adjuster and neither contractor nor public adjuster can change the initial insurance adjuster position, my recommendation is to seek proper legal counsel to determine whether or not further legal action can be pursued.


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  1. Plano Roofer

    Here in TX, when a hail storm hits, the insurance adjuster will more than likely approve the claim. Its always a good idea to have the roofing contractor present so they can be sure everything that is possible to claim is mentioned to the adjuster. The ins adjuster has been known to deny claims with obvious damage that should be covered. A this time, talk to your roofing contractor and ask if they are familiar with this process and ask if the have used a public adjuster to get claims approved? The public adjuster comes out and they determine if the claim should be approved, if so they work on it and get paid when they get the claim approved. What this means, is they only work on it if they know the claim will get approved. No cost out of the homeowner or the roofing contractor. The insurance pays…

  2. Kyle Larson

    This issue really cuts to the heart of the problem. As a homeowner whom are you to believe? In the example above, although dry rot is an excluded peril, building code would require contractor doing the wind repair work to insure the roof deck was adequate to accept and retain nails used to install shingles. Old delaminated plywood would not meet the code minimum. Since wind damage is a covered loss I would say the replacement of the plywood has to be considered as part of the claim.

    I realize that is not your point, however this example does a fine job of highlighting the issue. Insured’s are stuck between what a qualified contractor is telling must be done in order to expedite the wind repair, and what the insurance company is telling them they will pay for for said repair. Whom are the Insured’s to believe? While an appraisal or employing an attorney may work. Both come with a cost to the Insured as well as the Insurer. In many states hiring an Attorney is really cost prohibitive for the Insured. The amount they are likely to get, even if they win, would not be enough to pay attorney and still pay for the cost of repairs. Furthermore Insurers have their own legal fees to cover that, in the end, really get passed back through to the consumer through premiums.

    It seems to me since Insurer’s, and the policies they issue, are already requlated by State ran Insurance Commissions the simplest and most cost effective solution for all parties would be to have those same commissions available to interpret policy. This would also create a record so that when an issue comes up everyone could reference past decisions and have guide that would not require anyone to incur more costs. While I understand this is not an avenue most commissions want to stroll along, and it probably does not make sense for major coverage issues or large loss claims, it might work very well to resolve small coverage issues like the one outlined in your blog.

  3. Marcus Keilch

    I think engineering is also important. It provides a (hopefully) unbiased opinion for both the Insured and the Carrier. Let’s face the facts, insurance companies answer to shareholders, our case as contractors is to write the story correctly to the adjuster, the engineer writes the story correctly to the shareholders.
    I would like to add that I do not think insurance negotiations should be under taken by just any roofer. You need deep pockets, patience, power of persuasion, and the ability to document like a lawyer. Take an adjusting class, learn Xactimate, read some policy!

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