Navigating a large or complex insurance claim for commercial and governmental owners can be a challenging process. Below are some helpful tips to guide your initial actions:
Notify Your Insurance Provider
As soon as you determine you have damage that may be covered under your insurance policy, you should put your insurance company on notice of the claim. The policy will usually specify how and to whom notice must be given. You can also reach out to your insurance broker to provide notice for you. Regardless of the method, notice is a critical first step and should be completed at your first opportunity.
Take Photos and Videos of the Damage
Survey your property(ies) and take photos of suspected damage. Where you see active leaks or other problems, take videos. Then take more. Photos and videos of the immediate aftermath are often very helpful in distinguishing new from old damage.
Preserve All Documents and Evidence
Insurance claims are a legally regulated process. Down the road, you may be asked to produce emails, documents, texts, IM’s and other forms of communication. Understand that what you say in these communications can be used for or against you. Months from now, you may be asked to turn them over. So make sure you are communicating appropriately about the claim and ensure that your IT systems can adequately preserve and save this information.
Engage Your Corporate Counsel
Your corporate counsel may not be a specialist in insurance recovery, but they have your back on legal matters and can be the best gatekeeper on how your claim should be handled. The insurance industry will often have their attorneys working in the background to investigate and evaluate claims, particularly larger claims or those that may be disputed. Those insurance attorneys may be working toward a solution, or they may be assisting the insurance company in formulating its defenses. The best way to ensure that you are on level ground is to have your own counsel engaged. Moreover, large catastrophe events can attract a multitude of contractors, remediation companies and public adjusters, each of whom will want you to enter into a contract with them. Your corporate counsel is best suited to determine whether retaining any of these vendors is appropriate and offer insight regarding standard terms for such an engagement. And your corporate counsel is best suited to determine whether and when you need an insurance recovery specialist law firm like Raizner Slania LLP. Your corporate or general counsel can and should be your gatekeeper on how your claim is handled.
Cooperate With the Insurance Company and Let the Process Run its Course
Your insurance company is contractually and statutorily required to handle your insurance claim pursuant to the law, but it’s not a one-way street. A policyholder has a duty to cooperate with its insurance company so that the insurer may timely complete its investigation. This most frequently involves allowing insurance adjusters access to inspect the property(ies) and sometimes to review documents or conduct an examination under oath (EUO). Let the insurance company do its job before you make any decisions on whether the claim determination is adequate. And if they do seek information such as documents or an EUO, make sure to have your attorney involved to ensure that you are complying with your obligations while also protecting privileged or confidential information.
Mitigate Any Additional Damages
As soon as possible, make sure you are undertaking commercially reasonable efforts to protect the property. Major windstorms can cause substantial damage to roofs, and damaged roofs can result in serious interior leaks. As soon as you can, make sure that you have taken appropriate steps to protect the property with tarps and other clean-up and remediation efforts needed to avoid further damage.
Make Your Own Determination of Damage
The insurance company will typically prepare an estimate of damage they see from their standpoint. This is an estimate, not the gospel, and you can and should make your own determination. This can be through a bid from a qualified contractor or other expert. On matters that our firm handles in litigation or arbitration, we historically improve the insurer’s initial estimate by nearly 1000% on average. In certain types of cases, such as our representation of public school districts, our improvement rate is over 2000%. So, it is important to critically and professionally evaluate the insurer’s estimate and determinations in order to reach the right result.
Understand the Different Types of Insurance Disputes
Disagreements between a policyholder and insurer can take several forms. Sometimes the dispute is simply one of value, and there is no question about whether the claim is covered. Other disputes may involve strictly a question of whether the policy covers the claim at all. And frequently, it’s a combination, with the insurer acknowledging some damage, but questioning coverage for other parts of the loss, often based on “wear and tear” or other pre-existing damage exclusions in the insurance policy. An insurance company will often issue a “reservation of rights” letter during the claim investigation and that and other communications can provide insight into the type of dispute involved. The nature and complexity of the dispute can often guide what type of professional is best suited to represent you on the claim, and again, your corporate or general counsel is in the best position to make that determination.
Understand the Different Types of Dispute Resolution
In broad terms, disputed insurance matters get resolved in one of four ways. Many smaller or simple disputes can be negotiated informally to resolution prior to invoking any dispute resolution process. Appraisal can be helpful for some matters where only the value, or amount of the loss, is in dispute, but appraisal has serious drawbacks as a way to resolve legal claims and can sometimes result in a waiver of important damages such as attorneys’ fees. Many insurance policies require arbitration, often before a panel of three qualified arbitrators, and sometimes in far away jurisdictions such as New York. And litigation in state or federal court can also be an effective way to resolve insurance recovery disputes, often as a last resort. Each of these methods has risks and benefits, and your corporate counsel or a qualified insurance recovery specialist law firm like Raizner Slania LLP can help determine which is best suited for your claim.
About Raizner Slania LLP
Based in Houston, Texas, Raizner Slania LLP focuses its practice on commercial and governmental insurance recovery disputes. Each of the firm’s partners are board certified in insurance law by the Texas Board of Legal Specialization. The firm has secured over $300 million in gross recoveries since 2020 and on average has historically achieved a nearly 1000% improvement over the insurer’s initial claim determination. The firm has historically overturned insurance denials over 96% of the time. Jeff Raizner served as co-liaison counsel in Harris County for litigation arising out of Hurricane Ike, and recently led a team of lawyers that achieved $104 million in arbitration awards against a single insurer for claims arising out of Hurricane Maria. The firm has been lead counsel and amicus counsel on multiple cases before the Texas Supreme Court on critical insurance law topics.
