This post is also available in: English

Damage to property from superstorms and hurricanes such as Sandy, Katrina, and Andrew have amounted to billions of dollars.  In addition, hurricanes claim the lives of many, and many more are injured.  Although Katrina occurred nearly a decade ago, many New Orleans residents still have not recovered financially; many have not returned to New Orleans.  For most victims the road to rebuilding homes and businesses, and to replace lost personal property begins with insurance.  Unfortunately, despite touching television commercials featuring compassionate insurance adjusters, many find that they have inadequate insurance or that insurance companies are difficult to deal with.  Some insurance claim cases end up in court with the claimant suing the insurance company for failing to pay a claim.  While litigation is an option, it should be the last resort.

Claim Disputes

Although it is frustrating for claimants, it is common for an insurance company to deny a claim or offer to pay less than the claimant believes that he or she should receive.  While most homeowners carry homeowner policies, many do not have flood insurance.  Most residential insurance policies exclude coverage for damage that results from flooding.  When a severe storm or hurricane does occur, resulting in water damage, after filing claims with their insurance companies, many homeowners are saddened to find their claims denied.  However, lack of flood coverage does not always mean that the insurer is off the hook from paying a water damage claim.  What it does mean is that the insured must dispute the insurer’s denial.

There are several ways to attempt to resolve a dispute with an insurance company short of filing a lawsuit.  An insured most weigh the costs involved with each option against his or her resources as well as the amount at risk.  Losses associated with hurricanes can be significant.  Some lose their homes, while the homes of others are damages, but repairable.


In some cases, the insurance company may be willing to negotiate with you and ultimately pay less than the original claim amount.   To begin the negotiation process, the insured sends a demand letter to the insurer stating the amount requested, along with supporting documentation as to why the insurance company must pay.  The insurance company may respond by offering less than the amount you demand.  It may also simply again deny the claim.


If an insured is not able to resolve the dispute through negotiation another option is mediation.  Mediation is a very common way to resolve insurance disputes and is often required as part of the insurance agreement.  Mediation is an informal, voluntary, non-binding process for resolving claim disputes.  It is also relatively inexpensive as well as fast way to resolve a claim.  However, oftentimes the settlement amount that the mediator recommends is significantly less than the amount of the insured’s claim.  However, mediation settlement offers are non-binding.  Thus, if the insured believes the offer is too little, he or she does not have to accept it.


If the insured and the insurer are not able to settle the dispute through negotiation or mediation, then the insure has the option of filing a lawsuit.  A lawsuit can be both time-consuming and costly.  However, it may be well worth it where the insured has a strong case and the amount at stake is significant.

There are many reasons that an insurer may deny a claim.  Some reasons may come down to technical or legal nuances in the policy.  In order to prevail in an insurance dispute, it is important to be prepared with documentation to prove losses, and any other supporting documentation.  The more prepared, the more likely the insured will succeed in reaching a reasonable settlement with the insurance company.

In cases of hurricanes that cause significant property damage, there are often stories of long delays in receiving insurance settlements.  What more can the government do to make sure that insurance companies process such claims expeditiously and fairly?

Staff (65 Posts)