In: Finance
What are your options if you disagree with the amount of damages your insurance company calculated took place after an insured peril damages your home? Explain.
When the insured party’s home is damaged by an insured peril and he or she disagrees with the insurance company about the amount of damages, the insured party’s has the following options:
The appraisal process will consist of the following:
1.The insured or the insurance company may submit a written appraisal report.
2.Both the insured and the insurance company choose an appraiser and pays for an appraiser.
3.The two appraisers choose an umpire.
4.The insurance company pays an amount if the appraisers reach an agreement on the amount. If not, the umpire reviews the difference.
5.When both the umpire and appraisers reach an agreement, their figures determine the settlement amount.
2.Alternative Dispute Resolution
When the insurance company and the insured fail to reach an agreement but wish to avoid litigation, they may start the alternative dispute resolution process. Here, a mediator listens to both the insurance company and the insured and tries to bring them together to work things out informally.
Or a group of arbitragers hears the evidence from the insurance company and the insured and make a decision on what is to be done. When arbitration is binding, the decision is final. With nonbinding arbitration, either party may reject the finding and decide to do something else.
3.Lawsuit
If the insured has compiled with all policy terms, the insured may choose to sue the insurance company.