Category: Insurance Disputes

Few words strike fear into the heart of a policyholder like “Your claim is under investigation.” It’s understandable: you pay your premiums every month in case something happens, so it can be hard to reconcile your “good” behavior with a potential hold-up in the process.

Here’s what you need to remember: your insurance company covers thousands of policyholders, and receives numerous claims each year. Sometimes there is some confusion on their side; other times, you may have failed to provide all of the necessary information. Under some circumstances, however, your insurer could be acting in bad faith and trying to find a way to deny the claim completely. Working with an insurance dispute attorney means you’ll find out which one applies – and you’ll be protected if your insurer is trying to “pull a fast one,” as they say.

The investigation of the claim

We have used this example before, but let’s say you submit a claim to your homeowners’ insurance after a house fire. Your insurer is going to ask for a tremendous amount of information: tax returns, your deed to your home, any contracts you may have had pending, etc. If your insurer believes that you are not being truthful in some way, you will likely be asked to submit to an Examination Under Oath as well.

Once they have all of this information, the company may dig deep to find any discrepancy or hint of impropriety. If they suspect any wrongdoing – intentional or accidental – on your behalf, they may try denying your claim. How they define “wrongdoing” depends on your exact circumstances. For example, let us say that you were in an auto accident 20 years ago and put a claim into your homeowners’ insurance company for a fire loss. If you forgot about that claim when completing your application for homeowners’ insurance, or didn’t mention it when asked about prior claims during a recorded interview after the fire (and it’s understandable if that happens, because most people don’t think a decades’ old auto insurance claim is related to a house fire in any way), your insurance company may try to deny your new claim because you “lied.”

Your adjuster will also look at the damages to your home to determine whether to pay for your losses. This is why documentation is so important. Any missing information or any perceived “gaps” in the documentation may lead your adjuster to believe you are trying to collect more than you are entitled. If they believe you have not cooperated with their investigation (your policy has a cooperation clause, believe me), or if you have multiple claims put in to multiple insurers, you may find yourself under investigation as well.

If you put a claim into your insurance company and find yourself under investigation, you may want to call an experienced Tennessee insurance dispute attorney to help you. At the Gilbert Firm, we protect our clients whose claims have hit a snag, or are in danger of being denied or reasons of bad faith. To reserve a consultation with Brandon McWherter, Clint Scott, Jonathan Bobbitt or any of our insurance dispute lawyers, please contact us. We maintain offices in Nashville, Chattanooga, Memphis and Jackson to better serve our clients throughout Tennessee and the surrounding regions.

Because we handle a tremendous amount of insurance disputes each year, our team has a firm grasp on arbitration. (You can see a couple of examples right on my attorney bio page.) The average policyholder doesn’t know much about arbitration, though, and that can hurt you in the event that you ever need to make a claim.

Arbitration is a form of Alternative Dispute Resolution (ADR). It’s supposed to help you and the other party avoid litigation, and the time and costs associated with going to trial. In essence, it works like this: two parties (the policyholder and the insurance company) cannot reach an agreement on a fair settlement of a claim. Rather than go to trial, both parties agree to arbitration, where an arbitrator will act in the place of a judge and review the evidence and make a decision. When you choose arbitration, you still:

• Use an insurance dispute attorney to argue your case
• Present evidence
• Present testimony, when applicable
• Abide by the decision of the arbiter

That last point is especially important: an arbiter’s decision is legally binding. Whatever the arbitrator decides, both the policyholder and the insurer must live with it – usually.

Appealing an arbitral award

In Tennessee, there are a small handful of grounds on which an appeal can be brought. This is different than appealing a decision in a civil or criminal court, where a judge will look at the facts of the case. In order to overturn an arbitration award, an insured typically has to prove that the arbitrator was partial to the other party, biased against the insured, or committed an act of fraud.

Arbitrate or litigate?

Depending on the nature of your policy, you may be forced into, but if you have a choice, you should come in and speak to one of our insurance dispute attorneys at the Gilbert Firm. We have offices in Nashville, Chattanooga, Memphis and Jackson, so travel is not an issue for us should you choose to go that route. We can advise you about your options and help you make a decision that is best for you. To schedule a meeting with Tennessee insurance dispute lawyer Clint Scott or Brandon McWherter, please contact the Gilbert Firm. We can help.

When you purchase a unit in a condominium, you own the interior of that unit; the exterior (or from the studs-out, typically) is managed by a homeowners’ association (HOA). As part of your contract, you will pay HOA fees that go towards the upkeep of the land and outside structure. Part of those fees pay for an insurance policy that covers the complex as a whole. Because of this, condo residents and HOAs may face certain challenges when it comes to making an insurance claim, especially if there is a dispute regarding coverage or causation.

Proving causation

The first hurdle most HOAs and policyholders face involves causation – i.e., what event led to the problem associated with the claim, and is it covered under the policy. For example, let us say that after a heavy rainstorm, residents notice that the roof now leaks, causing damage to their ceilings. The insurance company says that the leaks are the result of an older roof, and were bound to happen because the HOA was not maintaining them properly. The HOA says that there had been no leak before the storm. At this point, an attorney representing the HOA will attempt to prove that the storm was the cause of the damage, and an attorney representing the insurance company will attempt to prove that it was lack of maintenance, or wear and tear. For HOA’s, this dispute is near commonplace with the seemingly unending barrage of hail and wind storms that have barraged the South in recent years. The lawyers at Gilbert McWherter Scott Bobbitt PLC have handled dozens of these claims and would be pleased to assist.

HOA claim or condo-owner claim?

For condominium unit owners, this is where the second hurdle comes in. A leaky ceiling can cause damage to the electrical wiring inside the condo unit, but it can also damage electronics that are plugged into that electrical circuit, or to furniture or home décor. The HOA insurance policy will likely not cover your personal effects, which means you need to make a separate claim for the items that were damaged due to the leak. If your HOA offered an all-in insurance policy, and you did not purchase any additional insurance, then the HOA’s claim might cover the damage to your items under their policy. However, another separate claims may need to be brought against the insurance company to ensure that you receive compensation for your damaged items.

The smart move for condo owners is to always purchase their own individual insurance policy, just in case. You can opt for umbrella coverage or a policy that covers only what you own, but additional coverage could be the difference between recouping your losses and taking one. If you have questions about your policy, or are facing a dispute with your insurer over your claim, Gilbert McWherter Scott Bobbitt PLC can help. Please contact Brandon McWherter, Clint Scott or Jonathan Bobbitt to reserve a consultation with a skilled Tennessee insurance disputes attorney at one of our offices in Nashville, Chattanooga, Memphis, and Jackson.

In the simplest of terms, we carry insurance in case of emergencies: fire, wind, hail, flood, illness, etc. When an emergency occurs, policyholders make a claim to their insurance companies to recoup their losses: the burned house, the lost income, the cost of new carpets and drywall, etc. The insurer assesses the damage and then decides, based on its own assessment, how much money you are entitled to receive. Ideally, the assessment and compensation are given in good faith, meaning the insurer has offered the policyholder an offer that is fair under the terms of the contract.

When it is not, however – when an insurer purposely delays paying a claim, or offers an amount that appears considerably lower than the actual amount you are entitled to under the policy you hold – then the insurer may be acting in bad faith. If so, you have the right to take action against your insurer, and to seek certain remedies for those bad faith actions.

What the law says

Every state has a different way of handling bad faith claims. In Tennessee, for example, insurance companies “shall be liable to pay the holder of the policy… in addition to the loss and interest on the bond, a sum not exceeding twenty-five percent (25%) on the liability for the loss” provided:

• They still have not paid the loss within 60 days of a policyholder’s demand for payment
• That it has been proven to the court that this decision not to pay the loss was enacted in bad faith
• Failure to pay that loss has led to additional expenses or losses by the policyholder

A policyholder may also be entitled to additional remedies, such as punitive damages, depending on the details of the specific case.

Bad faith vs. disagreement

When an insurer does not act in good faith, a policyholder should seek legal counsel to hold the insurer accountable under the law. However, there is a big difference between a bad faith action and a genuine disagreement. To use a simple example: let us say you sustain damage to your roof in a storm. The roofer you consult with gives you an estimate of $10,000. Your insurance company’s roofer assess the damage at $6,000. While $4,000 is a considerable sum of money to the average homeowner, the insurer is not necessarily acting in bad faith simply because your estimates differ.

If you suspect your insurance company is playing it fast and loose with the terms of your contract, or is purposely delaying payment, the smart move is to speak with an experienced Tennessee insurance disputes attorney. Gilbert McWherter Scott Bobbitt PLC has protected the rights of policyholders in and around Tennessee since 1998. Please contact Brandon McWherter, Clint Scott or Jonathan Bobbitt to reserve a consultation at one of the Gilbert Firm’s offices in Nashville, Chattanooga, Memphis, and Jackson.