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Commercial property can serve as a beneficial investment opportunity for entrepreneurs as well as small and large corporations in industries ranging from healthcare to hospitality.
Natural disasters and other incidents such as fires, burst pipes, and theft, however, can put commercial property owners in a challenging position. In the United States, insured losses from natural disasters alone reached a total of $52 billion in 2018, affecting commercial and residential property owners nationwide.
After suffering financial losses from a disaster, one of the first steps commercial property owners can take to recover their losses is to file a commercial property insurance claim with their insurance carrier. This can help property owners receive reimbursement for insured losses, such as damaged merchandise, building repairs, personal property damage, and other expenses.
The process of receiving reimbursement through a commercial insurance property claim, however, is not always easy. Some insurers may attempt to undervalue or deny a claim, even if you’ve paid your insurance premiums and have filed a legitimate claim for insured losses.
If you’re a commercial property owner who’s having difficulty securing a fair claim for your losses in the aftermath of a disaster, the insurance claim lawyers of Florin|Roebig can help.
Types Of Commercial Property And Property Damage
Commercial property is a broad term that can apply to any building or lot of land that serves the primary purpose of generating profit for a business or corporation.
Types of commercial properties include:
- retail stores
- housing complexes
- hotels
- malls
- office buildings
- farm land
- warehouses
- medical centers
- restaurants
- sports facilities
- nursing homes
All types of commercial properties can be susceptible to the damage wrought by natural disasters such as hurricanes, floods, and incidents such as fires and robberies. Property damage insurance is the primary protection property owners have in these circumstances to compensate for resulting losses covered under their policy.
The amount of coverage a property owner has to recover their losses is highly individual, based on the type of policy you’re insured under, your location in the United States, and the terms and conditions detailed within your insurance policy.
Common types of property damage listed in commercial insurance claims include:
- fire damage
- wind damage
- water damage
- hail
- smoke
- electronics
- furniture
- machinery and fixtures
- exterior signs
- mold damage
Understanding Commercial Property Insurance Coverage
Commercial property insurance generally includes three primary components of coverage, including building coverage, business property coverage, and personal property of others.
Commercial insurance coverage can be bought as an individual line policy (also known as a monoline policy) or be purchased within a Commercial Package Policy (CPP), which may group property damage insurance with other policies such as commercial auto and general liability.
The primary purpose of commercial property insurance is to insure a company’s physical assets from disasters. Not all disasters may be considered covered perils under standard commercial property insurance policies. Insurance for flood and earthquake damage, for instance, may require the purchase of separate policies.
The primary components of commercial property insurance policies:
- Building coverage: Building coverage offers coverage for losses directly related to buildings on the commercial property, such as permanently installed fixtures, equipment, and machinery. Terms and conditions within this coverage may dictate the amount of coverage you are able to receive based on the total insured value of your buildings. This coverage may be subject to coverage limits and other terms and conditions.
- Business property coverage: Insured losses under business property coverage typically consists of inventory (e.g. stock and supplies), non-permanent fixtures, furniture, important documents, and other machinery or equipment not insured under building coverage.
- Personal property coverage: Personal property coverage offers coverage for any other personal property that is within the commercial property owner’s custody, control, or care. This type of coverage may not be necessary for all commercial property owners, depending on the type of business that occurs on the premises.
Additional forms of coverage—such as terrorism insurance, umbrella liability policies, and specialized liability policies—may be available for purchase separately through certain insurance carriers.
Many commercial property owners purchase their insurance coverage according to the needs of their property, in consideration of how owners can best sustain the property’s income generation in the event of a disaster.
Commercial property hosting small business practices, for instance, may require a different level or amount of coverage than commercial farmland or property owned by a large corporation.
Why Was My Commercial Property Claim Denied?
After filing a commercial insurance claim with an insurer, one common frustration insured parties can face is a denied claim.
There are many reasons for which a claims denial may be legitimate. For example, a claim may be denied if an insured party hasn’t paid their premiums, or has filed for losses that aren’t covered under their policy.
Common reasons for denied commercial property insurance claims include:
- late or absent premium payments
- suspicion of fraud
- losses are not covered under the policy
- coverage limits have been met or exceeded
These are legitimate reasons an insurance carrier may provide to explain a denied claim. However, there are also circumstances in which claims denials are not so black-and-white.
The gray area adjusters have in making these decisions is a certain amount of room for interpretation. This means that there’s a chance that misinterpretation—or other mistakes, such as misreading a policyholder’s coverage limits—have the potential to occur, resulting in an unjust denial or a claim amount that is lower than expected.
Bad Faith Tactics Sometimes Used By Insurance Companies
Accidents can happen within the insurance claims process, and although this may reflect badly on the business operations of an insurance carrier, it might not necessarily indicate negative intent.
If a mistake has been made with a claim and a policyholder is able to successfully communicate this to the insurer by way of a dispute, an agreeable settlement may be made.
However, there are also instances in which some insurance companies may purposely act in bad faith, utilizing tactics that intend to mislead or manipulate the terms and conditions within the insured’s policy to reduce or deny their payout.
Examples of these bad faith tactics can include:
- challenging the value of your losses
- providing false or misleading information regarding the types of insured losses that are covered under your policy
- ignoring evidence of your losses/property damage
- failing to provide an explanation for a denied claim
- undervaluing (low-balling) your claim
How To Dispute A Commercial Property Claim
Disputing an insurance claim can be a tricky process. The first action you can take before contacting your insurance company is to review both your insurance policy and your filed claim.
Consider asking yourself the following questions:
- Have I paid my insurance premiums on time?
- Are all of the losses included within my claim insured under my policy?
- Do I have the correct types of insurance to cover the property damage I’ve filed for?
- Has my insurance carrier provided a detailed and fair explanation of their decision to deny my claim?
- Have I provided quality proof of the property damage? (e.g. photos, videos, repair estimates, receipts)
Step 2: Contact Your Insurance Company
Once you’ve reviewed your claim, the next step is to contact your insurance agent. Be polite, but firm, and don’t assume upfront that the claim they have offered (or the denial) is an act of bad faith.
To get a better understanding of how the claims decision was made, you’ll likely need to speak to the insurance adjuster who was responsible for handling your claim. The adjuster should be able to explain their process of how they came to the decision and field any questions you have concerning coverage.
Step 3: Request An Additional Review
If you believe the claims decision you received was undervalued or otherwise unjust, ask the adjuster if they can re-review or investigate your claim. Adjusters are generally obligated to grant this request as long as it has been made within the amount of time stipulated within your policy.
If your insurance company is uncooperative at this point, or has halted communications with you, it may be time to take additional action independently. This may involve seeking an independent appraisal of your property damage and consulting an experienced insurance claims lawyer.
Benefits Of Hiring A Commercial Insurance Claims Lawyer
Determining whether your insurance carrier has acted in bad faith or unjustly denied a claim can be a challenging process. Many property insurance policies contain complex legal language that can be difficult to decipher and dispute without the expertise of an insurance claims lawyer.
While it’s not necessary for property owners to hire a lawyer to dispute an insurance claim, it is highly recommended in cases where you believe your insurance carrier has acted in bad faith.
Having an insurance claims lawyer assess your case can provide you with greater confidence as to your next steps in disputing your claim and potentially taking legal action against your insurer.
At Florin|Roebig, our experienced insurance claims lawyers can:
- determine your eligibility for taking legal action against your insurer
- investigate your claim
- consult legal and engineering experts to conduct an accurate assessment of your property damage
- gather evidence to support your dispute
- handle communications with your insurance company
- fight for a fair settlement that covers the extent of your insured losses
- bring your case to trial if necessary to ensure you receive compensation for insured property damage and other bad-faith damages
How Long Do I Have To Dispute A Claim?
Most insurance policies have a limit for the amount of time policyholders can dispute an insurance claim. Taking legal action against an insurance company for bad faith tactics can also be subject to the legal statutes of limitations—the deadline for bringing a claim against an insurer. This deadline can vary by state.
In Florida, for instance, policyholders have up to five years from the date of a bad-faith incident to bring a claim against their insurance company. The time limit for disputing a claim, on the other hand, is something that is typically detailed within your insurance policy.
If you wish to dispute a claim, it’s best to begin this process right away. If you’ve already filed a dispute and are grappling with an insurance company that is uncooperative, consider contacting an insurance claims lawyer as soon as possible.
Contact Florin|Roebig For A Free Case Evaluation
If you believe your insurance company has operated in bad faith by unjustly denying or undervaluing your commercial property insurance claim, the insurance claims lawyers of Florin|Roebig can help.
Voted one of America’s top law firms, our lawyers can offer you our extensive expertise in litigating insurance claims cases and a deep commitment to fighting for settlements that are not a penny less than our clients are owed.
Don’t wait to learn how much your case may be worth. Schedule a free case evaluation with one of our top-rated commercial insurance claims lawyers today by calling our offices at (888) 226-6581.