How To Protect Yourself From Insurance Fraud: Tips From A Lawyer Who’s Seen It All

Written by Galen M. Hair Posted On Thursday, 23 May 2024 00:00

Are you navigating the stresses of insurance fraud? You’re not alone: this happens to thousands of people each year. As a property-casualty attorney, I’ve seen what can happen when insurance companies don’t work in their clients’ best interests, or even worse, commit insurance fraud.

One thing to know in any property damage situation is this: your insurance company will not treat you fairly in many cases. This might sound grim, but it’s not personal. It’s business. Insurance companies can’t make money by paying out claims. While they can plan for eventual losses by following the average rate of home damaging events, large-scale catastrophic events like natural disasters change the actuarial tables and can threaten an insurance company’s profitability.

If an insurance company is a bad apple, they might use unethical tactics to avoid paying out on your claim. Sometimes, that looks like accusing you, the property owner, of insurance fraud, by implying you’re claiming damage that didn’t occur or that isn’t covered. This may even be accompanied by false threats of legal action. Some insurers will begin the shady behavior before disaster even strikes by misrepresenting their policies from day one.

Others will hit you with late payment or attempt to alter your policy without notice - and these moves are just the tip of the iceberg. Unfortunately, bad faith behavior and fraud are always a concern when choosing and working with an insurance company. The good news is that there are ways to protect yourself from money-hungry agents and bad deals.

Never let your mortgage company choose your property insurance for you.

When you do this, you run the risk committing to a plan that doesn’t serve your best interests or fit your individual needs. Mortgage companies rarely choose policies that are ideal for homeowners. Instead, consider asking your lender for suggestions and do some research on your own to ensure your lender’s advice aligns with the best option for you.

If it’s legal, record everything.

If you live in a state where it’s legal to record phone calls and meetings, do so. If the insurer is pressuring you to talk things over instead of putting it all on paper, a recorder is your friend. You want to make sure every promise they make to you is on tape. If there’s bad faith behavior, like aggression or threats, you’ll of course want to have that recorded too.

Document everything.

Get every step of the process in writing. Try to avoid open-ended phone calls or situations where decisions and agreements aren’t on paper. If anything important comes up during a verbal discussion, make sure that discussion is followed up with written documentation. Take personal notes on every step of the process in case you need them in the future.

You have the right to decide who works on your property.

Choose contractors you trust - that’s your right! Insurance companies may try to pressure you to work with specific companies, or fraudsters may even show up at your door offering to do shoddy contracting work. Don’t be afraid to make your own decisions about who works on your home or business property.

If you are handing a claim, work with people who are on your side.

Don’t just rely on the insurance company to help you out or to consider your best interests in the claim process. Speak to experts who are on your side and can help you navigate the process to ensure you get what you’re owed.

Don’t be afraid to hire a lawyer.

The claims adjusting machine doesn’t offer much space for human empathy or compassion. Despite this, many people are hesitant to hire professional help. You might feel like another expense is the last thing you want or need in this situation. But the reality is that a lawyer will be there to help you pick up the pieces of your property damage and can make sure your rights are enforced in a way that you can’t do alone. You entered into an agreement with your insurance company, and that agreement needs to be honored in good faith. A lawyer can have your back and make sure that happens.

Galen M. Hair, Owner of Insurance Claim HQ, is a property insurance attorney operating in more than seven states including Alabama, Louisiana, Texas and Georgia among others. Galen and his team have helped over 800 families rebuild their homes and businesses. He has been rated a Super Lawyers Rising Star, and voted one of National Trial Lawyers Top 100. To learn more about how Galen and his partner, Alexander Shunnarah, can help protect property from disaster, please visit his website. 

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