Denied or Underpaid Insurance Claims and Coverage Disputes
Insurance claim disputes frequently arise when an insurance company denies a claim entirely or issues a payment that the policyholder believes does not reflect the scope or value of the loss. These disputes may involve disagreements over coverage, causation, valuation, or policy interpretation.
Burts Law represents policyholders in disputes involving denied or underpaid first-party insurance claims, assisting clients in understanding the insurer’s stated position and evaluating options under the applicable policy and law.
What Is a Denied or Underpaid Insurance Claim
A denied insurance claim occurs when an insurer refuses to provide coverage for a reported loss. An underpaid claim occurs when the insurer issues payment, but the amount does not fully account for the covered damage or benefits owed under the policy.
Both situations may warrant review of the policy language, claim handling, and the insurer’s explanation for its decision.
Common Reasons Insurance Claims Are Denied or Underpaid
Insurance companies may deny or limit claims for a variety of reasons. Common issues include:
- Reliance on policy exclusions or limitations
- Disputes over the cause of loss
- Allegations of late notice or failure to comply with policy conditions
- Disagreements over repair scope or cost
- Depreciation or valuation methodology
- Incomplete investigations or documentation disputes
Each claim is evaluated based on the specific policy terms and facts of the loss.
Denial vs. Underpayment Chart
| Claim Outcome | General Description |
| Claim Denial | Insurer refuses coverage entirely |
| Partial Payment | Insurer pays some, but not all, claimed losses |
| Low Valuation | Insurer disputes repair or replacement cost |
| Delayed Payment | Insurer postpones payment pending investigation |
Understanding how the insurer categorized the claim can help frame further review.
Reviewing an Insurer’s Coverage Position
When an insurer denies or limits a claim, it typically issues a written explanation or coverage position letter. Review may focus on:
- The policy provisions cited by the insurer
- How exclusions or conditions are applied
- Whether the investigation addressed all claimed damage
- Consistency between policy language and the insurer’s reasoning
This review may help determine whether a dispute exists and what options may be available.
Disputes Over Valuation and Scope of Loss
Underpaid claims often involve disagreements about the cost to repair or replace damaged property. Differences between contractor estimates and insurer valuations may involve depreciation, pricing methods, or the scope of covered damage.
Valuation disputes may arise across homeowners, property, auto, and business-related insurance claims.
FAQs: Denied or Underpaid Insurance Claims
What should I do if my insurance claim is denied?
A denial may warrant review of the policy language and the insurer’s stated reasons for denying coverage.
Can an insurance company partially pay a claim?
Yes. Insurers may issue partial payments based on their valuation or coverage position.
Does an underpaid claim mean coverage was accepted?
Partial payment may indicate some coverage was accepted, but disputes may still exist regarding the amount owed.
Are delays in payment considered a denial?
Delays are not the same as denials, but prolonged delays may raise concerns depending on the circumstances.
Do all denied or underpaid claims involve bad faith?
Not all claim disputes involve bad faith. Evaluation depends on the facts, policy terms, and claim handling.
How Denied or Underpaid Claims May Intersect With Other Issues
Denied or underpaid insurance claims may overlap with coverage disputes, appraisal issues, business interruption losses, or allegations of improper claim handling. Evaluation often involves reviewing both contractual and procedural aspects of the claim.
Contact Burts Law
If you have questions about a denied or underpaid insurance claim, contact Burts Law to schedule a consultation to discuss your situation and available options.
