When Should You Involve a Lawyer in an Insurance Claim?

People end up dealing with insurance companies in many different situations. Sometimes the claim is made under your own policy, for example, after a storm damages your home or business property. This is referred to as a first party insurance claim because you and your insurance company are both parties to the insurance contract (policy). Other claims arise after an accident where another person’s insurance company may be responsible for paying the loss. Those are typically called third-party claims or tort claims because they involve seeking recovery from someone else (third-party), usually through that party’s liability insurer. At McWherter Scott and Bobbitt, we handle first party insurance claims.

Many claims resolve without much conflict. The insurer investigates the loss, determines what the policy covers, and issues payment.

Other claims do not move that smoothly. A claim that initially seemed routine can turn into a dispute over coverage, the cause of the damage, or the amount the insurer believes it should pay. When those disagreements develop, involving legal counsel can help protect the record, focus the issues, and position the claim for a more favorable resolution.

The question usually arises when negotiations stall, when the insurer disputes the value of the loss, or when the company refuses to pay the claim at all.

If you reside in the Midwest or Southeast and are having difficulty resolving a claim with an insurance company, McWherter Scott & Bobbitt represents policyholders in first-party insurance coverage disputes and related claim issues.

What are common problem situations with insurance companies?

Most insurance claims begin with a routine investigation. The insurer assigns an adjuster, reviews the policy, and evaluates the damage or loss that was reported.

Disputes tend to develop during that evaluation. Several situations come up repeatedly in first-party insurance claims – and they are often the points where legal guidance becomes valuable

The insurer denies your claim

Insurance companies deny claims for a variety of reasons.

Some denials stem from policy limitations. An insurer may conclude a particular claim involves damage that falls outside the coverage provided by the policy. In other situations, the insurer may conclude that the claim was not submitted within the time period required by the policy.

Denials also occur when the insurer and the policyholder disagree about what caused the damage.

For example, a homeowner may report roof damage after a storm. The insurer’s adjuster might determine that the condition of the roof reflects long-term deterioration rather than storm-related damage. When that happens, the insurer may deny the claim based on wear-and-tear exclusions or other policy provisions.

These types of disagreements are common in property insurance claims because the cause of the damage often determines whether the policy applies.

Some denials also arise from how claims are evaluated internally by insurance companies. In some cases, the insurer reaches a narrow view of the policy language, the cause of loss, or the scope of damage.

When a denial occurs, the explanation typically centers on the insurer’s interpretation of the policy language or its conclusion about the cause of the loss.

The insurance company delays processing or paying your claim

Another issue policyholders encounter is delay.

Insurance claims usually require investigation before payment is issued. Adjusters may need to inspect the property, request documentation, or consult with contractors, engineers, or other professionals before reaching a decision.

Sometimes the process moves slowly because additional information is needed.

In other cases, policyholders experience long gaps in communication or repeated requests for documentation that has already been provided, shifting explanations, or unexplained delays in making a coverage decision. Depending on the applicable law (which varies by jurisdiction) these delays or wrongful denials may mean the insurer faces exposure for bad faith penalties.

The insurance company offers you less than your claim is worth

Disputes over the value of a claim are also common.

Even when the insurer agrees that coverage exists, the company may reach a different conclusion about how much should be paid. This often happens in property damage claims where the scope and/or cost of repairs is disputed.

One contractor may determine that an entire roof must be replaced. An adjuster may conclude that only partial repairs are necessary. The difference between those two estimates can significantly affect the value of the claim.

Insurance companies rely on adjusters and internal estimating systems to evaluate damage. Contractors, engineers, and other professionals may reach different conclusions based on their own inspections.

Settlement discussions often revolve around those competing evaluations. Documentation, repair estimates, and inspection reports frequently become central to the negotiation.

Initial settlement offers sometimes change once additional documentation or professional evaluations are presented.

When should you speak with an insurance attorney about your claim?

Some policyholders consult a lawyer early, particularly when the loss is substantial, the policy language is complicated, the damage is significant, business income is at stake, or the claim is likely to involve disputes over cause, scope, or valuation. Others wait until the insurer denies the claim, delays the claim, or a settlement dispute develops.

Even if negotiations with the insurance company are already underway, an attorney can become involved at any point before the claim is resolved as long a settlement release has not been signed by the parties. In many cases, earlier involvement helps avoid avoidable mistakes, strengthen documentation, and prevent the insurer’s position from hardening before the policyholder’s evidence is fully developed.

Attorneys who work in insurance coverage disputes often begin by reviewing the policy itself. The policy language defines the rights and obligations of both the insurer and the policyholder, and disputes frequently center on how those provisions apply to the loss.

Lawyers also review the claim file; inspection reports, repair estimates, communications with the insurer, and other documentation related to the claim. That review can help clarify why the insurer reached its decision, identify gaps or weaknesses in the insurer’s position, and determine what additional evidence might improve the outcome.

Legal assistance may also become important when a claim involves appraisal, arbitration, examination under oath, or another formal dispute-resolution process. In those situations, policyholders should seek legal counsel to protect their rights and to assist with preparation of their claim.

In some cases, insurance disputes eventually lead to lawsuits. An insurer may file a declaratory judgment action, or the policyholder may need to pursue litigation to recover policy benefits and other available relief. When litigation begins, the policyholder typically needs an insurance dispute lawyer to address the coverage issues involved.

Do you need help dealing with an insurance company?

Insurance claims sometimes develop into disputes about coverage, valuation, scope of repair, depreciation, business income loss, or the cause of the loss. Those disagreements can be difficult to resolve without a clear understanding of the policy language, the claim investigation process.

McWherter Scott & Bobbitt represents policyholders in insurance disputes involving property damage, business losses, and other insurance coverage issues. The firm’s work often involves reviewing insurance policies, evaluating claim investigations, and addressing disagreements about how policy provisions apply to a loss.

Those disputes may involve damage to structures, personal property, or business assets. In business claims, disagreements may also arise over lost revenue or the valuation of damaged equipment.

McWherter Scott & Bobbitt also handles disputes involving life, health, disability, and long-term care policies when insurers challenge coverage or benefit eligibility. Call today or contact us online to speak to an attorney.