Has State Farm Denied or Underestimated Your Roof Claim?

by Oct 18, 2021Article

Imagine the following scenario: you are a Florida homeowner. Your home is insured with let’s say State Farm, the largest insurance company in the United States. Your home suffers a devastating loss due to a hailstorm or wind.

You promptly report the claim to your insurance carrier thinking that it will treat you fairly. After all, State Farm repeatedly runs television commercials featuring NBA player Chris Paul saying Like a good neighbor, State Farm is there.

A representative is sent out to inspect your property who is super nice to you in person and tells you “I do see the damage you mentioned.” You start thinking maybe State Farm is in fact that neighbor.

To your surprise, a few weeks or even months later (under Florida law, insurance companies have 90 days from notice of the loss to make a coverage decision), you receive a letter from State Farm saying your claim is denied or that the damage to the roof does not exceed your policy’s deductible based upon their inspection.

This is when I receive a call from a concerned homeowner with many anguished questions. In this blog post, I want to note several reasons those insured by a company with similar homeowners policies to State Farm’s need to be careful right from the start after sustaining a loss.

Granted, it is always important these steps are followed (promptly report the claim, protect the property from further damage, allow the carrier access to inspect the property, document the damage), but with State Farm, or a similar insurance company, it can be critical.

Here are three reasons why.

  1. Sworn Proof of Loss: Many carriers request what is called a Sworn Proof of Loss (SPOL) as part of your insurance claim. This is simply a statement you make under oath to your insurance company in which you detail the damages your property has sustained as a result of the loss – be it to the dwelling, personal property, etc. State Farm’s homeowners insurance policy has a specific provision that requires you to submit a SPOL at the TIME your claim arises. The onus is on the homeowner to do this. How would you know this if you did not study your policy? I am not saying it is intentional but it could function as a trap. Most carriers’ policies have to request an SPOL in writing in order to trigger the SPOL requirement so the onus is on them. Let’s say you did not know this requirement and did everything else in filing your claim. Florida Courts determined that if a homeowner files a lawsuit against his insurance carrier before submitting a SPOL to the carrier, his lawsuit is “premature.” This determination could relieve your carrier of its duties to you, the homeowner, under your insurance policy. In other words, your failure to comply with the SPOL requirement in your policy could provide a “get out of jail free” card to your insurance company. That means they would no longer need to pay your otherwise valid homeowner’s claim!
  2. Appraisal: As I explained in prior blog post, this is an alternative way for homeowners and their insurance companies to determine the cost of the homeowner’s loss. Generally speaking, it only applies when there is a pricing dispute. Some insurance carriers love to send cases to appraisal for several reasons. First, it can be used to deny homeowners access to the courts. Instead of having your case heard by a judge and jury, your claim will be heard by an umpire. A common strategy is to have a discussion about cost of damages and then invoke appraisal when the homeowner provides them with a quote. Second, if appraisal is invoked prior to filing the lawsuit, the homeowner’s attorney is not entitled to attorney’s fees/costs.
  3. Money: Given that Insurance Companies, like State Farm, have deep pockets, it is important that a homeowner do everything to protect themselves during the investigation of the claim. This seems counter-intuitive but instead of paying the claim out of their deep pockets they use their financial resources to hold out from settling the claim even as attorneys’ fees are accruing. They can litigate a case for months or years, notwithstanding the attorney fees they have to pay if they lose the case in court.