Imagine waking up one day and as your walking into your living room you feel a cold wetness surround your foot. Half asleep you look down and your entire living room is covered in water. What’s worse? You have brand new wood flooring. As you continue to walk across the water puddled room you begin to notice the flooring is uneven, every so often you’re stepping on what feels like a massive lump on the floor. You call out your water mitigation company who dries out the flooring and identifies the source of the water. As it turns out, when you turned on your washing machine last night before bed one the connections snapped causing water to leak through your wash room wall into your living room. And now, your brand new wood flooring is warped! Maybe it’s not your brand new wood flooring, maybe it’s your 5 year old satin white carpet and every step you take is like a mop being rung out on your foot. Either way, your flooring is ruined!
The water mitigation company recommends that you file a homeowner’s insurance claim as Sudden and Accidental Water Damage is covered under most Home Owners Insurance Policies. You call up your insurance carrier and you file your claim. The insurance company tells you that they will have someone come out and evaluate the damage. Within 5 days an Insurance adjuster comes to your house and evaluates the damage, before they leave they tell you that your Insurance Carrier will be in touch with you shortly regarding the damage. Thereafter, you receive an invoice from the Water Mitigation Company for $7,000. Additionally, Your Floorboards are missing throughout the entirety of your wash room and along the adjoining wall of your living room, paint is peeling along the bottom of your living room wall, and again, your flooring is ruined.
You’re not worried though, because this is covered under your insurance policy, you’ll be receiving a check from your Insurance Carrier. Another two weeks goes by and you receive a letter, along with a check in the mail, which reads something like this:
Dear Homeowner,
This letter is to inform you that “insurance carrier” has completed its investigation of your claim. According to our investigation completed by “Claims Adjuster”, we have made a determination you are owed the following amount pursuant to terms of your policy of insurance.
| Line Item Total | $4,322.11 |
| Replacement Cost Value | $4,322.11 |
| Less Depreciation (including taxes) | ($1,212.03) |
| Less Deductible | ($2,500.00) |
| Net Actual Case Value Payment | $610.08 |
The company does not intend by this letter to waive any policy defenses and reserves its right to assert such additional policy defenses at this time.
You are a valued policy holder and we appreciate your business. If you have additional information regarding your claim which has not been previously considered, or if you desire any additional explanation regarding this matter please contact me at the number listed below.
Now you’re holding a check from the Insurance Carrier for just over $500, looking at the invoice from the Water Mitigation Company for $7,000.00, and there’s an additional several thousand dollars’ worth of damage to your home; you’re in what we as Attorneys call Pre-Suit, that is to say, you’ve filed a claim and you’ve been underpaid or in a lot of cases not even paid at all and you’re seeking what you’re contractually owed pursuant to the terms of your policy. If you don’t already have representation, this would be the time you would want to go ahead and get it.
Generally, there are two routes to the pre-suit process. The first route I term the “speaking” route. That is to say that you or your representative is in active communication with the insurance carrier. If this is the case, there are a couple different things that could happen. The first and most common type of dispute resolution that the Insurance Carrier will elect is mediation. Mediation is method of dispute resolution involving a neutral third party called a mediator who tries to help the disputing parties reach a mutually agreeable resolution. The second most common type of dispute resolution is what’s called Appraisal. Most Homeowners Insurance policies have what’s commonly referred to as an Appraisal Clause. I have included a link to another blog article which discusses the appraisal process in more detail, for now, it’s important to know that once the claim is submitted to Appraisal, the cost of repair determined during the appraisal process is final and binding on both parties. The third option the insurance carrier may take is to issue additional payment without use of the either of the two methods above, however, this is extremely rare. Lastly if the Insurance Carrier elects none of the options discussed above, they will issue what’s called a “stand by decision letter” indicating just that, that they stand by their decision.
The second route is what I term the “non speaking” route. That is to say that the Insurance Carrier is simply not responding to inquiry by you or your representation or they have already issued a stand by decision letter. In this case, the State of Florida has outlined a process, by which to go about disputing the amount of a claim. The first step is filing a Notice of Intent to Initiate Litigation with Florida Department of Financial Services. The Notice of Intent to Litigate is a state designed system that puts the Insurance Carrier on notice that you dispute the Insurance Carriers assessment of the loss. Once Notice of Intent to Litigate has been filed with Florida Department of Financial Services the Insurance Carrier has 10 days to respond in writing to either Accept Coverage, Denying Coverage, or assert the right to respect the property. If the Insurance Carrier asserts its right to re-inspect the property, it has an additional 14 days from the date of that notice to re-inspect the property and provide a coverage decision. It should also be noted, if the Notice of Intent to Litigate indicates any acts or omissions of the insurance carrier other than denial of coverage, for example, failure to make a coverage determination at all, then the Insurance Carrier must within 10 days make an offer of settlement or initiate one of the alternative dispute resolutions listed above. In this situation, if the Insurance Carrier initiates one of the Alternative Dispute resolutions, they have 90 days to complete before you are eligible to file suit.
If after all this the insurance carrier has maintained its denial or you have been unable to reach a resolution as to coverage of your claim you have now reached the Litigation stage. The Pre-Suit process for Homeowners Property Insurance Claims can be complicated if you’re not predisposed to such processes. It is important to work with your attorney as you move through the Pre-Litigation Process. Alternative Dispute Resolutions like Mediation and Arbitration are technical processes that require preparation and attention to detail. We take great pride in walking each one of our clients through the Pre-Suit Process to ensure they are well informed and prepared every step of the way.
