What additional charges related to a claim can be applied against the policy limit?

After filing a claim, I learned the insurance company mistakenly moved my boat to a salvage yard and had to pay an additional $3,000 to have it moved to a safe location. The property liability limit is $25,000 and I filed a claim for $24,000 but they’ve only offered to pay $22,000 and that includes the $3,000 for their mistake! Is this fair and is there anything I can do to challenge them?

Answer
I’m not sure it is fair; after all, it was their mistake. But you can take action if you feel your claim has not been appropriately valued.
The first thing you need to do is review the claim letter they sent to understand how they arrived at $22,000. The correspondence should provide a detailed outline of the costs and reasoning for the settlement offer. If you still disagree with their assessment, do not accept the settlement and contact the insurance company to file an appeal.
When filing your appeal, you should be able to provide the following:
  • A police report (if available)
  • Any correspondence you’ve had with the insurance claims adjuster
  • Pictures of the damage
  • Receipts for any damages paid out of pocket
Hopefully, after you voice your concerns and file your appeal, the insurance company comes back with an offer you can both accept. If your appeal is denied, or you still consider it too low, you can attempt to settle the dispute in mediation. In mediation, an unbiased third-party mediator will work to help you reach an agreement.
If mediation fails or is not an option, you can hire a lawyer who specializes in insurance claims. However, this could lead to an expensive and lengthy lawsuit and, after the lawyer fees, could leave you taking home less than their original offer.
Once the claim has been settled, it may be a good time to shop around for a new insurance policy, especially if your rate has increased. Consider giving Jerry a try. Jerry compares quotes from many insurance companies, like Nationwide and Allstate, to ensure you are never overpaying for your coverage. For coverage on your boat, you can download the Jerry app and connect with an agent in minutes by text or over the phone.
Jack Walsh
Answered on Nov 02, 2021
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