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Our Michigan insurance claim valuation lawyers represent clients in disputes with insurance companies. We help both individuals and businesses who are being treated unfairly by the adjuster.

A major area of conflict after a loss is the claim valuation determined by the adjuster.

Although many people believe the insurance appraisal is the binding amount on a claim, this is not true.

Insurance companies typically undervalue claims with the hope that an insured will accept the money as payment in full. However, the insured should not always accept the offer because it may be much too low to satisfy the claim.

If you are having a difficult time dealing with the insurance company, you need to hire an experienced attorney to assist with your claim. Otherwise, you may be paid far less than you are entitled to receive under the policy.

What is an Insurance Valuation?

An insurance valuation is a provision in many insurance policies that specifies the amount of money an insured will be paid in the event of a covered loss.

Essentially, it states the basis of how a claim is to be paid and the amount. This section of the policy will likely determine how a claim payment is calculated.

It is important that the adjuster use the proper provision in valuing a claim to prevent an underpayment of the proper amount.

Common Types of Insurance Losses

There are a number of different types of insurance losses covered under a policy. The most common include:

  • Building, structure, and real property
  • Machinery and equipment, especially in industrial businesses
  • Contents, both in and outside a building
  • Personal property inside the building
  • Inventory, including raw materials, parts, and products
  • Business interruption, such as loss of income or profits
  • Additional living expenses, like temporary housing
  • Personal injury claims

A single insurance claim may include a number of these losses.  For example, a fire can destroy the building and its contents.  An insurance claim will include all possible claims.

What are the Different Types of Insurance Valuations?

There are several types of valuation clauses used in insurance policies. The type of coverage you have will determine how your claim is valued.  The common types are:

  • Replacement cost, which refers to the amount it takes to replace damaged or destroyed property with brand new buildings, equipment and furnishings.
  • Actual cash value (ACV), which is the replacement cost of property, minus the accumulated depreciation for age and wear.
  • Agreed value, which is an agreed upon amount specified in the policy before a loss even occurs.

Replacement cost usually pays the highest amount on a claim.  It is important to make sure the insurance company is using the proper valuation type in appraising the claim.

For example, a home damaged by a windstorm may require a new roof. Under replacement cost, the full amount to for a new roof and windows is paid.

Under actual cash value, it would be the replacement amount less the depreciated amount of the existing roof.  The payment would be much less in an actual cash value claim.

How Do Insurance Companies Determine Claim Valuations?

Insurance companies have adjusters the utilize to evaluate claims.  Many adjusters are actually employed by the insurance company. Others are contracted outside adjusters.

The adjuster will review your policy to determine which valuation clause applies to your loss.  The adjuster will then begin the investigation of the claim. The time it takes depends on the size and extent of your loss.

Many insureds hire their own public adjusters for an independent appraisal. This is often a very smart move because it can be used to negotiate the settlement payout at a later date.

For buildings and structures, it is likely that contractors and builders will be consulted to assess the damage.

A written quote will then be given to restore the building to its pre-damaged condition.  This will include the structure, electrical, plumbing, and all fixtures.

An appraisal will also be done for the loss of contents. This can range from furniture, to applies, and even clothing.

The insured will be required to provide an itemization of the damaged or destroyed contents. Photos or videos of the contents will strengthen your claim.

The adjuster will then calculate the total losses based upon the insurance valuation clause in the policy. A written appraisal will be provided to the insured to review.

The insured can accept the insurance valuation or counter with a valuation by an independent appraiser.

Can I Sue the Insurance Company for Undervaluing my Claim?

You can sue the insurance company for a low appraisal amount.  If your claim is undervalued and the insurer does not negotiate in good faith, your best remedy is to file a lawsuit.

In the lawsuit, the main issue will be the manner in which the claim valuation was determined. The insurer will rely on its adjuster and the claimant will demand valuation of the independent adjuster.

Most cases ultimately settle for a negotiated amount between the two appraisals. However, some cases do go to trial.  In those instances, a judge or jury will determine the proper amount to pay the claim.

Do I Need a Lawyer to Make an Insurance Claim?

You do not need a lawyer to make your insurance claim. In fact, many people hire their own public adjuster and work directly with the insurer to resolve the claim.

However, having an experienced insurance lawyer will increase the likelihood of receiving full payment from the company.

Additionally, it is wise to have legal counsel if it is necessary to file a lawsuit.  The insurance company will have a team of lawyers and you need to have your own top-rated lawyers to battle them.

How Much do Lawyers Charge for Insurance Cases?

Although some lawyers charge legal fees on an hourly basis, we generally charge a percentage of the settlement payout at the end of the case. This is known as a contingent fee agreement.

This allows the claimant to have the best possible legal representation without costing any money for the process.

Contact an Insurance Valuation Lawyer

If you are getting the runaround from your insurance company or received a low-ball offer, call our law firm today.

We will listen to your story to see how we can help you through the claim process.

Contact us now to get started on your case.

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