Home Insurance Claim Lawsuits: Were You Underpaid?
Last Updated on May 2, 2023
Important Information
Attorneys working with ClassAction.org are no longer investigating this matter. The information here is for reference only. A list of open investigations and lawsuits can be viewed here.
At A Glance
- This Alert Affects
- Texas residents who suffered damage to their homes, submitted a homeowners’ insurance claim, and had their claim approved.
- What's Going On?
- Attorneys working with ClassAction.org are investigating whether insurance companies are properly paying out homeowners’ insurance claims. Reports have surfaced that some insurance companies may be ripping off policyholders – and the attorneys are looking to help these homeowners take action.
- Is There Any Proof?
- Several lawsuits have already been filed alleging that insurance companies took too much out of homeowners’ payments. More detail on the alleged practice can be read below.
- How Can a Lawsuit Help?
- You may be able to collect the difference between the amount you were paid and the amount you should have been offered.
If your homeowners’ insurance claim was approved following a fire, storm or other unexpected event, it’s possible that you may have been ripped off.
Attorneys working with ClassAction.org are investigating whether some insurance companies are engaging in a scheme in which they intentionally deduct more than they should from policyholders’ claims in a way that consumers may never even notice. It’s possible that class action lawsuits could be filed against these insurers to help homeowners get their money back.
How Could I Be Missing Out on Money?
Assume that a storm hits your home and damages your roof. Your insurance company sends out an inspector who determines that the damage is indeed covered under your contract.
The adjuster may then provide you with an estimate of loss that determines how much it will cost to remove and replace your roof with new materials. From that estimate, your insurance company will typically deduct a certain amount for “depreciation of materials” because, as your roof aged, it became less valuable.
In an effort to save money, however, some insurance companies may also be depreciating labor costs even though the cost of labor does not depreciate over time.
In other words, homeowners may not be getting paid for the full cost of labor to repair the damage to their properties.
The worst part is that policyholders won’t even realize that they are losing money because many insurance companies’ estimate of loss paperwork will include both labor and materials on the same line. These line items are often marked “R&R,” which stands for repair and replace, making it impossible to determine what costs are actually being depreciated.
Lawsuits Filed Against Insurance Companies
Several lawsuits have already been filed accusing insurance companies of taking advantage of their customers. In one lawsuit filed in Texas, Allstate was accused of illegally depreciating labor costs – which, unlike materials, don’t go down in value over time.
Now, attorneys working with ClassAction.org are looking into whether this is an industry-wide practice and whether additional insurers – including State Farm Insurance, Farmers Insurance, State Auto Insurance and others – may have violated state law and the contract terms they set with policyholders.
How a Class Action Lawsuit Can Help
Through a lawsuit, homeowners may be able to recover the difference between what they were paid and what they should have been paid, as well as help ensure their insurer is honest in future dealings with its customers.
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