A policyholder has a limited number of options when a legitimate claim turns sour and the chances of being fully compensated are very slim or nonexistent. One of the first steps to take is to decide who in the family will be the "point person" -- the one dealing with the day to day issues of the problems. The person selected needs to have the time and energy available to devote to establishing and recovering any money or benefits due. This can sometimes be all consuming.

Next, you need to thoroughly analyze all options available to you, and there are really only three:

Legal: Usually, this option is best if bad faith is involved or if the insurer can be held accountable for personal injuries arising out of their actions or inactions. However, this process can be expensive (if contingency-based, expect to pay between 33 - 45%, depending on if out-of-pocket expenses are absorbed by the attorney) and time consuming. The appointment of the right attorney is critical. (See How to Hire an Attorney).
Audio about Litigation

Appraisal: Most policies contain language giving both the insurer and the policyholder the right to demand the "Appraisal Process." This process is only applicable if coverage has been accepted (not denied) and the dispute revolves around the cost to repair or replace; it cannot address personal injuries or questions of coverage. The Appraisal Process can be triggered by the homeowner notifying the insurer in writing. The homeowner then selects an "Appraiser", someone who can wear the hat of advocate. The insurer also selects an Appraiser. Both Appraisers must be independent. In other words, they should not have an existing business or personal relationship with either party involved otherwise it can be overturned. The two Appraisers must agree on an Umpire or a judge will appoint one. If the Appraisers are unable to agree on the amount of damage they will submit their differences to the Umpire. The Umpire should also be independent and should not have any sort of business or personal relationship with either side. Ultimately any two of the three reaching an agreement on the amount of damage constitute an award. The award is binding and is usually paid quickly. A thorough and fairly involved Appraisal may cost the policyholder between $15,000 and $25,000. The cost of the Umpire is split equally between the policyholder and the insurance company. (See the Appraisal Process).
Audio about Appraisal

Public Adjuster: A public adjuster is your third option. Public adjusters usually are licensed by the Department of Insurance in the state in which they operate. Public Adjusters can address coverage issues (if a legitimate claim is denied, they may be able to prove coverage exists) and may be able to help prove the actual costs of repair or replacement. A Public Adjuster cannot seek any recovery for a personal injury claim. Public adjusters typically charge between 10-30% of the recovery. Some work on an hourly basis. If a Public Adjuster is retained, be sure to have a plan outlined should the public adjuster be unable to successfully recover money due you. If a lawyer is eventually retained, you do not want to owe fees to both a Public Adjuster and an attorney. (See Hiring a Public Adjuster).

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