Should You Accept or Dispute Your Insurance Settlement Offer?

Read what the insurer actually sent

An offer usually arrives as a letter, an estimate and sometimes a check. It is easy to look only at the total. Slow down and read all three, because each one tells you something different about where your claim stands.

Florida law gives you a few things to work with. Under Fla. Stat. s. 627.70131, the insurer must send you a copy of any detailed estimate within 7 days after its adjuster generates it. When it pays or denies, it must explain in writing the basis in the policy for the payment, denial or partial denial. If the payment is less than its own detailed estimate, it must explain the difference in writing.

• Is it final? A preliminary estimate must carry a printed statement that it may be revised. A payment that is not the full and final payment must say the insurer is continuing to evaluate the claim and may issue more payments. Look for that wording.
• What was paid, and on what basis? Find replacement cost, depreciation and actual cash value on the estimate. If they are not shown separately, ask in writing for a version that shows them.
• What was denied? A partial denial should name the policy provision it relies on.

Check the scope against your damage

The scope is the list of what the insurer agreed to repair or replace. Most disagreements start here, not with the price. Walk your property with the estimate in hand and mark every room, surface and item.

• Rooms, roof slopes or elevations that are missing from the estimate.
• Repair priced where the material cannot be repaired or matched.
• Items you photographed that do not appear at all, such as contents, fencing or a damaged ceiling.
• Quantities that look short, like square footage of flooring or drywall.
• Code-required work your contractor says the permit will need.

For a fuller checklist of what an underpaid estimate often looks like, see signs of an underpaid claim. Compare the estimate with your own contractor’s estimate where you have one. A difference in scope is easier to resolve than a difference in opinion, because you can show it.

Do the deductible math in words

A check that is smaller than the estimate total is not always a mistake. Work through it in this order. Start with the replacement cost of the covered damage. Subtract any depreciation the insurer is holding back. Subtract your deductible. Subtract anything already paid on the claim. What is left should match the check.

On a replacement cost policy, the standard homeowners form pays actual cash value first and the held-back depreciation after repair or replacement is complete. That is explained in ACV vs. RCV: why your check was smaller. Which deductible applies also matters. A hurricane deductible is often a percentage of your dwelling limit, and the rules are in hurricane vs. all-other-perils deductibles.

If you have a mortgage, the check may name your lender too. Under the standard form’s mortgage clause, building losses are paid to the mortgagee and you, as interests appear. Your lender may have its own process for releasing those funds.

What the offer may be telling you, and a reasonable next step

Before you sign or cash anything

Some offers come with a release, a proof of loss to sign, or a check marked “full and final.” Language like that may close the claim for the items it covers. Read it before you sign, and keep a copy. If you are not sure what a release gives up, that is a legal question, and a Florida attorney can read it with you.

A settlement reached in DFS mediation has a short cooling-off period. Under s. 627.7015, you have 3 business days to rescind a written mediation settlement, unless you have already cashed or deposited the check. After that, it acts as a release of the specific claims presented in that mediation.

Keep an eye on the clock while you decide. A supplemental claim for additional damage from the same peril must be noticed within 18 months after the date of loss under s. 627.70132. A lawsuit on the policy must be brought within 5 years from the date of loss under s. 95.11.

Your options if you disagree

You can disagree with an offer and still keep the claim moving. Put your disagreement in writing, attach your evidence, and ask for a specific response. These are the usual next steps, from lightest to heaviest:

• Ask for a re-inspection or a written explanation. Point to the missing rooms, items or quantities.
• Send more documentation. Photos, moisture readings, contractor estimates and receipts.
• File a supplement if repairs uncover more damage. See claim supplements.
• Request DFS mediation. It is free to you and nonbinding. Adjusterman is not affiliated with DFS.
• Demand appraisal if your policy has the clause and the dispute is only about the amount.
• Talk to a Florida attorney if the dispute is about coverage on legal grounds, or you are considering a lawsuit, which requires pre-suit notice.

How mediation, appraisal and a lawsuit compare is set out in appraisal vs. mediation vs. lawsuit.

When accepting makes sense

Many offers are fair. If the scope covers everything you documented, the prices are close to your contractor’s, and the math checks out, accepting may be the sensible choice. Keep your invoices so you can claim any held-back depreciation after the work is done.

If you are unsure, a second look can help. Adjusterman offers a free claim review for Florida property owners with covered damage, and there is no fee unless there is a recovery. You can send us the offer and estimate or read how we handle homeowners claims.