Storm Damage Insurance Claims Denial | Bad Faith Lawsuits

Storm Damage Insurance Claims Denial Lawsuits

Severe storms can leave homeowners and businesses with devastating property losses. High winds, hail, flooding, and hurricanes cause billions of dollars in damage each year. While most property owners carry insurance to cover these risks, many find that their claims are delayed, underpaid, or outright denied. When insurers refuse to honor valid claims, policyholders may have legal grounds to pursue a lawsuit.

Why Insurance Companies Deny Storm Damage Claims

Insurance companies often deny storm damage claims for reasons such as:

• Policy exclusions: Insurers may argue that damage was caused by flooding, earth movement, or another excluded peril.
• Pre-existing damage: Claims may be denied if the insurer asserts that property damage existed before the storm.
• Late notice: Policies typically require “prompt notice” of loss, and delayed reporting can give insurers grounds for denial.
• Insufficient documentation: Insurers sometimes claim there was not enough evidence—such as photographs, repair estimates, or inspection reports—to support the claim.
• Wear and tear: Carriers may allege that damage resulted from normal aging of the property, not the storm itself.

While insurers are entitled to investigate claims, they also have a legal duty to act in good faith. When they deny claims without justification or misinterpret policy language, policyholders may be able to sue for breach of contract or bad faith.

It has been reported that insurance companies routinely underpay storm damage claims up to 90 percent of the claims full value. Too often, it requires legal action to obtain a fair settlement for legitimate claims.

Insurance policyholders often turn to their insurance agents for help when recovering from serious property damage to cars, homes and businesses. But this isn’t always the most efficient path after major storms and natural disasters cause water damage and flooding, wind damage, and hail damage to business and personal property.

Common Storm Damage Claims

• Damaged roofs
• Hail damage
• Vehicle damage
• Damaged siding and windows
• Fencing & gutters

Property owners and policyholders need prompt payment on their insurance claims to repair or replace damaged property and to move forward with their lives. Unfortunately, rightful insurance claims are denied when insurance companies act in breach of contract and bad faith. It is not uncommon for claim payments to be delayed for months or years, or until the company is threatened with a lawsuit.

Policyholders have very busy lives and cannot spend months negotiating with insurance companies over the amount of the storm damage insurance settlement. They often are forced to take the low-ball offers or nothing at all, unless they contact an experienced attorney to assist in recoveries.

If you think your insurance carrier is ignoring, delaying or denying your claim and think they are breaching their contract and simply protecting their own financial well-being, you may have a bad faith claim.

The Lyon Firm represents policyholders throughout the nation in insurance bad faith litigation on behalf of individuals and businesses involved in coverage disputes related to storm damage.  

Assessing Storm Damage Claims

When an insurance company acts in an unreasonable manner assessing a storm damage claim,  it is protecting their own financial well-being and are in breach of its duty to its insured.

Storm damage claims and lawsuits for bad faith require experts to assess damages because although some damage is visible, other damages can be hidden.

For example, storms may damage every window a home or business, though an untrained eye may not notice until the windows begin to leak long after the storm.

Homeowners may not realize that high winds and hail can cause micro-fractures in paint or metal on a structure, which leads to premature aging and permanent damage.

After a major flood, the costs of damage, clean up and temporarily relocation are assessed in the hardest-hit areas. The damage and sewage impact can be so severe that residents have been forced out of their homes and some businesses have closed.

Time Limitations in Submitting Storm Damage Claims

You should assess your property closely following a major storm. It is typical after strong storms for business and homeowners to develop leaks in windows and cracks in walls a year or two after their homes were exposed to a catastrophic storm. By then, it may be too late to make a claim with your insurance company, or the insurance company challenges the origin of the storm damage and refuses to pay the claim.

Legal Rights After a Denied Claim

Policyholders have the right to challenge wrongful denials. Storm damage lawsuits may be based on:

• Breach of contract: When insurers refuse to pay benefits owed under the policy.
• Bad faith insurance practices: If the company intentionally delays, underpays, or denies a valid claim, the insured may seek additional damages.
• Unfair claims handling: Many states have laws prohibiting deceptive or unfair insurance practices, which can provide additional remedies.