If you've received a settlement that doesn’t seem to match the damages you've suffered, you might be dealing with an underpaid insurance claim. While insurance companies are supposed to evaluate claims fairly, the reality is that they often minimize payouts.
By understanding how your insurance coverage works and knowing when to seek legal action, you can protect your rights. Keep reading to learn more about underpaid claims and what you can do to protect yourself.
To know if your insurance claim was underpaid, you first need to understand how most insurance companies calculate the value of a claim. Here's how to tell if the settlement you received truly covers the full extent of your losses:
One way to spot an underpaid insurance claim is by reviewing how the insurance company evaluated it. If any important information was missing or ignored, your payout may not reflect the full value of your losses.
It’s also important to look at how the fault was assigned when reviewing a possible underpaid claim. If the insurer wrongly placed some of the blame on you, that decision could reduce your payout.
A big part of evaluating an insurance claim is how the insurance company calculates your damages. These are usually split into economic and non-economic damages.
If your insurance company underpays your claim, you don’t have to accept it as final. You may be able to pursue fair compensation, even without taking legal action. Here's what to do if your insurance company underpays your claim:
It's important to save all communication with your insurance company. These can include emails, phone call logs, letters, and texts. With these records, you can help show delays, inconsistencies, or bad faith behavior.
Speaking to an experienced lawyer who handles underpaid claims can be essential. They’ll review your case, explain your options, and help you decide whether you should pursue legal action.
Read through your insurance policy carefully to understand the coverage you’re entitled to. This helps you identify if the insurer failed to meet its obligations. Your attorney can help you understand your policy.
Ask the claim adjuster for a detailed explanation of why your claim was denied or underpaid. Vague answers could be a sign of bad faith.
Use your insurer’s appeals process to challenge the decision. This gives the company a chance to reconsider before you take further action.
If you believe the insurer acted unfairly, you may be able to file a complaint with the Texas Department of Insurance. They may step in and investigate.
If the issue isn’t resolved, you can send a demand letter to your insurer explaining what you believe you’re owed and why. A demand letter formally informs the insurance company of your intent to sue if your demands are not met..
If the insurance company refuses to pay fairly, your attorney may consider filing a bad faith lawsuit. You could be entitled to more than just the original claim amount.
Underpaid claims can add unnecessary stress and financial burden to an already difficult situation, but some insurance companies don’t care about the impact of these negative decisions. Underpaid claims are also far from the only type of bad faith practices insurers engage in. Here are some tactics insurance companies use when acting in bad faith:
When an insurer fails to honor a valid claim or attempts to minimize payouts, it may be time to consider pursuing legal action. At that point, you’ll need a bad faith insurance lawyer. Here’s how they can help:
Identifying and addressing an underpaid insurance claim can feel overwhelming, especially if your insurer is uncooperative. But with the right steps and legal guidance, you can challenge unfair treatment.
At Millin and Millin Attorneys, we offer strong legal support to help policyholders stand up to insurance companies. Our Texas insurance lawyers have a proven track record of handling underpaid claims and helping clients protect their rights. If you’re ready to take action, reach out today for a free consultation.
