5 Strategies Insurance Companies Use to Dodge Payouts on Property Insurance Claims

As a commercial property owner, safeguarding your investments against unforeseen perils such as fires, storms, or theft is paramount. Property insurance is your safety net, providing financial protection in the event of such mishaps. However, the process of claiming your rightful compensation from your insurance provider can sometimes prove to be more complex and challenging than expected. Insurance companies, for various reasons, occasionally employ strategies aimed at reducing or avoiding payout on claims. As seasoned public insurance adjusters, we’ve come across a myriad of these tactics, and we want to share with you five common strategies that insurance companies may employ.

Disputing the Cause of Damage:

The first common strategy is disputing the cause of damage. Insurance companies may argue that the cause is not covered under your policy, attributing it to factors like poor maintenance or pre-existing conditions, which typically fall outside of your policy’s coverage. They may even insist that the damage was not caused by a covered peril, but by something excluded in the policy. It’s important to understand the fine print in your policy, including the inclusions and exclusions, to effectively counter such arguments.

Denying Claims:

Secondly, insurance companies may resort to denying your claim outright, often providing a range of reasons that seem justifiable but are potentially contestable. They may argue that you failed to notify them in a timely manner, did not fill out the claim forms correctly, or that you did not take adequate steps to mitigate the damage. Always ensure that you understand your policy’s requirements, follow the claim submission process meticulously, and document every action taken post-loss to effectively counter this tactic.

Underestimating the Extent of Damage:

A third tactic is the underestimation of the extent of damage. Insurance companies have been known to undervalue the actual cost of repair or replacement in their estimates, leading to an unfair settlement offer. Having an independent appraisal of the damage and the cost of repair or replacement can provide a robust defense against this tactic.

Interpreting Policy Language in their Favor:

Fourthly, insurance companies might interpret ambiguous policy language in their favor, particularly when it comes to complex or technical aspects of the policy. In such cases, it’s crucial to have a professional public adjuster or legal representative on your side to challenge this interpretation and push for a reading that benefits you.

Delaying Claims Processing:

Lastly, a common frustration among policyholders is the delay in claims processing. While there might be legitimate reasons for delays, such as the need for further investigation, some insurance companies might use delaying tactics as a strategy to frustrate policyholders into accepting lower settlements. It’s important to be patient and persistent, and to keep meticulous records of all interactions with the insurance company.


Understanding these tactics empowers you as a policyholder, enabling you to better navigate the complex landscape of property insurance claims. Remember, you don’t have to face this journey alone. As public insurance adjusters, our mission is to advocate for commercial property owners and ensure that you receive the fair compensation that you are entitled to. Always consider seeking professional help when dealing with property insurance claims to ensure that your rights are protected.

Have questions about your property insurance claim? Feel free to contact Stark Loss for more information about how a Public Adjuster can help.

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