Insurance Claim Dispute

Common Types of Claim Disputes

Insurance claim disputes fall into several categories. Understanding which type of dispute you're facing helps you choose the right resolution strategy.

Coverage Disputes

The insurance company argues your damage isn't covered under your policy. These disputes involve policy interpretation—what's covered, what's excluded, and how policy language applies to your specific situation.

Valuation Disputes

The company agrees your damage is covered but disputes how much they owe. These are the most common disputes and typically involve disagreements over repair costs, depreciation, or scope of damage.

Causation Disputes

The insurer argues your damage wasn't caused by a covered event. They may claim the damage was pre-existing, caused by maintenance issues, or resulted from an excluded peril.

Process Disputes

Disputes over how the claim is being handled—delays, non-responsiveness, or failure to follow proper procedures.

Dispute Resolution Options

Internal Appeal

Formal appeal within the insurance company's process. Required before external options.

Appraisal

Binding dispute resolution for valuation disputes. Each side hires an appraiser; they select an umpire.

Mediation

Non-binding negotiation with a neutral mediator. Faster and cheaper than litigation.

Department of Insurance Complaint

File a complaint with your state regulator. Often accelerates resolution.

Litigation

File a lawsuit. Most expensive option but sometimes necessary for bad faith cases.

How to Resolve Claim Disputes

Follow these steps to resolve disputes effectively, starting with the least expensive options.

Document Everything — Create a comprehensive record of all communications, estimates, and evidence
Understand Your Policy — Read the relevant sections carefully and understand the company's interpretation
Get Expert Opinions — Obtain contractor estimates, engineer reports, or other expert assessments
File a Formal Appeal — Submit a detailed written appeal addressing the dispute systematically
Invoke Appraisal — For valuation disputes, use your policy's appraisal clause
File Regulatory Complaints — Contact your state insurance department if the company is acting unreasonably
Consider Mediation — Propose mediation for complex disputes
Consult an Attorney — For high-value claims or bad faith situations, get legal advice

Frequently Asked Questions

How long do insurance claim disputes take to resolve?

Internal appeals typically take 30-60 days. Appraisal takes 60-90 days. Litigation can take 1-3 years.

Do I need a lawyer for a claim dispute?

Not necessarily. Many disputes can be resolved through internal appeals or appraisal without attorneys. However, complex coverage disputes or bad faith cases often benefit from legal representation.

What is the appraisal clause and when should I use it?

The appraisal clause is a policy provision for resolving valuation disputes. Use it when you and the insurer agree damage is covered but disagree on the amount owed.

Can I sue my insurance company?

Yes, but litigation should be a last resort. You typically must exhaust internal appeals first. Lawsuits are expensive and time-consuming.

What if I lose my dispute?

Depending on the resolution method, you may have additional options. For example, if an internal appeal fails, you can still pursue appraisal or litigation.