Why Your Insurer's First Offer is a Starting Point, Not a Final Destination

After weeks of waiting, the email from your insurance adjuster finally arrives. You open the attachment, and your heart sinks. The settlement offer is a fraction of what you know it will cost to repair your property. It feels like a final verdict, but it's crucial to understand one thing: the insurance company's first offer is almost always a starting point for negotiation.

Insurers are for-profit businesses. Their initial offers are often calculated to be the lowest amount they believe a policyholder might accept. They may use inexperienced adjusters, outdated pricing software, or simply overlook key aspects of your damage, knowing that many stressed and uninformed policyholders will accept the check without a fight.   

Here’s why you should never accept the first offer without a fight:

1. The "Scope of Loss" is Incomplete: The biggest area of dispute is often the "scope"—the detailed list of what needs to be repaired or replaced. The company adjuster might budget to clean a smoke-damaged carpet, whereas a proper restoration requires its complete removal and replacement. They might budget for a simple roof patch when a full replacement is required to maintain the roof's integrity. A public adjuster builds a competing scope of loss, meticulously detailing every necessary repair with current local pricing.

2. Depreciation is Overstated: For many items, the insurer will pay you the "Actual Cash Value" (ACV) upfront, which is the replacement cost minus depreciation. They will then hold back the remaining "Recoverable Depreciation" until you actually complete the repairs. Insurers often apply excessive depreciation to lower their initial payout. We challenge these calculations to maximize your upfront payment.

3. Hidden Damages are Missed: The initial adjuster's inspection is often quick. They can easily miss damage hidden behind walls, under floors, or in your HVAC system. A thorough investigation led by your own expert often uncovers significant damage that dramatically increases the true value of the claim.   

4. Policy Benefits are Ignored: Your policy is a complex contract with many potential coverages you may not be aware of, such as code upgrade coverage, debris removal, or extra expense coverage. An expert review of your policy can uncover benefits the insurer conveniently failed to mention.

The insurance claim process is a negotiation, and you should not go to the negotiating table alone. If you've received a lowball offer, it's not the end of the road. It's a signal that it's time to bring in a professional advocate. Contact Friedman & Associates to have your offer reviewed for free. We'll show you where the insurance company left money on the table.