Dear David: Do Insurance Companies Cover Damages Anymore?

Dear David,

Do insurance companies cover damages anymore? It seems like almost every situation is met with some type of resistance. Scope, price, material costs, replacement cost, actual cash value, cause of loss, water damage, and even fire issues with smoke to name a few. Between program work, the supply chain issues, labor shortages, and demand brought on by recent weather events it feels like we must fight on every front. 

Dear Covered Damages,

The appetite for resistance to claims does seem to have evolved. A change to the notion of “business as usual” has placed pressure on the balance sheets of contractors and insurance companies.  No shortage of opinions exists as to the possible “why” behind the change.  The many factors of the markets can be pointed to as a possible cause.  

One opinion links the current market conditions back to the insurance industries response to the COVID-19 pandemic. Posting approximately $48Billion in defense reserves and mobilizing governmental relations departments across the states and federally. This response has resulted in changes to insurance consumer protections, case law, and the procedures used in the adjustment of claims. 

Shifts in the market are no surprise.  Markets respond to forces.  The added pressure of the mergers and acquisitions in the restoration industry adds another layer to the complexity.  Trying to secure market share means that larger operations will put downward pressure on smaller operations as they look to aggregate cash flow over individual profit on a specific project.  

The best way to confront these forces is to surround yourself with a team of knowledgeable and experienced professionals.  In a previous article, we discussed how doing the “right thing” can get contractors into trouble.  If a contractor really wants to understand what is covered then they should engage a good public adjuster.  If contractors are engaging with assignments of benefits they should be aware of the ramifications this can have on their claim.  For example, it could mean that the contractor can only capture their costs of the work based on the policy language.  Most policies say that the insurance company “owes the lessor of… the actual costs incurred to repair, restore, or reconstruct damaged property.” 

The thing you should take-a-way from this article is—Who is on your team? 

Want to have your question, comment, or concern addressed in an article or arrange a private conversation? Send inquiries to:

David Princeton

David Princeton, CPCU, AMIM, AIC, CSRP, is the principal consultant of, an expert witness, and contributing author of Be Intentional: Culture. He attends Marquette University Law School and previously served as a director of corporate risk and as a lead claim specialist.

Advocate Claim Service takes the anxiety out of claims. Our mission is the strategic presentation of claims to get policyholders the benefits owed under an insurance policy. Claim consulting services are provided to Policyholders, Brokers, and Attorneys. As licensed insurance professionals, we have over 35 years of insurance claims experience across a wide array of coverage lines. In addition, our Insurance and Risk Management consulting practice is well suited to provide clarity to just about any insurance program before a loss occurs.

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