Homeowners Insurance

“I’m an insurance adjuster, and I was shocked when my insurance company refused to pay for the damage to my home and personal property. I hired Neal, and he made them pay for the damage plus his fees and costs. I couldn’t be happier with the result.” S.R.P.

Damage to your home can be devastating both financially and emotionally. For most people, it is the biggest asset they own, and their lives are centered on their home and their personal property. To your insurance company, however, property damage is just normal everyday business.

It is important that you make sure that the insurance company properly handles your claim and that you receive all of the benefits of the policy. You paid the premiums, so you are entitled to receive the benefits of the policy. A homeowner’s policy generally covers the cost of restoring or replacing the damaged property to the condition it was in prior to the damage. If only it were that simple. The insurance policy is a complicated contract that includes a variety of terms, including coverages, perils, limits, exclusions, deductibles, and conditions. There may also be an endorsement that adds, deletes or changes the terms of the policy. It is not unusual for a policy to provide coverage, then exclude it, but in certain circumstances, provide coverage anyway and then limit the amount it pays for the damage.

Coverages. Typical coverages include:

  • 1 Your home
  • 2 Separate Structures. A detached garage, shop, pool, fence, shed, Etc
  • 3 Personal Property or Contents. Furniture, clothes, electronics, toys, pictures, Etc
  • 4 Loss of Use or Additional Living Expenses. The extra costs incurred if you cannot live in your home as a result of the damage or due to the necessary repairs
  • 5 Additional Coverages. These may include additional amounts for debris removal; temporary repairs to protect the property from additional damage; trees, shrubs, plants, and lawns; fire department service charges; credit card fraud; freezer food spoilage; mold or fungus damage
Law Offices of Neal Bonrud PLLC

Perils. Typical perils include Wind, Fire; Water Damage; Vandalism; Smoke; Theft, Freezing, and Electrical Power Surges.

Exclusions. Typical exclusions include:

  • 1 Earth Movement
  • 2 Water Damage (that’s right, it is a covered peril, then excluded but covered in certain circumstances)
  • 3 Pollution
  • 4 Wear and tear
  • 5 Faulty Workmanship or Construction
  • 6 And the list goes on and on

Conditions. Typical conditions include:

  • 1 Your Duties After Loss. It is important that you comply with these requirements
  • 2 Loss Settlement. This explains how the insurance company will pay for the damage
  • 3 A policy requires that you agree to an appraisal if there is a disagreement about the amount necessary for replacement or repairs. (A provision is often misused by insurance companies in situations where it does not apply. It does not apply to coverage determinations or interpretations of the policy)

The insurance adjuster handling your claim does NOT work for you. They work for the insurance company. They should know the insurance policy and properly investigate your claim, but they often do not. Homeowners' insurance claims are often wrongfully denied or underpaid.

Business Insurance

“I own several commercial properties, and when I need help with insurance, I call Neal. I had a building that suffered wind damage, and Neal handled the claim with the insurance company. When they tried to underpay the claim, we took them to court. We settled the case for the full amount of the damage, plus they paid Neal.” P.O.

Damage to buildings, equipment, or inventory can put the survival of a business at risk. If a business is shut down due to a fire or flood, income, customers, and employees can be lost. A business should not accept an adjuster’s opinion regarding coverage and the cost to repair or settle with an insurance company unless you, as the business owner, are sure that you are being treated fairly.

Law Offices of Neal Bonrud PLLC

Coverages. Typical coverages include:

  • 1 Property including buildings, equipment, fixtures, and inventory
  • 2 Business Interruption which typically includes lost profits and continuing operating expenses, including payroll
  • 3 Additional Expenses which may include the costs incurred for moving to a new permanent or temporary location
  • 4 Loss of Rent for loss of income from rental properties
  • 5 Utility Services which often provide specific coverage for losses incurred due to an interruption of utility services
  • 6 Liability coverage, including the legal costs of defending your company from lawsuits

The insurance adjuster handling the claim does NOT work for your business. They work for the insurance company. They are required to provide all of the coverage available in the insurance policy, but they often do not. We have taken insurance companies to court for wrongful denial and underpayment of covered commercial losses and made them pay what they owe.


“When my husband suddenly passed away in an accident, the life insurance company refused to pay on his accidental death policy. They claimed that they didn’t have to pay because of preexisting conditions. My probate lawyer recommended Neal. It didn’t take long before I received the full policy amount plus interest.” M.B.

It would seem that an insurance company cannot deny a life insurance claim when someone has died, and they had life insurance. Wrong! If they can find any way to deny it, they will.
Accidental death policies contain so many exclusions that it may seem that no one could actually be covered by the policy. Insurance companies routinely deny these benefits with exclusions for pre-existing conditions or contributing factors. Do not accept the denial. There may still be coverage as courts have determined that these exclusions often do not apply. We have demanded payment from life insurance companies and they have paid the full amount of the policy, and more, for wrongfully denying coverage.

Law Offices of Neal Bonrud PLLC

You are entitled to the full benefit of the insurance policy you purchased. The insurance company needs to return your property to the condition it was in prior to the damage. Washington is one of a minority of states that not only requires insurers to pay for the damage but also the diminished value to your property if there is damage that cannot be repaired. Damage to the frame or metal structure of a car, boat, or RV may not be obvious when hidden by a new fender or bumper, but it is still there. The insurance company owes you for the diminished value of your vehicle as a result of the damage.

“My motor home was struck by lightning and I was getting the runaround from my insurance company. I hired Neal and he represented me in negotiating with the insurance company. Once Neal took over the claim they paid for the damage.”

You may think that there is no way to fight the insurance industry when they have shortchanged you by a few hundred or a thousand dollars on a claim. It may not seem possible to hire a lawyer to make them pay the full amount they owe. The insurance companies are counting on it. It may only be a few hundred dollars to you, but when it happens to hundreds or thousands of people, the money starts to add up. It can be a way to increase profits for an insurance company. In Washington, you do not have to accept unfair treatment from your insurance company. If you prevail against your insurance company on an IFCA claim, you are entitled to your attorney fees and litigation expenses. It does not matter if the fees and expenses total more than the amount of the claim; the insurance company is obligated to pay the reasonable attorney fees and expenses.

Insurance Bad Faith

Insurance companies owe a duty of good faith and fair dealing to their customers. They owe the duty to the people they cover under the policy. That usually includes the policyholder and often their family and employees or business partners in a commercial policy. When they fail to live up to that standard, it is called bad faith.

Insurance companies in Washington owe their customers a duty of good faith under the law. RCW 48.01.030. The Washington Supreme Court has also stated that insurance companies owe a fiduciary duty to their customers. Tank v. State Farm Fire & Cas. Co., 105 Wn.2d 381 (1986).

The law requires that your insurance company pay your claims correctly and completely. They also have a duty to investigate your claim properly, and in the case of liability coverage, they may have a duty to defend you if you are sued by someone else. The Courts and the Legislature in many states have decided that the problem is so bad that they have provided for punitive damages when insurance companies operate in bad faith. In Washington State, if you prove that they did not act in good faith and violated the Insurance Fair Conduct Act (IFCA), then your insurance company will have to pay your attorney fees and costs. Not only that, they may have to pay you up to treble the amount of your damages.

Prior to IFCA, Insurance Bad Faith Litigation was guided by common law principles recognized by the Courts in Washington State.

Law Offices of Neal Bonrud PLLC
Law Offices of Neal Bonrud PLLC

Why Do Insurance Companies Delay Payments or Underpay Claims?

The simple answer…profits. The economic incentives are clear for insurance companies when it comes to delayed payments on claims. The premiums are paid upfront, but the claims are paid out later. During that “float” time, the money is invested, and they turn a profit. Warren Buffet explained this clearly in his 2009 Letter to Shareholders.

The underpayment of claims is a way for the insurance companies to make money, and they will go to great efforts to protect themselves from bad faith lawsuits. In a case before the US Supreme Court, the largest property and casualty insurance company in the United States, State Farm, was exposed for the way they treated their own customers.

Abusive Insurer Behavior
State Farm Mutual Automobile Insurance Co. v. Campbell (pay particular attention to Justice Ginsburg’s dissent describing the insurer’s behavior)

Diminished Value
Washington is in a minority of states that requires insurers to compensate policyholders for diminished value in their vehicles after an accident.
Moeller v. Farmers Insurance Company of Washington

Requirement of Good Faith
Tank v. State Farm Fire & Cas. Co.

First Party Claimant to an Insurance Policy
Bad faith, and IFCA, are generally limited to “First Party Claimants” under the policy. The named insured in a policy is an obvious first-party claimant, but others may qualify as well.

IFCA states that a 201CFirst-party claimant” means an individual, corporation, association, partnership, or other legal entity asserting a right to payment as a covered person under an insurance policy or insurance contract arising out of the occurrence of the contingency or loss covered by such a policy or contract.

An example could be relatives that reside in your home or possibly guests in some situations. Beneficiaries of a life insurance policy would also be an example.
Trinity Universal Insurance Co. v. Ohio Casualty Insurance Co.