In our final installment of our series Five Things You Need To Know About Property Insurance, Mark Miller addresses the importance of understanding the law.    

The phrase “industry customs and practice” describes what insurance companies do.  These are the normal procedures and practices used in the insurance industry to adjust property claims.  These practices, though, can be markedly different from policy language and the law.  If you ask about an issue, and you hear, “this is just how we do things,” you should be concerned.  Insurance industry custom and practice, more often than not, has nothing to do with policy language or the law interpreting that policy language.  It is also entirely irrelevant in determining what rights are afforded under the insurance policies. 

Watch the video to learn more.

We have included a transcript of the video below:

Five Things You Need to Know About Property Insurance: 5) The Only Way To Maximize The Value Of Your Claim Is To Understand The Law

The only way to maximize the value of your claim is to understand the law. Now, look, I realize this is a little bit self-serving because we’re lawyers and this is what we do, but let me articulate the concept a tiny bit more. As a preliminary matter, industry custom and practice, and by that I mean what insurance companies do and how they do it is very, very different from what’s supposed to be done, necessarily done, under the insurance policy and what the law requires them to do.

Now, I’m not saying they’re doing anything wrong or anything bad, I’m just saying that they do it a certain way and they’re trained to do it that way to minimize loss and to minimize cost, and it’s not necessarily evil, it’s just what they’re trained to do and how they do it. They have a certain of approaching things. Sometimes if you challenge that way and you link it to what the policy says, the insurance policy says, they should do two markedly different things. The insurance policy says one thing, and what they’re doing is completely different.

So, you have the insurance policy and the custom and practice being different, but you need the law to back that up. If you understand the caselaw that’s evolved over these clauses for the past 10, 20, 30 years, you can sometimes come in and you can very efficiently tell the insurance company, “No, that’s, that’s not the number, the number is much bigger and here’s why.”