Claim Challenges

• Why Insurance Companies Deny or Underpay Claims

• Cat 1 vs Cat 3 Water Loss — What’s the Difference?

• Common Mistakes Homeowners Make When Filing a Claim

1️⃣ Why Insurance Companies Deny or Underpay Claims

Insurance companies are in business to make money, and one of the ways they do that is by limiting payouts. Claims often get denied or underpaid because of technicalities, such as saying damage was “pre-existing,” “wear and tear,” or “not covered under policy terms.” Sometimes it’s about incomplete documentation — if photos, reports, or estimates aren’t strong, the insurer uses that to justify paying less. Other times, they undervalue repair costs, using outdated price lists or cheaper categories for labor and materials. That’s why having a Public Adjuster on your side is so important — we know how to document properly and push back against these tactics.

2️⃣ Cat 1 vs Cat 3 Water Loss — What’s the Difference?

When water damage happens, insurers classify it into categories:

• Category 1 (Cat 1): “Clean” water, like from a broken supply line or faucet leak. Considered low risk.

• Category 3 (Cat 3): “Black” water, which includes sewage, floodwater, or water contaminated with chemicals, mold, or even pet urine. This is dangerous and requires specialized cleanup.

The classification matters because it determines the scope of work and cost for cleanup. Calling something Cat 1 when it’s really Cat 3 allows an insurance company to downplay the risk and pay less. The reality: anything involving contamination needs to be treated as Cat 3 to protect health and restore the property properly.

3️⃣ Common Mistakes Homeowners Make When Filing a Claim

Filing an insurance claim can be overwhelming, and many homeowners unintentionally make mistakes that cost them money:

• Not documenting enough (too few photos, no “before” evidence).

• Throwing away damaged items before they’re inspected.

• Relying only on the insurance company’s adjuster to tell them what’s covered.

• Starting repairs too early without approval, which can reduce payouts.

• Not understanding policy details, like exclusions or coverage limits.

Avoiding these mistakes can mean the difference between a partial payout and a full settlement. A Public Adjuster ensures everything is documented, filed, and negotiated correctly.