When your home is damaged by fire, water, hail, or storm, the last thing you want to worry about is fighting with your insurance company. Yet that’s often exactly what happens. Insurance adjusters armed with outdated valuation tools, built-in depreciation formulas, and instructions to minimize payouts arrive at your property offering settlements that fall drastically short of actual repair costs.

This isn’t incompetence. It’s systematic. And it’s by design.

The Adjuster Game: Undervaluation Built In

Insurance companies don’t send adjusters to your home hoping for an accurate assessment. They send adjusters trained to find reasons to reduce your claim. Insurance adjusters work on behalf of the insurance company, not you. They use proprietary software and pricing guides designed to minimize payouts.

When an adjuster walks through your home, they’re not looking for all the damage. They’re looking for the cheapest way to document it. They’ll photograph what they can measure but miss the hidden problems—the water damage behind your walls, the mold colonizing your attic, the structural compromises that won’t appear for months.

And they’ll use depreciation aggressively. That 10-year-old roof? They’ll depreciate it by 50-70%, even if it had 15 more years of life expectancy. Your kitchen cabinets? Functionally destroyed, but they’ll treat them as “used goods” and offer pennies on the dollar.

The “Three-Bid” Trap

Insurance adjusters love the three-bid game. They’ll tell you, “Get three contractor bids and we’ll use the average.” It sounds fair. It’s not.

The insurer knows contractors in your area charge 30-50% MORE than the insurer’s estimate to actually do the work properly. The insurer’s adjuster lowballed the damage assessment. When contractors bid on that incomplete scope of work, their bids are still higher—but not enough. The insurer then uses the highest bid to pressure you into settling for less.

Outdated Pricing Guides and Excluded Upgrades

Insurance adjusters use pricing guides that are frequently outdated—sometimes 2-3 years behind actual construction costs. Material costs have spiked in recent years. Labor rates have climbed. But your insurer’s software is still calculating old prices.

Then there’s the code upgrade exclusion. Your 1960s home has old wiring that burned in an electrical fire. Current code requires modern wiring. The insurer will pay to replace the burned wiring only—at 1960s specifications. They’ll refuse to cover modern, code-compliant wiring, calling it an “upgrade.” But a licensed electrician cannot legally install 1960s-spec wiring today. This is where the underestimation becomes a denial in disguise.

You Have Rights—And Leverage

Pennsylvania, New Jersey, and Maryland all recognize that homeowners shouldn’t be forced to accept a one-sided valuation from the insurance company:

Pennsylvania law (42 Pa. C.S. § 8371) requires that property insurance claims be settled fairly and promptly.

New Jersey (N.J.S.A. 17:29BB-1) specifically requires insurers to act in good faith.

Maryland (Maryland Insurance Article §27-1001) requires insurers to provide reasonable settlement options.

1. Hire a Public Adjuster

A public adjuster is an independent claims professional who works for you, not the insurance company. They typically take 5-10% of any increase they recover—but they often recover multiples of their fee.

2. Demand an Independent Appraisal

Many policies include an appraisal clause. Each side picks an appraiser; the appraisers pick an umpire. Often, just threatening appraisal prompts a higher settlement offer.

What You Should Do Right Now

1. Don’t cash the check yet. Once you endorse it, you may lose leverage.
2. Get your own contractor estimates. At minimum, get two bids from licensed, insured contractors.
3. Document everything. Photographs, videos, written notes.
4. Challenge the estimate in writing.
5. Consider professional help. A public adjuster or attorney’s cost is almost always recouped.

Related reading: Fire Damage Claims | Water & Flood Damage Claims | Hail Damage Claims | Storm & Wind Damage Claims

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Frequently Asked Questions

Can an insurance adjuster’s estimate be wrong, or is it legally binding?

An adjuster’s estimate is just that—an estimate. It’s not binding. You have the right to dispute it and obtain your own valuations. Many policies also allow for appraisal if you and the insurer can’t agree on the amount of loss.

If I hire a public adjuster, won’t the insurance company deny my claim?

No. Hiring a public adjuster is legally protected. Insurance companies cannot retaliate against policyholders for asserting their claim rights. If an insurer denies a claim because you hired a public adjuster, that itself becomes evidence of bad faith.

What if the insurer says the damage is “pre-existing” or “wear and tear”?

That’s a coverage determination, not a valuation issue. If your policy covers the type of damage, the insurer must prove the specific loss is excluded. An attorney can review your policy and challenge improper exclusions.

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More from Siddons Law

• How to Document Your Property Damage Insurance Claim – Protect your claim with proper documentation from day one
• Why You Should Never Give a Recorded Statement Without a Lawyer – Common traps in recorded statements
• Hidden Damage: Why Your First Insurance Payout Is Rarely Enough – Supplemental claims for hidden damage
• How Insurance Companies Use Forensic Engineers to Deny Your Claim – Fighting biased engineering reports
• Bad Faith Insurance Lawyer – Complete guide to bad faith claims in PA, NJ, MD, and NY

Ready to Protect Your Claim?

Call us today at 610-255-7500 for a free consultation. We’ll review your claim, your insurer’s estimate, and your policy.

Siddons Law Firm
Media, PA 19063
Phone: 610-255-7500 | Website: siddonslaw.com