Why is insurance such a big deal?

Simply put, risk is bad, and insurance is a risk transfer mechanism. Practically speaking, it's required by lenders and (most) governments, and enforced with consequences. An uninsured car on the road could risk impoundment, repossession, or criminal and civil penalties for the owner. 

We don't think about insurance nearly as much as we should. And that's because the good news is most of us will never file a claim of any significance (e.g. house fire, auto accident involving serious injury or death, art or jewelry theft). The bad news is that significant claims happen all the time (most insurers have a "Large Loss Department"), and the worst time to learn about what your insurance covers is when you need it. Whether you can afford your deductible, what your coverage limits are, and what your policy covers and excludes are important questions. Many people turn to insurance agents to navigate their options, but often the important questions are never asked and go unanswered.

The truth is that all policies are not alike, but you are stuck with your coverage unless your insurance company

Too busy to sit down and read and understand your insurance documents? 

Homeowners insurance is a three-legged stool of accountability, fairness, and trust

If one of the legs breaks, the stool topples over. Insurers that are not doing the right thing, playing unfairly, or misleading their insureds should be held accountable, but seldom are. Since founding Athena Law, Pam has spoken with numerous individuals who were navigating claim issues.

Recoverable depreciation

Recoverable depreciation is that part of a covered claim that the insurance company withholds until repairs are completed. When your home is damaged, your insurance company will pay you the depreciated ("actual cash") value of your damaged flooring, roof, fence, wall, or any other part of your property until you fix it. So if your 10-year-old roof needs to be replaced following a hailstorm, you will receive the market value of a 10-year-old roof. Once you replace your roof, you can submit the invoice to your insurer to recover the remaining costs. This practice is meant to ensure that homeowners actually repair their property. But it has an upside for insurance companies: sometimes people do not understand that they are entitled to additional money or how to claim it, and ultimately fail to do so.

With over a decade of industry experience, all in the property and casualty market (e.g. home, auto, business, umbrella, cyber), Pam has a practical and principled view of insurance. She knows how to navigate the system, negotiate effectively, and take all necessary steps—in pursuit of the benefits to which you’re entitled, no matter how small. Pam has negotiated favorable settlements with insurers over disputes ranging from four to six figures. Even when she worked for insurance companies, Pam was dogged in her insistence that insureds should receive the coverage they paid for if they ever needed it. 

Insurers are highly regulated, with each state imposing its own rules and laws on everything from licensure to pricing. In such a complicated legal landscape, insurance companies frequently err. 

In many respects, insurers are also held to a higher standard than most other businesses because they play a critical role in reducing societal risk. For example, the law recognizes a special cause of action called bad faith. Bad faith can be either first- or third-person. 

First-person bad faith occurs when an insurance company fails to uphold its duty of good faith and fair dealing toward its own policyholder. This typically involves unjustified delays, denials, or underpayments of valid claims under a policy where the insurer is supposed to pay benefits directly to the insured—such as in health, disability, homeowner’s, or auto coverage. To prove first-party bad faith, the insured must show that the insurer lacked a reasonable basis for its decision and either knew or recklessly disregarded that lack of justification. Bad faith is not just about a mistake or mere negligence—it's about an insurer acting unfairly, leaving the policyholder without the protection they paid for in their time of need.

Third-party bad faith arises when an insurance company fails to properly defend or settle a claim made against its policyholder by another person—the “third party.” This typically occurs in liability insurance situations, such as auto or homeowners policies, where the insurer has a duty to protect the insured from financial exposure. If the insurer unreasonably refuses to settle a valid claim within policy limits or neglects to defend the insured in a lawsuit, and the insured ends up facing a judgment beyond their coverage, the insurer may be held liable for bad faith. In essence, third-party bad faith is about the insurer’s failure to act in the best interest of its policyholder when dealing with claims brought by others.

Everyone deserves to be treated fairly by their insurance company—including receiving timely payment of valid claims.

If you're at odds with your insurer, speaking with an attorney is the smartest first step. Without industry experience, trying to resolve these issues alone can be overwhelming, emotionally draining, and may even jeopardize your case.

There’s no cost or obligation to talk with us. Reaching out early—at the first sign of trouble—is the best way to protect your rights and preserve your options. Schedule a free consultation today and let us help you move forward with confidence.