Know Your Rights as a Policyholder

As an insurance policyholder, you have far more rights than most people realize. Your insurance policy is a contract, and the insurance company has specific obligations under that contract, under state regulations, and under common law. When they fail to meet those obligations, you have remedies.

Your Right to Choose Your Own Contractor

In most states, you have the right to hire your own contractor to perform repairs. The insurance company cannot force you to use their preferred vendor, and they cannot reduce your payment simply because you chose a different contractor. They owe you the reasonable cost of repair, regardless of who performs it.

Your Right to a Timely Response

Every state has regulations requiring insurance companies to handle claims within specific timeframes. In California, the carrier must acknowledge, investigate, and accept or deny within prescribed periods. If they miss these deadlines, they may be in violation of state regulations — and you can file a complaint with the Department of Insurance.

Your Right to a Written Explanation

If the insurance company denies any part of your claim, they must provide a written explanation. This isn't optional — it's required by regulation. The denial must cite the specific policy provision, statute, or other basis for the denial.

Your Right to Dispute the Amount

The insurance company's estimate is not the final word. You have the right to submit your own estimate, contractor bids, or other documentation to support a higher amount. If you can't agree on the amount, most policies include an appraisal clause that provides a mechanism to resolve the dispute.

Your Right to Representation

You have the right to hire a public adjuster or attorney to represent you in your claim. The insurance company cannot retaliate against you for hiring a representative, and they must communicate with your representative once you've authorized them.

Your Right to Sue for Bad Faith

If the insurance company handles your claim in bad faith — unreasonably delaying, denying without basis, lowballing, or otherwise failing to act in good faith — you may have a cause of action for bad faith. In some states, bad faith damages can include emotional distress and even punitive damages.