The Data: How Bad Is the Denial Problem?
Among the 13 largest homeowners insurers, 47.5% of claims were closed without payment in 2023 — up from 37.4% for all reporting carriers. These denial rates have been "creeping up steadily for nearly two decades."
Farm Bureau Property & Casualty — which holds a dominant market share in rural North Carolina — had the highest denial rate of any major carrier studied: 70.5% of claims closed without payment.
Partial underpayment is just as damaging: Approximately 30% of homeowners insurance claims receive partial payments below the policyholder's actual losses — in addition to outright denials. This means the majority of policyholders who do receive a payment are still not made whole.
The 8 Most Common Denial & Underpayment Tactics
For each tactic carriers use, Mantis Claims Group employs proven counter-strategies:
Exclusion Misapplication
~33% of all denialsCarriers frequently apply exclusions in ways that stretch or misread policy language — attributing storm damage to 'pre-existing deterioration' to invoke the wear-and-tear exclusion, or claiming wind-driven rain is 'flooding' on a property without a flood policy.
Causation Disputes
Wind vs. storm surge disputesAfter hurricanes, carriers routinely dispute whether damage was caused by wind (covered) versus storm surge or flooding (excluded). Forensic engineering analysis is essential to establish that wind caused specific damage before water arrived — a distinction worth hundreds of thousands of dollars.
Inadequate Scope of Damage
One-visit inspections miss mostThe carrier's adjuster often performs a single 1–2 hour site inspection for a complex commercial loss, missing concealed structural damage, HVAC and mechanical damage, electrical code failures, foundation issues, and undocumented contents.
Depreciation Manipulation
ACV vs. RCV disputesCarriers apply excessive depreciation percentages, depreciate labor in addition to materials (which many courts have ruled improper), and fail to account for recoverable depreciation when property is repaired or replaced.
Wrong Unit Price Data
Pre-inflation Xactimate pricingCarriers sometimes use outdated regional price databases in Xactimate. Post-pandemic inflation drove construction costs dramatically higher — estimates using 2019–2020 unit prices significantly undervalue 2024–2025 losses.
Business Interruption Minimization
Fraction of actual BI losses paidCarriers frequently dispute the restoration period length, revenue baseline, and allocation of continuing expenses. Without a professionally prepared BI claim package, policyholders routinely recover a fraction of their actual economic loss.
Delay Tactics as Leverage
Pressure to settle shortNC General Statutes Chapter 58 requires insurers to act in good faith, but delays in inspection, excessive documentation requests, and slow processing pressure policyholders — facing repair costs and lost revenue — to accept inadequate settlements just to end the ordeal.
Partial Payment Pressure
Accepting locks out remainderCarriers sometimes make an initial partial payment — enough to trigger a signed proof of loss — while reserving the right to dispute the full scope. Accepting without a reservation of rights can, in some circumstances, limit your ability to pursue the remainder.
How Public Adjusters Fight Back: The Numbers
Studies show policyholders with public adjuster representation receive settlements 40–700% higher than those who handle claims alone — and even after adjuster fees of 5–15%, the net recovery is substantially larger.
The reason professional representation works is straightforward: insurance carriers are dealing with a professional who speaks their language, understands their tactics, and cannot be pressured or confused by policy jargon. When a licensed public adjuster enters the process, the dynamic shifts in the policyholder's favor.
The verified case studies above illustrate this shift in concrete terms: a Dallas homeowner saw a $22,000 offer become $87,000 once a PA conducted forensic analysis the carrier's adjuster never performed (ICRS). Bay View Foods endured a year of inadequate offers before a PA reclassified a single piece of equipment from routine cleaning to a $7M total loss, doubling the overall settlement (Globe Midwest). These are not outliers — they are what happens when qualified representation enters a process designed to favor the carrier.
What You Should Never Do After a Claim Denial
A denied or underpaid claim is not the end of the road. Mantis Claims Group specializes in reopening denied claims, challenging improper exclusion applications, and negotiating significantly higher settlements — even on cases that policyholders had already given up on.